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Care homes win battle with health boards in Wales over funded nursing care

A High Court judge has quashed decisions by the seven local health boards in Wales in 2014 setting the rate for funded nursing care for the following five years, after a legal challenge brought by a group of care home operators and backed by local authorities.

The case of Forge Care Homes Ltd & Ors, R (on the application of) v Cardiff & Vale University Health Board & Ors [2015] EWHC 601 raised issues over who pays for the nursing care of care home residents in Wales.

The Welsh Ministers have overall responsibility for the National Health Service in Wales, a function which is largely exercised through the boards ("LHBs").

If a resident of a care home has a ‘primary need’ for nursing care, the full costs of providing all that resident's care (nursing and non-nursing) are borne by NHS Wales, the responsibility for funding that care falling on the LHB in whose area the resident lives. This is known as ‘Continuing Health Care’.

Where the resident requires some nursing care, but nursing is not his or her primary need, the relevant LHB will pay only part of the care costs. This contribution is known as ‘Funded Nursing Care’ ("FNC").

In such a case, dependent upon means, the resident in question and/or the relevant local authority is responsible for paying for the remainder of the care costs.

The claimants in Forge Care Homes challenged the LHBs’ decisions in 2014 on three grounds.

The first was that the decisions to set the FNC rate were based on an erroneous approach to the nursing care costs that LHBs are required to bear under the relevant statutory scheme; and, in particular, an erroneously restrictive interpretation of the term ‘nursing care by a registered nurse’ for which the scheme requires the relevant LHB to pay.

As the local authorities are prohibited by statute from paying any such costs, for those residents for whom the State is liable to pay for all reasonable care needs, there exists a "funding gap", i.e. care costs which neither the LHB nor the relevant local authority will pay. Those costs thus have to be borne by the owner/operator of the care home itself. For self-funded residents, the error means that they themselves have to bear the costs of this shortfall in LHB provision.

The second ground was that having identified a funding gap, the LHBs failed in their obligation to engage in discussions with local authorities and care home providers with a view to resolving the issue by identifying who would be responsible for funding the services in that gap.

The third ground related to the FNC rate being fixed for the year 2014-15, based on a decision in 2013 as to rate with an inflationary uplift; and then subject to an annual uplift in the following four years.

It was submitted in this respect that the LHBs erred in: (i) failing to consult and/or engage in discussions with the service providers with regard to this means of annual review; and (ii) linking those uplifts to the annual increase, if any, in the pay of the lowest grade of nurse employed by NHS Wales.

All local authorities in Wales, with the exception of Cardiff, appeared as interested parties, as they might be liable for any care costs for which the local health boards were not responsible.

Mr Justice Hickinbottom, who heard the case in Cardiff, upheld the claim.

The High Court judge said the approach of the FNC Review Group – a task group set up by the boards – had been “fundamentally flawed”, in that it had restricted the services which s. 49 of the Health and Social Care Act 2001 prohibited local authorities from providing to those individual tasks which, by virtue of their expertise and experience, only registered nurses could perform.

The care homes – with the backing of the councils – argued that this approach was flawed because there was a statutory requirement for a registered nurse to be present at all times.

The defendant LHBs conceded during the hearing that in calculating ‘nursing care by a registered nurse’ within the meaning of s. 49 the LHBs erred in law in excluding stand-by time.

However, their counsel went on to that the boards could properly take into account the way in which the providers' businesses were run and the businesses' other sources of income.

In particular, she argued, they could take into account the fact that the local authorities did in fact bear the costs of registered nurses' time when they (for example) provided personal care, because all personal care costs were borne by those authorities.

The boards contended that they were entitled to reduce the FNC rate to take into account that fact, to avoid care home providers being paid twice for the same nurse time. This, the LHBs’ QC submitted, justified the exclusion of those elements of registered nurses' work from the FNC assessment.

But Mr Justice Hickinbottom said he could not accept that proposition, concluding that the services that the boards were required to provide by way of FNC were effectively defined by s. 49.

“More substantively, the section defines the services which local authorities are prohibited from providing; and, as the LHBs accept, if local authorities and LHBs act properly, all reasonable care requirements of care home residents who have the benefit of section 21 assistance must be met by either one or the other (i.e. there can [be] no funding gap),” the judge said.

“Therefore, the care services that section 49 prohibits local authorities from providing must be provided by the relevant LHB. Section 49 requires a line to be drawn, and that line is not subject to some general discretion in the relevant LHB: as [the QC for the local authorities] submitted, the care services which a local authority is required to pay for cannot be dependent upon the exercise of such a discretion, one way or the other.”

The judge said his finding on ground 1 made it unnecessary to consider whether the boards acted unlawfully in any other way. However, he did briefly address the other grounds raised in the challenge.

Mathew Purchase of Matrix Chambers appeared for the claimants, instructed by Alison Castrey. Richard Gordon QC and Emily Mackenzie of Brick Court appeared for the local authorities, instructed by Rhys Stevens of Ceredigion County Council.

Fenella Morris QC and Benjamin Tankel of 39 Essex Chambers acted for the defendant local health boards, instructed by Blake Morgan. Tom Cross of 11KBW appeared for the Welsh Ministers, instructed by Welsh Government Legal Services.