Summary: The care provider’s terms and conditions allow it excessive discretion to increase fees above a stated annual increase. That created anxiety and uncertainty for Mrs X when she was planning for Mrs A’s long-term care. BUPA says it is reviewing its terms and conditions. It should do so in line with the CMA guidance to ensure fairness and within a defined time period. In addition it should offer Mrs X a symbolic payment of £300 to recognise the uncertainty she has suffered as a result of its current practice.

The complaint

1. Mrs X (the complainant) says the annual increase of fees at her mother’s BUPA care home has been considerably greater than stated by the BUPA terms and conditions. This has caused considerable uncertainty about meeting the rising costs.

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The Ombudsman’s role and powers

2. We investigate complaints about adult social care providers and decide whether their actions have caused injustice, or could have caused injustice, to the person complaining. I have used the term fault to describe this. (Local Government Act 1974, sections 34B and 34C)
3. If an adult social care provider’s actions have caused injustice, we may suggest a remedy. (Local Government Act 1974, section 34H(4))
4. Under our information sharing agreement, we will share this decision with the Care Quality Commission (CQC).

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How I considered this complaint

5. I considered evidence provided by Mrs X and the care provider as well as relevant law, policy and guidance.
6. Mrs X and the care provider had an opportunity to comment on my draft decision. I considered their comments before making a final decision.

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What I found

Relevant law and guidance

7. The Health and Social Care Act 2008 (Regulated Activities) Regulations 2014 set out the fundamental standards that registered care providers must achieve. The Care Quality Commission (CQC) has guidance on how to meet the fundamental standards.
8. Guidance on Regulation 19 says providers must give people using the service information about the costs, terms, and conditions of the service, so that they can make decisions about their care, treatment or support.
9. The CMA (Competitions and Markets Authority) issues guidance to help care providers comply with their obligations under consumer law. Its guidance says “Simply stating that your fees may go up as a result of ‘increased costs’, ‘local market conditions’ or ‘the wider national economic picture’, will not make your terms fair. This type of general wording is both unclear as to what residents can expect and open to misuse, since residents can have no reasonable certainty over what the increases will be. Such terms also fail to recognise that, generally speaking, you are likely to be much better able to anticipate changes in your costs than residents are”.
10. The CMA guidance also states, “Terms which seek to ‘cap’ an annual fee increase but which still give you a very broad discretion to increase your fees, or without setting out clearly the circumstances in which a change may occur, are also likely to be unfair. This is because the resident will still be unable to foresee, in any meaningful way, the increases that they may be subject to in future and they can have no reasonable certainty that increases are actually cost reflective. In general, we would have concerns about terms which impose a ‘cap’ or ‘floor’ on fee increases, on the basis that any cap or floor is likely to be arbitrary and therefore not reflective of your genuine costs increases”.

What happened

11. Mrs A moved into a BUPA care home in June 2023. The terms and conditions of her residence state:

“7.1 The fees that Bupa charge are calculated taking a number of factors into account. Bupa will carry out a review of its fees annually, or more frequently if one of the events set out in clause 7.5 below should arise”

7.3 Bupa will apply an annual increase of 7% to the Total Fees (excluding any NHS Funded Nursing Care contribution to the Total Fees) per annum

7.5 In addition to annual fee reviews, Bupa will carry out a review of its fees if one of the following situations arise: …

7.5.5 In the event of high inflation and/or additional cost pressures – such that Bupa determines that the annual 7% increase provided for above is or is likely to be outpaced by inflationary and or cost pressures.”

Clause 8.2 of the terms and conditions says, “Staff escorts – if the Resident requires an escort for appointments or when they are away from the Home, we may, subject to availability, provide a member of staff at a charge for the time they spend away from the Home.”

12. Mrs X says Bupa increased the fees by 11.5% in December 2023 and again by 14.8% in January 2025. It had already increased the fees by 15% in January 2023.

The complaint

13. Mrs X wrote to Bupa in January 2025 after receiving notice of the increase in fees.
14. In its response Bupa said, “it has been widely reported we continue to face cost pressures due to the cost-of living increases that we are all experiencing and these continue to rise, including staffing costs, energy bills and food prices.” It said the increase of employer contributions towards National Insurance was an unforeseen cost, which had a significant impact on staffing costs. It said the increase in the national minimum wage and energy costs were other factors in the fee increase. It concluded, “While we always aim to keep our fee increases within expected levels, these factors mean we have had to increase our charges to retain our teams and maintain our usual high standards that our residents expect.”
15. Mrs X was dissatisfied and complained again to Bupa. The Regional Director responded in March to her concerns outlining the same factors previously put forward as the reasons for the increase. She reiterated that it would not be fair to reduce Mrs A’s fees as Mrs X requested. She also responded to other concerns raised by Mrs X about poor quality food, and charges for accompanied attendance at appointments.
16. Mrs X complained to us. She said the unexpected increases (above the increase %age suggested in the terms and conditions) have caused her anxiety and distress. She said “it is not a simple matter to shop around for a better deal and move a 91-year-old who is settled in their environment. She is in effect a captive audience”. She also complained about the way Bupa charges additional attendance fees for escorts to appointments such as doctors and dentists.
17. Bupa says, “Our terms and conditions have considered and followed CMA guidance relating to care home providers, first published in 2018 and we have adhered to these in our recent fee increases for our self-funded residents”. In respect of the increases above the suggested %age in its terms and conditions, it says “Unfortunately, given recent economic impacts and legislative changes impacting on businesses, such as the changes in National Insurance (which could not have been reasonably predicted) this has led to us having to apply a higher increase. As you will have noted, we have explained these reasons to the funder in advance of the increases being applied.”
18. Bupa also says “When we originally set out the 7% annual fee increase within our terms and conditions, the economic environment was relatively stable and predictable. However, in recent years, the landscape has changed significantly politically, legally, and economically. These shifts have led to substantial increases in costs across key areas such as property maintenance, food, wages, and energy.

Due to these ongoing cost pressures, we are currently reviewing our terms and conditions to determine whether any changes are necessary. In doing so, we are carefully considering the guidance from the Competition and Markets Authority (CMA) to ensure compliance and fairness’.”

Analysis

19. Bupa has raised its fees three times in the last three years above the 7% annual increase advertised in the terms and conditions given to residents.
20. On each occasion it has increased the fees, it has written to relatives or representatives detailing the unusual reasons why the increase is above the norm.
21. However, the terms and conditions on which Bupa has relied in applying the year on year increase do not in my view reflect the CMA guidance which says “Terms which seek to ‘cap’ an annual fee increase but which still give you a very broad discretion to increase your fees, or without setting out clearly the circumstances in which a change may occur, are also likely to be unfair.” It seems to me that Bupa has in fact given itself that very broad discretion which the CMA guidance criticises.
22. That has led to a situation where it is very difficult for people to plan for future expenses. As the CMA guidance says (4.44) “the resident will still be unable to foresee, in any meaningful way, the increases that they may be subject to in future and they can have no reasonable certainty that increases are actually cost reflective”. Mrs X makes the point that Mrs A is “effectively a captive audience”.
23. The terms and conditions set out clearly that a charge will be incurred for escorts to appointments. There is no evidence therefore of fault in charges being made for that purpose.

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Action

24. I welcome Bupa’s indication that it is currently reviewing its terms and conditions to determine whether changes are necessary, and that in doing so it will have regard to the CMA guidance. However, I have concerns about the open-ended nature of that indication. Therefore within three months of this final decision Bupa should provide details to us of its review, the outcome and how it complies with the CMA guidance on fairness in terms of its discretion around the stated annual increase %ages in the terms and conditions it provides as part of its contracts.
25. The fee increase applies consistently across all self-funded residents and therefore it would not be equitable, as Mrs X suggests, to refund Mrs A the increase.
26. However, within one month of my final decision Bupa should make a payment to Mrs X of £300 to recognise the additional anxiety she was caused by the lack of certainty over fee increases.
27. The Care Provider should provide us with evidence it has complied with the above actions.

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Decision

28. I have completed this investigation on the grounds that the actions of the care provider have caused injustice to Mrs X, which can be remedied by completion of the recommendations at paragraphs 24 and 26.

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Investigator's decision on behalf of the Ombudsman