With ever-increasing costs of providing care, and limitations in fees paid by local authorities, providers may wish to be able to top up publicly funded fees in order to earn a sustainable return on investment. Approaching this in the wrong way, however, carries serious risks, so it is vital that providers comply with the rules.

Funding by local authorities

The legislative regime and statutory guidance makes express provision for top ups. However, there are strict rules concerning the mechanisms. Two key points are:

  1. The resident can only pay the top themselves in limited circumstances, and
  2. The care home must contract with the local authority for the full price including the top up.

The local authority must also enter into agreement with the top up payer to make up the difference between what it would ordinarily pay, and what the care home charges. If the care home enters into an agreement with the local authority for the price net of the top up, the Ombudsman may find this unlawful and recommend that the local authority repays to the top up payer any sums it paid to the local authority. The local authority may then seek recovery from the care home. Where local authorities resist contracting with care homes for the full price, providers should accordingly draw to their attention the relevant parts of the Care Act Guidance and Ombudsman’s reports, to avoid any claims down the line.

Funding by CCGs

As a matter of constitutional principle, the NHS is a comprehensive service, free at the point of delivery. The ‘National framework for NHS continuing healthcare and NHS funded nursing care’, the guidance to which CCGs have a statutory duty to have regard, states:

‘Topping- up’ is legally permissible under legislation governing LA social care but is not permissible under NHS legislation.

However, the framework recognises that where it is possible separately to identify and deliver the NHS-funded elements of the service, top up charges may be lawful.

A case that came before the courts was that of care home that had standard rooms and hotel standard rooms. In a non-binding judgment, the judge commented:

‘It has always been the case within the National Health Service that those who wish to enjoy what are known in National Health Service jargon as ‘hotel‑type services’, may do so at their own cost…

By reference to what is on any view a fairly fine line, the defendant is thus able to provide free continuing health care while at the same time accepting that additional contributions can be made for facilities that may meet non‑health care needs.’

It may therefore be lawful to charge top ups for hotel services. CCG polices vary though. Some, like Kingston’s, expressly provide that top ups can be paid for ‘a more spacious bedroom’, whilst North Norfolk CCG has a detailed policy on the issue. Others limit examples to items such as TVs and hairdressing.

A common theme in the polices is that the charges should be for ‘wants’ rather than ‘needs’. A recurring phrase in the guidance is that additional charges may only be for ‘optional, non-essential items which an individual has chosen (but was not obliged) to receive and are not items which are necessary to meet the individual’s assessed needs and not identified as part of the care plan.’

Where care homes have only one standard of room, it may be difficult to distinguish the hotel standard room for which a top up is charged, and the standard room that the CCG contracts to fund. Even in such cases, however, it may be possible to defeat the rigid rules against top ups for CHC by separating the cost of care from the cost of accommodation. Legal advice should be sought before taking this course.

Conclusion

Top ups are a vital source of revenue to the care home sector but is important that contracts and operations are aligned to the legal rules that regulate them. If charged unlawfully, there is a risk of incurring significant liabilities over time. If in doubt, seek legal advice.