Commentary on Sections Part 1 – Quality and Delivery of NHS Services Detailed explanation of provisions Section 11:  Direct payments for health care
132.Section 11 inserts new sections 12A to 12D into the NHS Act.
133.New section 12A(1) allows the Secretary of State to make a direct payment to a patient or their representative, in order to purchase goods or services that might otherwise be provided by the NHS. The goods or services are those identified in new section 12A(2). Section 12A(1) also requires that direct payments be made only with the consent of the patient. However, where a patient lacks capacity, provision could be made in regulations for consent to be given by a representative of the patient under section 12B(2)(c).
134.New section 12A(2) specifies that direct payments may be made in respect of services the Secretary of State may or must provide under sections 3(1) or 2(1) of the NHS Act, must arrange under paragraph 8 of Schedule 1 to the NHS Act or vehicles that that Secretary of State may provide under paragraph 9 of Schedule 1 to the NHS Act.
135.New section 12A(3) causes the Secretary of State’s ability to make direct payments to be subject to regulations made under new section 12B.
136.New section 12A(4) provides for regulations to enable a PCT to make a direct payment for after-care services it is obliged to provide by section 117 of the Mental Health Act 1983.
137.New section 12A(5) defines a payment of the kind described in new section 12A(1) or 12A(4) as a direct payment.
138.New section 12A(6) provides that direct payments may only be made as part of a pilot scheme established under regulations under new section 12C and 12B. However, this section may be repealed by order, as laid out in new section 12C(8)(a).
139.New section 12B(1) enables the Secretary of State to make regulations about direct payments. These regulations enable provision to describe in more detail when and how direct payments can be made.
140.New section 12B(2) enables regulations to define the scope of direct payments, which, under new section 12C(1), includes the way pilot schemes will operate. Under new section 12B(2)(a), it will be possible to set out in regulations which services may or may not be suitable, in what circumstances, and which patients may or may not be allowed to receive direct payments in order to purchase services. The regulation-making power is subject to the negative resolution procedure.
141.Direct payments will often be made directly to the patient themselves, but a patient may prefer to nominate someone else to receive and manage direct payments on their behalf. New section 12B(2)(b) allows for circumstances to be prescribed in which direct payments may or must be made to a person nominated by the patient.
142.Where a patient lacks capacity, new section 12B(2)(c) allows for circumstances to be prescribed in which direct payments may or must be paid to someone other than the patient. This will make it possible, where the individual lacks capacity to make the necessary decisions about consenting to and managing a direct payment, to make direct payments to a suitable surrogate on the individual’s behalf. The reference to a person who lacks capacity has the same meaning as in the Mental Capacity Act 2005 (see new section 12B(6)(b)). Regulations could also provide for direct payments to be made to a parent or other person in respect of a child where a child is unable to consent to the making of payments.
143.New section 12B(2)(d) allows regulations to set out conditions that must be complied with by the Secretary of State (in effect, by the NHS organisation granting the direct payment on behalf of the Secretary of State) or the PCT (in relation to after-care under section 117 of the Mental Health Act) when making a direct payment. This might include ensuring that there is an agreed care plan, that there are proper arrangements in place for paying the money into a secure bank account or for carrying out regular reviews of the payments and of the patient’s care.
144.New section 12B(2)(e) enables regulations to set out conditions the patient or payee should comply with when a direct payment is granted. These might include: maintaining a separate bank account; agreeing to a care plan that specifies the agreed health outcomes and the types of services to be purchased to help meet those outcomes; or providing records of their spending to demonstrate that it is in line with the care plan.
145.New section 12B(2)(f) enables regulations to make provision about the amount of a direct payment or how it is to be calculated. For example, the regulations are likely to require that the amount be sufficient to cover the whole of the services set out in a care plan for which they are to provide. As methodologies for estimating the required budget emerge these may also be specified in regulations.
146.New section 12B(2)(g) allows regulations to set out when the Secretary of State, or the PCT when making direct payments for after-care under section 117 of the Mental Health Act, may or must stop making direct payments. Relevant circumstances might include when a patient’s health is deteriorating such that it cannot be managed within the budget or where there is evidence that the direct payments have been abused.
147.New section 12B(2)(h) allows regulations to describe circumstances in which the Secretary of State, or the PCT when making direct payments for after-care under section 117 of the Mental Health Act may or must require all or part of direct payments to be repaid, for example, when a significant surplus has accumulated.
148.New section 12B(2)(i) allows regulations to include appropriate monitoring arrangements as regards the making of direct payments, their use by the payee, or the services which they are used to secure. For example the PCT, acting on behalf of the Secretary of State, might require the payee or providers contracted using a direct payment on the payee’s behalf, to periodically submit copies of receipts. Similar provision could be made in respect of the making of direct payments for after-care under section 117 of the Mental Health Act.
149.New section 12B(2)(j) allows regulations to make provision about the arrangements to be made by the Secretary of State or the PCT to provide information, advice or other support to patients or others. For example, regulations are likely to require PCTs to provide information about the range of services available in their area.
150.New section 12B(2)(k) allows regulations to be made governing how far support for direct payments can be treated as a service for which direct payments can be made. This could allow provision to be made allowing the PCT to give people direct payments to purchase support, for example help with payroll services for employees, or independent advocacy services.
151.New section 12B(3) allows regulations to make provision to govern situations where a patient has fluctuating capacity, for example where, at the time of initially being granted a direct payment, they do not have the ability to consent, but later regain capacity. Regulations might specify circumstances where direct payments should continue to be paid to a surrogate in the period immediately following the regaining of capacity, subject to the consent of the patient.
152.In the event that repayment to the Secretary of State or the PCT is needed and the seeking of repayment under regulations made under new section 12B(2)(h) has been unsuccessful, regulations under new section 12B(4) could allow the sum owed to be recoverable as a civil debt due to the Secretary of State or the PCT. In addition, for serious abuse of the system, criminal sanctions will be available through the Fraud Act 2006 or the Theft Act 1968.
153.New section 12B(5)(a) and (b) allow regulations to define the extent to which, while patients or another person on the patient’s behalf may have procured the goods or services directly, those services should be regarded as goods or services provided by the Secretary of State or a PCT. This means that in prescribed circumstances, but only in prescribed circumstances, the Secretary of State could be considered to have fulfilled the duty to provide a service described at new section 12A(2) by making a direct payment. Similarly, a PCT could be considered, in prescribed circumstances, to have fulfilled its obligations under section 117 of the Mental Health Act by making a direct payment.
154.New section 12B(6) contains definitions. New section 12B(6)(a) specifies that a “service” includes anything for which a direct payment may be made, as set out in new section 12A(2) or section 117 of the Mental Health Act. New section 12B(6)(b) defines references to lacking capacity by reference to the meaning in the Mental Capacity Act 2005.
155.New section 12C(1)(a) enables the regulations that may be made under section 12B to provide for the Secretary of State to be able to make pilot schemes in accordance with which direct payments may be made.
156.New section 12C(1)(b) allows the pilot schemes provided for by regulations to include provision for any of the matters covered by new section 12B(2) as long as the pilot schemes comply with the regulations under new section 12B. For example, a pilot scheme might apply to patients with a particular health condition in particular circumstances for which bespoke monitoring arrangements are appropriate.
157.New section 12C(2)(a) allows provision in regulations to provide for or require specification of the geographical area of a pilot scheme. New section 12C(2)(b) allows the regulations to make provision for or require the pilot scheme to provide for the scheme’s revocation or amendment.
158.New section 12C(3) requires that regulations must provide that when a pilot scheme is created, its duration is specified, although they may provide for the initial period to be subject to extension by the Secretary of State. This may occur if, for example, the pilot scheme took longer than anticipated to become established and needs to be extended to allow enough patients to use it for robust review.
159.New section 12C(4) requires that regulations must provide for the review of a pilot scheme or require the pilot scheme to include provision for review.
160.New section 12C(5) sets out particular provision that may be made for the form of a review of the pilot scheme. The section allows provision to be made to ensure that an independent person carries out the review, that the findings of the review are published, and that the review considers certain subjects.
161.New section 12C(6) sets out a range of specific matters the review may consider. These include the administration of the scheme, the effect of direct payments on the cost or quality of care, and the effect of direct payments on the behaviour of patients, carers or people providing services.
162.New section 12C(7) allows the Secretary of State, having carried out a review of one or more pilot schemes, to either repeal section 12A(6) and section 12C(1) to (4), using an order described at section 12C(8)(a), or repeal sections 12A to D using an order described at section 12C(10). Repeal pursuant to section 12C(8)(a) would make direct payments generally available subject to any regulations under section 12B. Repeal pursuant to section 12C(10) would prevent the making of direct payments under the new sections in future.
163.New section 12C(8)(b) provides for other provisions of the NHS Act to be amended, modified or repealed, for example where it has become apparent that this is necessary for a general roll out of direct payments. Any orders made under section 12C(7) are subject to Parliamentary approval by each House of Parliament under the affirmative resolution procedure (see the amendment made by paragraph 10 of Schedule 1 to the Act to section 272(6) of the NHS Act).
164.New section 12C(9) specifies that any amendments, repeals or modifications to the NHS Act carried out by an order described at section 12C(8)(b) must be necessary or expedient for the purpose of facilitating the making of direct payments. This means that changes could be made to the NHS Act to reflect the lessons learnt from the pilot schemes, but prevents the power at section 12C(7) being used to make other changes to the Act.
165.New section 12C(10) provides for the Secretary of State to be able to repeal sections 12A, 12B, 12C and 12D. In the event that the pilot schemes show that direct payments are not a viable way to deliver services, these provisions allow the Secretary of State to remove the powers from the NHS Act through an order subject to approval by each House of Parliament under the affirmative resolution procedure.
166.New section 12D(1) authorises the Secretary of State to make arrangements with other bodies for their assistance in providing or operating or otherwise in connection with direct payments.
167.New section 12D(2) provides that the bodies with whom such arrangements may be made include voluntary organisations.
168.New section 12D(3) provides that the Secretary of State is free to agree terms with such bodies. The Secretary of State may pay a body for its part in the arrangements concerning direct payments.