Valerie is a partner and national director of medical services at chartered accountants PKF
T 01483 564646
Over the last year, there has been a considerable increase in the number of practices being put up for Alternative Provider Medical Services (APMS) tender by the primary care trust. These can be new start-up practices in development areas, existing practices where the list is available on the retirement of a sole practitioner, or existing PCT-managed practices where the PCT wants to return PCT-managed services back to independent status.
Under the old General Medical Services (GMS) contract, an initial practice allowance was available for start-up practices in areas of major housing development where there would be a significant and rapid growth in the population. That allowance has now ceased, and such practices are put out to tender.
Historically, singlehanded GPs coming up to retirement would either take on a partner or merge with another practice a few months before the GP retired, so that the practice would be passed on to a new singlehanded GP or be amalgamated into another local practice. Now, however, the PCT will very often intervene and determine the future of such practices by making them available as an APMS bid.
Similarly, practices that had come under PCT management as a result of GP partners not being available were very often revived by the PCT, which would introduce salaried doctors who would be given first refusal on taking over the practice. Now such practices are often put up for competitive tender.
The background to the type of practice and the rationale behind the APMS tender process is important in putting together a bid – bidding for an existing practice list is a very different situation to bidding for a practice where the patient numbers are uncertain and will be rapidly changing.
PCT service outline and specification for the provision of GMS
The background to the practice, the reason why it is available for tender and the requirements of the PCT are all set out in the PCT's "Service Outline and Specification for the Provision of General Medical Services" document.
If any practice becomes available in your area, it is worthwhile expressing an interest and obtaining this document, as it provides a useful insight into the strategy of the PCT. Also, it can sometimes be necessary to bid for a practice as a measure to protect your existing business from competition, as much as due to a desire to expand and roll out new services.
The APMS bidding process involves the following steps:
Rather like an exam question, you need to keep going back to the service outline and specification to be sure that you are fulfilling the PCT's requirements and strategy in your tender documents at every stage.
The service outline will give information regarding the background to the availability of the practice, its list size, the premises, staffing and services to be provided. It should detail the key considerations to be addressed in the prequalification questionnaire and, most importantly, the timetable for the bidding process.
Prequalification Questionnaire (PQQ)
This is the first stage, and is generally designed for completion electronically. The shortlist for the next stage is drawn up from the completed questionnaires, so it is important to address the core requirements as clearly and as fully as possible at this stage, and to provide a clear outline of projected costs. This is a competitive process, so it is useful to gauge the competition, whether it be from other GP practices or from private companies, and to emphasise criteria where you have a competitive advantage.
Section 1 of the PQQ requires details of the applicant. Section 2 should set out headings for the key considerations, which you will need to complete with the details of how you propose to provide or meet the requirements set out in the service outline, and any constraints or risks that may prevent you from fully meeting any of the requirements.
Typical headings are:
Under the old Type 2 Allowance, new practices were risk-free for GPs in the start-up years, as all costs were reimbursed together with a minimum level of profit for the GPs. APMS start-ups are not so risk-free, so great care needs to be taken in estimating the costs and the price per patient in the budget.
It is therefore crucial to review the financial projections at each stage of the tendering process, particularly as more information about the target practice is made available. Although the financial overview in the PQQ is often not reviewed by an accountant in order to minimise costs at the initial tendering stage, it is important to have the budget reviewed fully at the business-plan stage, and to be able to answer questions on the budgeting process at the presentation stage.
The PCT is looking for value for money, but the successful bidder needs to be careful that the APMS budget is realistically priced to give a fair return.