Background and Summary Part 3.Miscellaneous Private patient income
54.The private patient income cap was introduced by the 2003 Act (consolidated by the NHS Act). The private patient income cap, set out at section 44 of the NHS Act, applies to NHS foundation trusts which were previously NHS trusts. It has the effect that the proportion of an NHS foundation trust’s total income in any financial year derived from private charges must not exceed the proportion of its total income derived from private charges in the ‘base financial year’. The base financial year is the first financial year in which a trust was an NHS trust, or if it was an NHS trust throughout the financial year 2002-2003, that year. As the cap is by reference to the proportion of income derived from private charges, NHS foundation trusts can treat more private patients so as to increase their income derived from private charges, but only if there is a corresponding increase in NHS provision.
55.As no mental health NHS foundation trust treated private patients in the base financial year, their cap is set at zero per cent. The Act amends section 44 of the NHS Act so that an authorisation given by the regulator must in the case of a mental health foundation trust restrict the provision of goods and services by the trust with a view to securing that the proportion of its total income derived from private charges does not exceed 1.5 per cent of the trust’s total income, or the existing cap if greater. The figure of 1.5% is based on the average cap level of all NHS foundation trusts delivering acute care in 2008-09. New section 44(2A) provides for NHS foundation trusts to be designated as mental health foundation trusts if it appears to the regulator that they meet a specified description.