The GP Contract Made Easy Getting Paid 1st Edition
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About the author
Rodger Charlton BA m b ChB MPhil m d frc g p frn zcg p d f f p f s o m w qualified from
Birmingham in 1983. During vocational training in Nottingham he completed an
MPhil thesis in medical ethics. Shortly afterwards he became a GP principal in
Derby in a five-doctor partnership and part-time lecturer in general practice at
Nottingham University. In 1 9 9 1 -9 2 , he was a visiting fellow at the Department of
General Practice, University of Otago Medical School, New Zealand, researching
into the perceived needs of undergraduates in palliative medicine education. This
formed the basis of his MD thesis. He also worked as a GP in New Zealand gaining
his MRNZCGP in 1992.
In 1 9 9 4 he was appointed as a senior lecturer in primary healthcare at the Post
graduate School of Medicine, Keele University, and in 1995 he took over a single-
handed general practice in Hampton-in-Arden, close to the Warwickshire border.
In 1 9 9 7 he became a GP trainer and in 1998 he became editor of the Royal
College of General Practitioners (RCGP) Members’ Reference Book (MRB) for two
years. He is now the editor of RCGP publications excluding the journal and MRB
which is now produced quarterly as the TNG (The New Generalist).
His research interests and published papers are in palliative care, bereavement
and meningococcal disease, but there is a strong focus on research in education
and professional development in primary care. In September 2 0 0 0 he was
appointed as senior lecturer in continuing professional development at Warwick
University and in January 2 0 0 3 he became the Director of GP Undergraduate
Medical Education at Warwick Medical School. He received the John Fry Award of
the RCGP in April 2 0 0 1 for being a GP who has ‘promoted the discipline of general
practice through research and publishing as a practising GP’.
In November 2 0 0 3 he was awarded a fellowship of the Society of Medical
Writers (SOMW) of which he became the chairman in April 2 0 0 4 . He maintains
an interest in postgraduate education by being a GP and primary care trust (PCT)
tutor and helping GPs move through the recent changes in relation to the Post
graduate Education Allowance (PGEA), personal development plans (PDPs) and
appraisal. He has now become a GP Appraiser.
Rodger has been a GP principal for 16 years and during this time has acquired
knowledge in the day-to-day running of a GP practice. During his five years as a
solo practitioner until he went into partnership in September 2 0 0 0 , he had to get
to grips with practice management and how a GP and GP practice gets paid and
the many associated issues. This has remained an interest since then particularly
with the advent of the new GP contract (nGMS contract, also called GMS II). As
well as being an academic GP he remains a practical ‘hands on’ GP both in patient
care and the running of a practice with his GP partner, Ryan Prince.
To all general practitioners that this text may be a help to them
as they cope with further change.
Introduction
In June 2 0 0 3 , GPs (family doctors) in the UK overwhelmingly (80%) supported a
new contract which has been hailed by some as the biggest change in their
employment terms since the NHS was founded in 1948. As well as being paid for
‘essential’ services which are the ‘core’ activity of a GP’s daily work, GPs would be
paid for quality of care in relation to chronic disease and the organisation of care.
In addition, it has been recognised that this new contract could enable GPs to
provide and be paid for ‘enhanced services’ traditionally confined to hospitals and
so formalise the concept of GPs with Special Interests (GPswSIs).
Although there may be some differences in process in each of the four countries
of the UK, the principles of the new contract apply to all. GP practices have been
busy preparing for 1 April 2 0 0 4 . Across the four countries of the UK, nearly 100%
of practices signed up to the contract, with only eight default contracts in England
and none in the other three countries.
One of the problems with the ‘new contract’ is that there are still a lot of
unknowns and ongoing changes, particularly in interpretation and putting the
theoretical proposals into practice. I recently received an email from a colleague in
France who told me how she kept hearing about the NHS’s ‘new GP contract’, but
could not find a simple description of what it was. I was asked if I could tell her in
a few words what it was all about, what were the main changes and how it
differed from the 1 9 9 0 contract. As I grappled with this question I was stimulated
to answer the question and so write this book and in particular to detail its implica
tions financially to GPs.
Why did the new contract come about?
There are many possible reasons, but one that politicians often quote is that an
increase in pay and the ability to opt out of out-of-hours care would stop GPs
leaving the profession. In addition, it would help to recruit newly qualified GPs to
take up the increasing number of vacancies and encourage junior doctors to
consider general practice as a career. The previous health secretary, Alan Milburn,
delegated the responsibility for negotiating the new contract to the NHS Confedera
tion, the representative body for health service managers, because government
talks through the Department of Health with the British Medical Association (BMA)
reached a deadlock over nearly a three-year period. The General Practitioners
Committee (GPC) of the BMA, the professional body for all UK doctors, has repre
sented and continues to represent GPs in the negotiations.
Which GPs will the contract affect?
The new contract (GMS2) covers the 36 0 0 0 GPs who work under the General
Medical Services (GMS1) contract and the approximately 25% of GPs who work
under the Personal Medical Services (PMS) scheme. However, the implications are
2 The GP Contract made easy - getting paid
different for PMS practices as they have contracts negotiated locally with commis
sioning health bodies such as primary care trusts (PCTs). Nevertheless there is
likely to be considerable convergence with GMS2 practices, particularly in terms of
quality targets.
It has been said that the new contract will succeed or fail depending on the
future partnerships of GPs, GP practices and primary care organisations (PCOs) -
PCTs in England and Health Boards in Scotland.
Patients
The government and negotiators hope that patient care will improve as a result.
This is unknown because a pivotal change will be that patients will no longer be
registered with an individual GP, but a GP practice. Patients are likely to see a
greater range of primary care practitioners and not just a general practitioner. This
could be a healthcare assistant, a practice nurse, a nurse practitioner, one of many
other healthcare practitioners or a general practitioner. Some have argued that this
could be the end of the traditional doctor-patient relationship, continuity of care
and the personal doctor. Furthermore, as many GPs opt out of out-of-hours care as
a result of the new contract, this will further fragment continuity of care.
What will happen to the term, 'GP principal'?
If GPs are no longer responsible for individually registered patients, but the practice
is, what will happen to the concept of a GP principal? Will GPs become consultants
in primary care? GP practices may choose to just provide essential care for patients
who are acutely or chronically sick, or offer a wider range of services, such as
contraception, vaccination, minor surgery, and the management of more complex
medical conditions such as multiple sclerosis or epilepsy. It is anticipated that
quality of care through a national framework of standards (quality indicators) will
be an important focus for GP practices. GPs (principals and non-principals) have
been transferred from the supplementary lists of PCOs to lists of ‘Medical Perfor
mers’. (Any doctor who wishes to perform General Medical Services or Personal
Medical Services will have to be included in a PCO Medical Performers list from 1
April 2 0 0 4 .) The terms ‘principal’ and ‘non-principal’ are being used less frequently
and all are GPs whether that is as partners, salaried doctors or working on a
sessional/locum basis. However, in view of readers’ familiarity with and the transi
tion in the use of this terminology, the term ‘GP principal’ is still used during this
book.
The role of PCOs
The new contract provides increased scope for collaborative working between prac
tices working in the desired ‘clusters’ of the new contract, across primary care, as
well as with secondary care and social services. But what if GPs decide to opt out of
providing 24-hour care, immunisations, contraceptive care or chronic disease
management? PCOs will take on the responsibility and commissioning costs for
providing alternative providers and instead of much of a patient’s care being avail
able in a single practice, they may have to travel to different practices for different
services.
Introduction 3
The future of primary care
Ultimately this has the potential to fragment primary care and its co-ordination
under the original gatekeeper - the GP. In an attempt to increase patient choice,
patients may be able to register with more than one practice. This may be required,
for example, as the place they live may be very far away from where they work.
Quality of care may be compromised as the necessary patient records may not be
available in the absence of a universally shared patient-held NHS electronic record.
However, concurrent information technology (IT) changes predicted in the NHS
may overcome this difficulty.
Payments
This book does not attempt to address the pros and cons of the new contract, but
rather how to continue quality of patient care and survive financially under the
many logistical unknowns of the new contract. Politicians are of the opinion that
payment for quality services by demonstrating evidence of achieving defined indica
tors and providing enhanced services should encourage the provision of a wider
range of services within primary care. It is thought that most GPs’ NHS income
will rise over the next three years, but the amount will be substantially less than
the 50% pay rise mooted when the concept of the new contract was launched in
February 2 0 0 3 .
Those practices who provide a wider range of services and meet defined high
standards should see a considerable rise in profits. This book aims to instruct GPs
and practice managers how to achieve this rise.
Practical points
Throughout the book will be sections provided entitled, ‘Practical points’,
which will emphasise these issues and so alert GPs and practice managers to
areas that relate to practice income and thus where practice performance can
be improved.
Sources for the book
This book is based on information gained from the following sources:
• New GMS Contract 2003: Investing in General Practice. BMA Publication.
• New GMS Contract 2003: Investing in General Practice. Supporting Documentation.
BMA Publication.
• Lilley R (20 0 3 ) The New GP Contract: how to make the most of it. Radcliffe
Medical Press, Oxford.
• Spooner A (2 0 0 4 ) Quality in the New GP Contract. Radcliffe Medical Press,
Oxford.
• Various websites including the BMA website: www.bma.org.uk.
• British Medical Journal.
4 The GP Contract made easy - getting paid
• Commentaries from the medical press including Pulse, Doctor, General Practi
tioner, Registrar Update, Department of Health’s (DoH) GP Bulletin, MedEco-
nomics, Guidelines in Practice and associated supplements.
• Mailings from the author’s local PCT, Solihull, West Midlands.
• The ‘LMC Live’ website: www.lmclive.co.uk.
Interpretation
The writing of this book and in particular the content has provided a considerable
challenge to the author. This is for several reasons and one that has posed the
most difficulty has been the initial commentary on the new contract and then
further development on different aspects of the new contract. A great amount of
material has been read in an attempt to understand the many available sources.
Interpretations have been made to make the subject digestible and readable.
Although reference has been made to specific documents, the most helpful informa
tion to interpret these lengthy documents has come from professional magazines
including Doctor, GP and Pulse and also Internet searches under subject headings.
There was very little information provided in peer-reviewed medical journals that
the author was able to use to guide the content of this book.
In relation to payments, local variations and different regulations for each of the
four countries of the UK, these interpretations may not be absolute. It is therefore
strongly recommended that if the reader is in doubt they should seek further advice
as detailed below.
Future changes
For all of us the new contract is a new area and a huge change from the 1 9 9 0 GP
contract. Furthermore, each individual GP practice has received an individual
version of the new contract and so there are differences in localities as well as the
four countries of the UK.
After publication
When this book goes into print, further developments, revisions and interpretations
of aspects of the new contract will be made and the reader should bear this in
mind. Similarly, this book does not purport to be an absolute authority or tablet of
stone in relation to the new contract; some interpretations by the author may be
open to criticism and similarly there may be some errors.
Further information
It is suggested that when a reader has a query or concern about any issue raised in
this book and how it applies to their practice, they should seek clarification from
their local PCO in the first instance. If they are unhappy with the advice provided
by the PCO, then they should refer to the BMA’s publications detailed previously or
their website for the very latest information regarding the new contract and asso
ciated negotiations which can change quickly as the new contract is implemented.
Alternatively, one can seek advice from the BMA, if they are a BMA member. This
Introduction 5
may be by telephone or by email and failing this a Local Medical Committee (LMC)
representative may also be able to give practical and helpful advice.
Having made this statement, it is hoped that this book will be both a useful guide
to a complex and very different contract to the previous 1 9 9 0 GP contract and so
be a useful source of reference as one seeks a way through the nGMS contract
maze.
Role of the GPC of the BMA
In the BMA Contract News (April 2 0 0 4 ), Dr John Chisholm, Chairman of the GPC,
writes, ‘The contract is not perfect and we are by no means complacent’. He goes on to
say, ‘The contract is an evolving contract and its development is an ongoing process.’ He
emphasises how the GPC will continue to work on the problems and concerns that
arise as a result of the implementation of the new contract and as progress and
developments occur that these will be posted on their website: www.bma.org.uk/gp
contract.
Book as a resource
It is hoped that the book is a valuable resource in a contract that has been thrust
on busy GPs who have yet another change to cope with as they try and meet the
needs of their patients and practices in many different community settings.
Rodger Charlton
November 2004
CHAPTER 1
Getting paid under the 1990
contract
Before a doctor enters general practice, they will be accustomed to receiving a
salary and a payslip detailing deductions for tax and national insurance. This is
referred to as the PAYE (Pay-As-You-Earn) method of income tax collection.
However, most GPs are self-employed, although salaried GP posts are becoming
more common. So, if you start as a GP principal it takes quite an adjustment to
receiving a cheque of differing amounts each month according to the profits of the
practice which is a small ‘business’. The cheque is a gross payment and it is
advisable to save 40% in a high interest savings account for a tax bill which is in
arrears and also for national insurance payments. The local PCO or Health Board
deducts a proportion of your payments as superannuation and so a monthly contri
bution towards your eventual pension.
What it means to be self-employed
GPs have always been self-employed practitioners, who mix their subcontracted
work from the NHS with a small amount of private practice. When the NHS was
set up in 1 9 4 8 GPs kept their independence but agreed to register all patients and
provide 24-hour care for them in return for contracted payments. In keeping with
the ethos of the NHS, this established universal access to GPs for the first time in
the UK. This chapter describes how GPs were paid on the basis, e.g., of the number
of patients registered in their name and other payments for defined services until
the advent of the ‘new contract’ of 1 April 2 0 0 4 . It is important to be conversant
with the latest version of this, the ‘1 9 9 0 contract’, in order to understand the
financial workings, the origins of payments and implications for the new contract.
Many of the principles of being self-employed also apply to this new contract. This
chapter is therefore devoted to the derivation of payments under the previous 199 0
GP contract.
Gross payments
When a GP receives their first payment it seems a large amount when there have
been no deductions and it is tempting to feel rich and spend a lot. However, it is
important to start saving for the tax bill, which may be 12 months in coming, as
late payment or taking out a loan results in high interest payments. In order to try
and reduce the tax bill, GPs are diligent about keeping receipts as some of their
business expenses can be put against the tax bill, e.g., car, telephone and equip
ment bills. The end of each tax year is usually the beginning of April. This is when
8 The GP Contract made easy - getting paid
a GP starts to complete their tax return form and calculate their tax bill (tax liabil
ity). It is also important to employ the services of an accountant (whose fees are
tax deductible) to make these calculations. One’s first impression might be that this
is a lot of hassle, but financially there are benefits to being an independent
contractor or self-employed. It also means that you are an employer as opposed to
being employed and wholly and exclusive business expenses can legitimately
reduce the tax bill.
How did GPs get paid under the 1990 contract?
In essence there were and still are two sources; General Medical Services (GMS) and
Personal Medical Services (PMS) in addition to private fees. GMS and PMS
payments are for providing NHS services to patients registered with individual GPs
of the practice partnership. Private fees can be for seeing patients who wish to be
seen privately, although this is relatively rare these days. Private fees are more
commonly received for completing reports for insurance companies or solicitors
and are not part of a GP’s NHS service. In addition, GPs may charge for private
sick notes, completing a holiday cancellation form, conducting a pre-employment
medical or completing a cremation certificate. Also, some GPs act as occupational
health physicians for local firms or as school medical officers to private schools. All
these activities are sources of private income and could contribute up to 10% or
more of a GP’s income before they could affect cost or notional rent reimbursement
on GP premises.
General Medical Services (GMS)
These were divided into three main areas:
• basic practice allowance and patient registration fees
• target payments
• item of service payments.
Full-time GPs received a basic practice allowance (BPA) for 1 2 0 0 or more patients
registered with them. If they had less than 1 2 0 0 patients then the BP A was propor
tionately less. However, in addition to the BPA, the more patients that were regis
tered with a GP, the greater the income through capitation fees. This was a set
annual payment for providing care for patients 24 hours a day, 365 days a year.
This payment was greater for patients over the ages of 65 and 75. However, with
more patients came a greater workload and there was a ceiling number of regis
tered patients after which there were no additional payments.
Target payments were for providing cervical cytology services to women between
the ages of 25 and 64. Similarly, there were target payments for providing defined
childhood vaccinations to infants and boosters to preschool children. For both
groups there were lower and higher targets to achieve a lower and higher
payment. In the case of cervical cytology 80% of women within the above age
group had to have had a cervical smear in the preceding five years to achieve a
higher payment and the only people exempt were those who had had a hyster
ectomy (lower target = 50%). In the case of vaccinations the target was 90% to
achieve a higher payment (lower target = 70%). In both groups patients who
Getting paid under the 1990 contract 9
chose not to have a smear or have their child vaccinated would still count towards
the target payment. Ways of exempting patients in the new contract will be
discussed in a later chapter.
Item of service fees could be claimed for providing the following services:
• contraception advice
• inserting an intra-uterine device (IUD)
• administering certain vaccines, e.g., tetanus
• new patient registration health checks
• minor surgery and child health surveillance
• seeing temporary residents
• performing a night visit (for calls received and completed between the hours of
10pm and 8 am)
• maternity care
• arresting a dental haemorrhage
• other areas to be listed in the next chapter where they form part of the Global
Sum of the new contract.
Doctors who dispense vaccines and injectables or medication in rural areas
could and still can attract certain fees through the Prescription Pricing Authority
(PPA).
It can be seen from this information that a lot of data needed to be stored either
manually or (more usually) on computer so that the necessary individual claims
could be made. The new GP contract should reduce this clerical activity through
the payment of a 'Global Sum’, which is discussed in the next chapter. This reduc
tion in clerical activity has already been achieved for PMS practices where income
is based on the last GMS claims and associated uplifts with inflation and pay
reviews and changes with a practice list size. Most claims were made in arrears
and they could be claimed manually or through computer links with the local PCO
or Health Board. A practice manager would play a vital role in the smooth running
of this business side of a GP practice.
Other GMS income
For attending 30 hours per year of approved postgraduate educational activity in
the three designated areas of health promotion, disease management and service
management a fee of almost £3 0 0 0 could be claimed each year. This was paid
quarterly upon production of certification of attendance and was called the Post
graduate Education Allowance (PGEA).
There were practice activities for which GPs received partial or full reimburse
ment. For example, for employed staff whose employment is approved and fell
within the agreed staff budget, a reimbursement of 70% was usual. Reimbursement
was available for the salary of a GP registrar as well as the payment of a small
training grant and this will continue under the new contract. Payments for GPs
under the ‘GP retainer’ scheme payments should also continue.
Partial reimbursement may also have been available for computer expenses, such
as hardware and software and especially upgrades which will be a particular
feature of the new contract. The changes regarding funding of IT will be discussed
in a later chapter, but do not form part of what is called the ‘Global Sum’.
10 The GP Contract made easy - getting paid
Payments were also available for health promotion, chronic disease management
- e.g., in diabetes and asthma - and locally defined quality initiatives.
One further incentive for new GPs joining a practice was the ‘golden hello’
scheme of a one-off payment of usually £ 5 0 0 0 . GPs will need to enquire of local
PCOs whether this scheme will continue under the new contract.
Personal Medical Services (PMS)
PMS is very similar to GMS and many practices have converted to PMS subject to
agreement with the local PCT. In PMS a budget is estimated on the basis of the
previous year’s GMS claim and altered according to patient list size. This avoided
all the clerical work associated with making individual claims for the above. In
addition, it was possible to negotiate ‘PMS with growth’ and so the creation of
salaried nurse and GP posts to undertake new and locally agreed work for the
practice in conjunction with the local PCO. The changes to PMS as a result of the
new contract are discussed in depth in Chapter 8.
Payments relating to premises
There should initially be no change in the way that premises-related claims and
reimbursements are dealt with under the new contract for:
• cost rent and notional rent payments
• hazardous waste
• rates.
General practice as a 'business'
Being a GP involves knowledge of medicine and developing skills in running a
business. Usually, each partner in a practice looks after one area of practice income
in liaison with the practice manager. It need not be a burden or daunting if it is
well organised and efficient and a practice manager can undertake much of the
work. Great satisfaction can be gained from achieving quality patient care and in
the same way maximising income to which a GP is entitled. It allows for a degree
of independence which employed hospital doctors do not have unless they are
involved in private practice.
Why tell you all this?
First, it is to understand how the financial origins of the new contract have come
about as it is from these figures that the Global Sum of the new contract (discussed
in the next chapter) originates. Second, it is to appreciate that there are elements of
the 1 9 9 0 GMS contract that should in the author’s interpretation continue as they
are paid mainly three months in arrears for work undertaken prior to 1 April
2 0 0 4 . This is detailed in the Appendix. Individual practices will need to discuss and
negotiate such potential claims with their local PCO. If a practice is in doubt they
should seek advice from their LMC or the GPC of the BMA.
Getting paid under the 1990 contract 11
Practical point
Income from the ‘1 9 9 0 contract' should not stop on 1 April 2 0 0 4 . Some of it
should continue as many of the payments are in arrears and practice
managers should ensure that these continue to be paid or have been settled
by 1 April 2 0 0 4 . Under the 1 9 9 0 GMS contract the old regulations allowed
for claims to be submitted for up to six years. However, the limit for submit
ting these claims may be reduced to six months at a PCO's discretion.
