Care Providers – Are your contracts good enough?

As discussed in our previous blog regarding recovering unpaid care fees, the current economic climate presents a number of challenges for care providers and having to deal with recovering unpaid care fees and/or funding issues can be an additional pressure.

We understand that the payment of care fees in a timely manner is crucial for ensuring sufficient cash flow to keep your business running smoothly, which is ultimately in the best interest of your residents.

As well as ensuring that fees are paid on time, care providers should also check with their Local Authority regarding Funded Nursing Care (FNC) and Continuing Healthcare (CHC), to ensure that residents are obtaining all requisite funding. Ellis Jones can assist residents with navigating through these funding eligibility processes and can also act in claims for retrospective NHS CHC funding, when a resident may have been wrongly assessed as not being eligible.

A simple way to ensure the timely payment of fees is to have robust contracts in place. This ensures that all parties understand what is expected of them and sets out a clear framework in the event that something goes amiss. Contracts with residents, or their attorney/deputy, should clearly outline when payments are expected and what happens if these deadlines are missed. A clear outline of the obligations in relation to paying fees also ensures there is complete transparency and limits the prospect of any disagreement between providers and residents and their families.

As a general rule, care providers should:

• Ensure that all existing residents have contracts in place;
• Ensure that there are processes in place to ensure that new residents can receive, consider and sign contracts promptly;
• When discussing a care home contract with a resident, make sure you understand who is responsible for paying the care fees;
• If a resident does not already have a Power of Attorney in place, it may be prudent to encourage families to discuss setting up the same to ensure that a resident’s care fees are paid consistently and are not affected if the resident loses capacity.

We would strongly recommend that care providers get their contracts prepared and/or reviewed by a legal professional with expertise in the healthcare sector, in order to protect the viability of your business. For example, if a care home contract contains terms that are deemed unfair, the contract will not be valid and care providers will not be able to enforce terms of the contract. Unfair terms are those which put the person that signs the contract at an unfair disadvantage, such as:

• ‘Hidden’ terms which residents have not had a change to read and understand
• The requirement for care fees to be paid for an extended period after a resident has died
• Terms which allow providers to make unexpected changes to fees

Our Healthcare Team have the requisite expertise to ensure there are no such pitfalls in your contracts. We can review existing contracts or contract templates, or draft new contracts to ensure that they are robust and fit for purpose in order to try and prevent disputes occurring, to protect your position and your business.

If an issue with recovering unpaid fees does occur, it is worth seeking legal advice early with a view to recovering those outstanding debts and improving cash flow as soon as possible. In some cases, it may be appropriate to refer residents and their families to the Local Authority if they are unable to pay fees as they may be able to discuss a Deferred Payment Agreement.

Our Healthcare Team understand the importance of maintaining good relationships and a strong reputation within the healthcare sector. As such, our aim is always to reach the best possible commercial resolution in an efficient manner and without recourse to court proceedings, wherever possible. However, care providers should be prepared to commence proceedings if necessary, as the recovery of care fees will ensure that cash flow is maintained, the business continues to run and the residents remain supported.

We can work closely with you to provide specialist and tailored advice based on the particular facts of your dispute and then proceed to deal with the matter as appropriate. We can offer a full cycle debt recovery process to include the following:

• Drafting initial letters of claim
• Issuing and management of Court proceedings
• Enforcement of County Court Judgments
• Mediation of disputes
• Disputing claims made against you
• Applications to remove a County Court Judgment issued against you

If you wish to discuss a potential matter, please contact Henrietta Frew by email on Henrietta.Frew@ellisjones.co.uk or phone 01202 057863.