Key considerations for your care contract

This article aims to assist care home providers in drawing up contracts for the provision of care for older people. Contracts are usually formed when a resident accepts the care provider’s terms and conditions.

It is important that your terms and conditions and other contractual documents are right from the outset, both to ensure that provisions are robust enough to afford you adequate protection and that they are fair to consumers.  Terms which are unfair will not be valid and, as such, will not be legally enforceable.

We detail four key areas for consideration when drafting your terms and conditions and explains ways in which you, as a care provider, will benefit from having legally-compliant contractual terms in place.  The matters set out below do not constitute an exhaustive list and care providers should seek legal advice to ensure that their terms and conditions are lawful.

Key provisions

Payment terms

It’s imperative for costs to be clearly outlined, including how payments will be made and by whom. You should also consider whether you need to add additional provisions to cover any deposits required, how often payment is taken, any additional membership fees, whether fees are paid in arrears or advance, top-up fees, additional charges or extras, and notice periods for any price increases.

However, pricing needs to be considered in line with guidance for care homes issued by the Competition and Markets Authority (“CMA”) in 2018, following a market study into residential and nursing care homes for older people. A key takeaway from the guidance was that care providers are obliged to ensure that terms and conditions are user-friendly, clear and unambiguous. Transparency and clarity are crucial when providing important information to residents and families, especially when it comes to fees, terms relating to which must be clearly highlighted, easily accessible and not “hidden”.

Examples of what could be deemed as “unfair” pricing terms could include:

• The ability to increase fees unexpectedly and arbitrarily without informing the resident in advance
• Omitting key pricing information
• Including the requirement for a substantial security deposit without clear justification
• Charging fees for an extended period of time following a resident’s death
• Charging administration fees.

Termination

Should either you or the resident decide to terminate the contract for whatever reason in the future, you need to ensure that the terms and conditions properly outline the process for this. You should include provisions for matters such as relevant notice periods,  applicable termination fees or obligations for the resident to remove their belongings from the premises.

Conversely, you may also want to include termination provisions where you can unilaterally decide to end the contract or withdraw care services. To be valid, the reasons for doing so must be reasonable, explained clearly and presented “upfront” to the resident. Some justifiable bases for unilateral termination could be either repeated default in payment of fees by the resident, or whereby the care home could genuinely no longer meet the resident’s needs for reasons beyond the provider’s control.

Complaints procedure

From a compliance and CQC regulation perspective, the care home’s formal complaints procedure should ideally be outlined in the contract. This on the basis that you as a care provider are obligated to make your complaints handling procedure easy to find, easy to use and fair. Likewise, it should be straightforward for the resident to complain and the care home must never discourage them from doing so.

Key information

As a care provider, you are obliged to provide a substantial set of key information including:

• (i)Whether you accept self-funded and state-funded residents
• (ii) The type of care needs which will be provided
• (iii) An overview of the facilities provided, including the number of beds and staffing arrangements
• (iv) The latest inspection rating
• (v) Disclosure of any unusual or important terms and conditions, for example  requirement for a guarantee upon entering into the contract.

In addition to the care contract, a copy of any applicable local rules would also need to be provided to the resident.

Why does this matter to you?

Incorporation

You want to ensure that the resident – or an authorised person acting on their behalf – has sight of, and agrees with, the full terms of the contract right from the onset.

Where the resident is mentally incapable, or has a lasting power of attorney in place,  another person may sign the contract and enter the resident into care on their behalf.

Avoiding a dispute

You want to avoid the time and money that a claim may bring. The CMA has specified how certain terms could be deemed “unfair” and that they may decide to take legal action against the care home as a result. For example, the CMA took action against Care UK, one of the largest care home providers, for alleged past failings in respect of their practice charging administration fees.

Other wider terms that could also be deemed to be unfair and void could be pertaining to:

(i) An attempt to exclude the care provider’s liability for the death or injury of the resident (ii)An attempt to oblige the resident to vacate immediately from the property without notice.

It’s therefore imperative that the drafting of your terms and conditions is carefully considered and that appropriate legal advice is sought, to ensure the terms are compliant and legally binding. The CMA’s seemingly ‘hard-line’ approach of late also shows how important it is for care home operators to consider their guidance and, where necessary, amend their existing terms and conditions.

CQC

You will want to ensure that the care contract adheres to relevant CQC regulation and guidance, for example  in respect to complaints, referrals and standard level requirements.

GDPR

You will be using and processing personal data, including sensitive personal data, in delivery of care services to the resident and, under data protection laws, you must have a lawful basis for doing so. Data protection should be dealt with within your contract and privacy policy.