Nazareth Care Charitable Trust (20 002 290)

Category : Adult care services > Residential care

Decision : Upheld

Decision date : 30 Apr 2021

The Ombudsman's final decision:

Summary: We upheld a complaint about fees. The Care Provider failed to give key information in writing about fees, failed to respond to correspondence fully or at all and did not treat funded nursing care payments in line with its contract. The Care Provider will apologise, adjust Mrs Y’s charges, make Mr X a payment to reflect his avoidable time and trouble and review its contract and procedures as described in this statement.

The complaint

  1. Mr X complained for his mother Mrs Y that Nazareth Care Charitable Trust (the Care Provider):
    • did not provide a contract, price list or any correspondence explaining the charges for her care.
    • failed to offset Funded Nursing Care (FNC) payments against the fees.
    • failed to fully address his complaint.

 

  1. Mr X said the outstanding charges for Mrs Y’s care are incorrect and the Care Provider owes her money.

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The Ombudsman’s role and powers

  1. We investigate complaints about adult social care providers and decide whether their actions have caused an injustice, or could have caused injustice, to the person making the complaint. I have used the term fault to describe such actions. (Local Government Act 1974, sections 34B and 34C)
  2. If an adult social care provider’s actions have caused an injustice, we may suggest a remedy. (Local Government Act 1974, section 34H(4)
  3. We may investigate matters coming to our attention during an investigation, if we consider a member of the public who has not complained may have suffered an injustice as a result. (Local Government Act 1974, section 26D and 34E, as amended)
  4. Under the information sharing agreement between the Local Government and Social Care Ombudsman and the Care Quality Commission (CQC), we will share this decision with CQC.

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How I considered this complaint

  1. A colleague discussed the complaint with Mr X and considered the information he provided. I made enquiries of the Care Provider and considered its response and documents. I also considered comments from both parties on drafts of this statement.
  2. Mr X and the Care Provider had an opportunity to comment on my draft decision. I considered any comments received before making a final decision.

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What I found

Relevant guidance and legislation

  1. Regulation 19 of the Care Quality Commission (Registration) Regulations 2009 says care providers “must give people information about the terms and conditions of their care, treatment and support, including the expected costs… Providers must notify people of any changes to their terms and conditions including increases in fees and give them sufficient time to consider whether they wish to continue with the service”.
  2. Guidance on Regulation 19 from the Care Quality Commission (CQC) says:
    • People must be given a written copy of the terms and conditions (including a written contract) that they must agree to before their care, treatment or support begins.
    • Information must include the terms and conditions of their care, treatment or support, including the expected costs and the requirement to pay for their care, treatment and support. This applies to people who pay the provider in full or partially.
    • If a fixed price cannot be given, people should receive an estimate which includes details of any likely costs
    • Providers must notify people of any changes to their terms and conditions, including increases in fees and give them sufficient time to consider whether they wish to continue with the service.
  3. Guidance from the Consumer and Markets Authority (CMA) (UK care home providers for older people – advice on consumer law, November 2018) is similar to the CQC guidance set out above. The CMA guidance says key information about fees should be provided on first contact from a potential resident or their family, which could be in an email or by signposting to a website. Key information includes:
    • Information about weekly fees for self-funders for each type of care service offered should be given to prospective residents in writing
    • Any services which are not included should be specified.
  4. The CMA guidance goes on to say key information should also be given in writing (for example, in an information pack) during a first visit to the home, before a prospective resident makes any decisions about taking a place.
  5. FNC payments are made by the NHS to nursing homes for the provision of nursing care by a registered nurse. Eligibility for FNC is by assessment. Payments are administered by the resident’s local clinical commissioning group (CCG) and are made directly to the care provider.
  6. The government announces the FNC rate on its website each year. On 5 April 2019, the government said FNC would be £165.56 from April 2019: NHS-funded nursing care rate announced for 2019 to 2020 - GOV.UK (www.gov.uk). An announcement on 30 April 2020 said the rate would be further increased to £180.31 from April 2019 and this would be backdated to 1 April 2019: NHS-funded nursing care rate announced for 2020 to 2021 - GOV.UK (www.gov.uk)
  7. The National Framework for NHS Continuing Health Care and NHS Funded Nursing Care November 2012 (the “National framework”) explains how FNC affects other funding for care. It says,

“The Care Home provider should set an overall fee level for the provision of care and accommodation. This should include any registered nursing care provided by them. Where a clinical commissioning group assesses the residents needs require the input of a registered nurse they will pay the NHS funded nursing care payment (at the nationally agreed rate) direct to the care home, unless there is an agreement in place for this to be paid via a third party (e.g. a local authority). The balance of the fee will then be paid by the resident, their representative or the local authority unless other contracting arrangements have been agreed”.

  1. In 2011 the Department of Health published answers to frequently asked questions on FNC funding for local authorities and others. On the impact of FNC funding on self-funders, the advice is:

“the specific arrangements are dependent on the terms in their contract with the care home. Depending on the terms, in some situations the overall fee would increase to reflect the increase in NHS FNC and the resident’s contribution would remain the same. In other situations the overall fee would remain the same and the resident’s contribution would decrease”.

  1. In January 2018 we issued guidance for care providers on FNC payments. This set out our approach to complaints that involve care providers’ treatment of FNC funding. We will interpret contracts on an ‘ordinary reading’ and “are likely to find fault where a contract term is ambiguous, inconsistent or poorly drafted. We may also find fault where a contract… is silent on the treatment of FNCs”.
  2. We also said it was acceptable to issue a new contract if circumstances change, as long as a person has time to decide whether they can afford any increase. We said “A resident’s contribution could stay the same or fall when FNC comes into effect. What happens depends on the care provider’s terms and conditions. The contract needs to explain how the care provider treats FNC payments”.
  3. CMA guidance says each country in the UK:

“has its own policy arrangements around FNC payments and the relationship with residents, including self-funders. You should have regard to these arrangements when providing information to residents about your fees and in drafting relevant terms. Your terms, together with the upfront information you provide to residents about your fees, should clearly explain what FNC is, the resident’s potential entitlement to it, and how you treat FNC payments when the eligible resident is self-funded.”

The Care Provider’s standard terms and conditions and contract

  1. The Care Provider’s standard terms and conditions and agreement for self-funders says:
    • Clause 2.2.2: the fee may increase each year usually on 1 April, by giving at least four weeks’ notice in writing
    • Clause 2.2.3: the fee may also increase on four weeks written notice if care needs change or costs of providing a service increase
    • Clause 2.3.1: If an authority awards a contribution after a resident moves in, the care provider charges the full fee less the contribution. It may reduce the fee at its discretion.
    • Clause 2.3.2: If the authority backdates a contribution, the care provider either uses the backdated payment towards outstanding amounts owed or refunds the resident.
  2. Clause 4 deals with local authority funded residents. It includes the treatment of client contributions and third-party top-ups. Client contributions are payments a council funded resident makes to a council for their care. There is no contract between the resident and the care provider if the council commissions the placement. The only possible role for the care provider might be as the council’s agent in collecting the resident’s contribution on behalf of the council. But there should be no contract or written agreement between the resident and the care provider in this scenario.
  3. Third-party top-ups are payments a person other than the resident (usually their relative) makes towards the cost of their care. A third-party top-up is only applicable where a council contracts with a care provider for the resident’s care. The law and statutory guidance for councils says an agreement (contract) for a top-up should be between the third party and the council. The care provider has no role in a top-up agreement, although it may collect the top up payment if the council asks it to. If the third party stops paying the top-up the council is responsible for paying the full fee.

What happened

Background

  1. Mrs Y paid for her care privately. Mr X is her legal representative and manages Mrs Y’s finances. Mrs Y moved into the Care Provider’s nursing home in September 2018. Before this she lived in another nursing home in a different area where she received FNC payments from the local CCG. The CCG stopped the FNC payments in September 2018 when Mrs Y moved into the Nursing Home. Mr X did not realise this at the time.

Key events

  1. Mr X told us one of the Care Provider’s staff told him verbally at the start of 2018 that the weekly fee was £900 for a room in the nursing unit and £800 for a room in the residential unit. The Care Provider disputes this and has not been able to check as the member of staff no longer works for them. The Care Provider told us it does not have a price list.
  2. The Care Provider told us it sent Mr X a contract to sign in late October, but he did not return it. This concurs with Mr X’s email to the Care Provider after Mrs Y moved out. (see paragraph 38)
  3. Mr X also told us another member of staff told him verbally on the day Mrs Y moved in that the weekly fee was £1000 and he also met with another member of staff at the end of October who said they would look into the different amounts quoted and send a revised contract.
  4. Invoices in December charged £1200 per week for Mrs Y’s care. When Mr X challenged the fee, the Care Provider reduced it to £1000 per week and credited the appropriate amount to Mrs Y’s account.
  5. In December, Mrs Y moved to a larger room. Mr X told us he had previously been advised bigger rooms did not attract a higher charge. He provided invoices for December and January. The December invoice reflected the reduced fee of £1000 though Mr X still disputed the fee being charged. The January invoice noted the change of room and the same weekly amount of £1000.
  6. The Care Provider increased the weekly fee to £1200 from February 2019. Mr X queried the February increase to £1200 with the Care Provider but did not receive a response. He also asked why FNC payments were not being deducted from Mrs Y’s fees.
  7. In April, the Care Provider increased its fees by 5% and wrote to Mr X to advise him beforehand. The weekly charge was now £1260.
  8. In May, the Care Provider told Mr X it was not getting FNC for Mrs Y. He contacted the CCG resulting in backdated payments of FNC to the Care Provider.
  9. Mrs Y’s fees did not reduce by the amount of the FNC payments. Mr X queried this with the Care Provider in August. It replied that fees charged to residents were not inclusive of FNC and it invoiced the CCG separately for the FNC payments and the weekly fee of £1260 remained.
  10. Mr X met with the Care Provider in October. There was no written record of this meeting.
  11. Mr X emailed the Care Provider at the start of November saying:
    • At the meeting, he was told the fee for a nursing place was £1104
    • The manager said the fee would be £900 before Mrs Y moved in, then the new manager said after she moved in it would be £1000 and at the end of December a new manager said Mrs Y could have a larger room at £1200.
    • In April he was told the fee would go up to £1260
    • In May he found out FNC payments had stopped in September 2018 and was not picked up by the new local CCG
    • Both CCGs had confirmed FNC payments had now been made and were up to date
    • The Care Provider had said the fee would still be £1260 despite receipt of the FNC and he was confused about this and expected a reduction to reflect FNC payments
    • He wanted an explanation about (1) why the FNC was not deducted from the invoices, (2) the discrepancy between the invoices (£1260) and the cost stated at the meeting (£1104) (3) why there was no signed contract.
  12. The Care Provider did not reply to Mr X’s email.
  13. In March 2020 Mrs Y moved to a different nursing home run by another care provider. The Care Provider emailed Mr X saying Mrs Y owed £22509.00. Mr X responded saying he would not pay until he had a response to his email in November about the fees.
  14. There was a further exchange of emails between Mr X and the Care Provider saying it would alter the weekly charge to £1050 from the start of the placement to 31 March 2019 and £1104 thereafter. This reduced Mrs Y’s outstanding bill to £13,922.60. It also waived the notice period. However, it refused to alter its position on the FNC payments saying these were separate to the fees charged to residents.
  15. Mr X made a payment of £1368.14 leaving a balance of £12,554.17. He said in an email to the Care Provider at the end of March 2020 that he would make no further payments because FNC payments had not been correctly applied to Mrs Y’s account and the Care Provider should have put in place a formal contract. He said he had looked at his records and he received a contract in October 2018 which he did not sign because it had the wrong name, wrong amount and no breakdown of funding contributions. He said he spoke to the manager at the time who said she would provide a second contract but never did.
  16. The Care Provider replied saying:
    • The cost of Mrs Y’s care when she left was £1104 plus £165.56 (FNC): a total cost of £1269.56.
    • It invoiced the CCG separately for FNC.
    • It considered it had accommodated him by accepting his suggested rate regardless of room changes and by waiving the notice fee.
  17. Mr X continued to object to the Care Provider’s approach to FNC payments and to raise concerns about the lack of contract and poor communication about fees. In response the Care Provider said that it would take legal action to recover the unpaid fees. It provided Mr X with its complaint procedure and terms and conditions and confirmed it did not have a price list.
  18. Mr X complained to the Care Provider at the start of May about the management of FNC payments, the lack of clarity regarding fees, the failure to provide a contract and the failure to reply to his enquires.
  19. Mr X received no response and chased a reply in June. The Care Provider replied that day. It said that Mrs Y moving into the home and payment of invoices represented acceptance of an agreed unwritten contract. It accepted it had communicated poorly with Mr X. It offered to reduce the amount owed to £10,000 if he paid by 12 June. It did not change its view on the FNC payments.
  20. Mr X wrote back saying the response failed to address his concerns or advise him how to escalate this complaint. He also said that Mrs Y had overpaid by £13,986.36 because she should have been paying £900 per week, as initially quoted, and the FNC payments had not been deducted from her fees. The Care Provider did not respond and so Mr X complained to us.
  21. The Care Provider told us paperwork it provided before Mrs Y moved in stated a fee of £1200. However, the Care Provider has not disclosed this paperwork. The Care Provider also told us:
  • The weekly rate did not include FNC payments. It invoiced the NHS for these separately which is why its terms and conditions for residents did not refer to them.
  • It did not quote a weekly fee of £900 to Mr X.
  • As Mr X paid invoices for £1200, he had accepted the fee of £1200. Nevertheless it reduced the fee to £1050 in March 2020.
  • No contract was signed but a contract was sent in October 2018.
  • There was no price list. Managers of the care home determined the fee based on the resident’s needs.
  • £12,554.17 remained outstanding for Mrs Y’s care.
  • It had not received confirmation from the CCG that the FNC rate was £180.31 for 2019/20, but the CCG paid according to the invoices the Care Provider sent.

Findings

Failure to provide information in writing about the fees and prices charged before the placement started and failure to ensure a signed written contract was in place

  1. The Care Provider did not give Mr X or Mrs Y a price list or written confirmation of the fees before Mrs Y’s placement began. Nor did it put in place a signed written contract containing the agreed terms and conditions. The failure to provide key written information about the fees and a written contract was fault. The Care Provider failed to act in line with Regulation 19 of the CQC’s Registration Regulations or with guidance from CQC and the CMA set out in paragraphs 9 to 11. The CQC guidance is clear that a prospective resident or their representative should receive key written information before care starts. The lack of written information about the weekly fee and the lack of a contract containing terms and conditions before Mrs Y moved in caused avoidable confusion which continued throughout.
  2. Mr X received a contract in October 2018 (after Mrs Y moved in) which he did not return because of inaccuracies. I am satisfied on a balance of probabilities that Mr X was aware of the Care Provider’s general terms and conditions, although some of the specifics as applied to Mrs Y may have been wrong.
  3. I consider the Care Provider should have taken more action than it did to find out why Mr X had not returned the contract. Mr X said he discussed this with the manager in place at the time and she agreed to send an amended contract, but this did not happen. It was fault of the Care Provider not to discuss and if necessary correct errors in the contract Mr X received by sending him an amended version to sign and ensuring he signed and returned it. The Care Provider’s failings were poor administration.
  4. The Care Provider reduced Mrs Y’s weekly fee to £1000 from the date she moved in to 31 January 2019. The Care Provider told us Mrs Y’s fees increased when she moved to a larger room in December 2018. The lack of a written price list means there is no simple way of evidencing this, so I need to look at the circumstances at the time. On the basis of the evidence that is available, I am satisfied a larger room did not attract a higher charge:
    • The invoices in January continued to charge £1000 in January 2019 although Mrs Y had already changed room. And, the January invoice gave the new room number which indicated that the accounts department was aware of the room change. Had the policy been to charge a higher rate, this should have been applied to the January invoice
    • Mr X said he was told a larger room was not more expensive
    • The Care Provider initially charged Mrs Y £1200 a week for the first room and then sought to charge £1200 from February 2019 for the larger room.
  5. For the reasons in the previous paragraph, I consider the Care Provider’s statement that it charged more for bigger rooms was not evidenced by its invoicing at the time or its practices and it sought to justify an arbitrary increase after the event. There was no basis for it to increase the charge when Mrs Y moved rooms.

FNC payments

  1. When considering a complaint about FNC payments we normally look at the contract between the Care Provider and the resident when the placement commenced. There is no automatic right to a refund or fee reduction when FNC payments are awarded and it will depend on what the resident’s contract says.
  2. I am satisfied Mr Y received a copy of a contract which contained the Care Provider’s standard terms and conditions because he acknowledged he had in an email to the Care Provider. On an ordinary reading, Clause 2 of the terms and conditions says residents who already have an ‘authority contribution’ when they move in will be charged net of the contribution. And those who get an ‘authority contribution’ awarded after they move in will get a refund of the amount of the contribution.
  3. I consider the wording of Clause 2 and the reference to an ‘authority contribution’ is not specific enough. Clause 2 should specify ‘FNC payments from the CCG’ and not ‘authority contributions’. The lack of specificity is fault causing confusion. We generally interpret ambiguity in a contract in favour of the resident who has less bargaining power. I consider the wording of Clause 2 means Mrs Y should have received a refund equivalent to the FNC payments. This is because she was awarded FNC after the previous CCG stopped it in September 2018 when she moved out of the previous nursing home. The new CCG made payments retrospectively and backdated these to the date Mrs Y moved in.

Complaint handling and communication with Mr X

  1. I also find the Care Provider at fault in its handling of Mr X’s enquiries and his complaints. It ignored Mr X’s communications and did not provide timely and complete responses addressing the issues when it did reply. Its complaint response did not signpost Mr X to the LGSCO. This put him to avoidable time and trouble, delayed a conclusion of matters and increased the distress and uncertainty to him and Mrs Y.

Additional issues

  1. The Care Provider’s contract for self-funders includes clauses about residents who receive local authority (council) funding. If a council funds a resident’s placement, then the contract for the resident’s care is between the council and the care provider and not the care provider and the resident. And any top-up agreement is between the third party and the council. The law is quite clear that any increase to the top up is a matter which the council should be involved with and is not something that a care provider should be negotiating with the third party. If a care provider wants to increase the top-up, it needs to seek approval from the council which funds the resident and we would be critical of any top-up arrangements that a care provider has made directly with the third-party and without discussion with the relevant council.
  2. If a council funds a resident’s care, the contract and any arrangements for payment of resident contributions are between the resident and council. They have no place in a self-funders contract.

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Agreed action

  1. The Care Provider already agreed reductions in the fee and in the money it said was outstanding for Mrs Y’s care. The basis for these reductions was unclear making it hard to work out what should have happened but for the fault. In view of the lack of clarity about charges, disputed verbal statements, the lack of a signed contract, the general overall confusion and multiple changes applied to Mrs Y’s account, I recommend and the Care Provider has agreed that:
    • Mrs Y’s fee should be £1000 per week until 31 March 2019.
    • After 1 April 2019, the weekly fee should be £1050.
  2. I note also that the Care Provider was unaware the government retrospectively increased the FNC rate for the financial year 2019/20 by a further amount in an announcement at the end of April 2020. The Care Provider has only invoiced the CCG for Mrs Y’s FNC at the rate the government announced in April 2019 (£165.56). There has been a subsequent increase to £180.31 which the Care Provider needs to claim from the CCG. There is no justification for waiting for the CCG to pay the outstanding money. This is due to the Care Provider for Mrs Y’s nursing care and it needs to claim the payment retrospectively from the CCG.
  3. To remedy the injustice caused by the fault I have found, the Care Provider will, within one month:
    • Apologise to Mr X in writing, following the guidance on apologies available here: Resources for care providers - Local Government and Social Care Ombudsman
    • Pay Mr X £500 to reflect his avoidable time and trouble and distress in raising the same issues multiple times with no response or a poor response and receiving a poor complaint response
    • Make adjustments to Mrs Y’s outstanding balance to reflect my recommendations in the last two paragraphs. Calculations are in an appendix to this statement and the outcome is the Care Provider needs to refund Mrs Y £620.97.
  4. In addition, within three months, the Care Provider will:
    • Review the terms and conditions in its contract so Clause 2 refers to FNC payments specifically
    • Ensure its staff (managers or other appropriate staff) provide all prospective residents or their representatives with the key information about services and their cost described in paragraph 10 and 11 and with a written contract before a new resident moves in (or within a week if an emergency admission)
    • Publish details of its fee structure and a price list to prospective residents on its website and in leaflets with a breakdown of the different elements of the charge
    • Ensure it has written information packs for prospective residents, including key information about fees, which can be handed out at the end of an initial visit
    • Ensure complaint responses include information to residents on how to escalate complaints to the appropriate bodies should they be unhappy with the Care Provider’s final complaint response.
  5. We have powers to recommend a body takes action to resolve injustice to others who have not complained. It has come to my attention during this investigation that local authority-funded residents or their representatives may have suffered an injustice because of the Care Provider’s contract. Clause 4 of the contract may allow the Care Provider to increase a top-up without the relevant local authority’s knowledge. The Care Provider needs to remove Clause 4 from its contract for self-funders within three months of this statement. This is because the Care Provider has no role in contracting with a resident or a top-up payer when a resident’s care is commissioned and funded by a council.
  6. We will require evidence the Care Provider has taken all the actions described in paragraphs 56 to 60.

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Final decision

  1. I upheld a complaint about fees. The Care Provider failed to give key information in writing about fees, failed to respond to correspondence fully or at all and did not treat funded nursing care payments in line with its contract. The Care Provider will apologise, adjust Mrs Y’s charges, make Mr Y a payment to reflect his avoidable time and trouble and review its contract and procedures as described in this statement.
  2. I have completed the investigation.

Investigator’s decision on behalf of the Ombudsman


Appendix: Calculations for refund

FNC payments due from the CCG based on the applicable FNC rates are £13,315.19, made up of the following amounts:

  • 17/9/18 - 31/3/19 (28 weeks at FNC rate of £158.16) = £4428.48
  • 1/4/19 - 8/3/20 (49 weeks at FNC rate of £180.31) = £8835.19
  • 9/3/20-10/3/20 (2 days at FNC rate of £25.76 per day) =£51.25

Charges for Mrs Y recommended by the LGSCO and agreed by the Care Provider:

  • 17/09/19 - 31/3/19 (28 weeks at £1000 per week)= £28,000
  • 1/4/19 -10/3/20 (49 weeks and 2 days at £1050 per week) =£51,750
  • Four weeks’ notice period as the Care Provider decided not to waive the four week notice period. Four weeks at £1050 per week equals a further £4200.

So the total amount for Mrs Y’s care is £83,950 as per our recommendations. £83,950 less the £71,255.78 Mr X already paid and the FNC Payments due of £13,315.19 means Mrs Y is due a refund of £620.97 from the Care Provider.

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Investigator's decision on behalf of the Ombudsman

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