Health and Social Care Regulatory Due Diligence Support

Our team is at the forefront of major regulatory changes affecting the health and social care sector and has extensive experience of advising clients on a wide range of regulatory issues including specialist transactional due diligence.

02/06/2015

Carlton Sadler

Carlton Sadler

Senior Associate

Our team is at the forefront of major regulatory changes affecting the health and social care sector and has extensive experience of advising clients on a wide range of regulatory issues including specialist transactional due diligence.

Recent high profile cases we have been involved in include:

Mid Staffordshire Public Inquiry – which has carried out the most wide-reaching review of the present regulatory structures impacting on the care sector.

Winterbourne View – a Serious Case Review into the failings of multi-agency involvement in the case concerning serious abuses at the service for adults with learning disability.

Due Diligence

We frequently advise and report on a wide range of healthcare regulatory and health commercial aspects that arise when mergers and acquisitions take place, and also when joint ventures and partnerships are entered into, in both the public and independent sectors.

Our due diligence reporting ensures that there is clarity about the nature of, and risks involved in, transactions. When acting for vendors, our reports provide clear information to support the sales process, and if serious issues are identified we can assist clients in how to resolve them. For purchasers we provide clarity as to what is being acquired, the potential risks and their significance, and the steps which can be taken to mitigate.

We understand the need to dovetail on work with the other advisors in the deal - such as providing input on the regulatory aspects of Warranties and Transactional documents. To facilitate a seamless service to the end client we are happy to supply our reports, as ‘bolt-on’ annexes to other advisors’ reports (rather than on a stand-alone basis) if requested.

Regulatory

The powers of the quality regulators, CQC and Ofsted (and their counterparts in Wales and the rest of the UK) are wide and far reaching. Providers are judged in relation to how well they meet required standards, with a particular focus on service user outcomes. Both CQC and Ofsted issue quality ratings. Where there are significant shortfalls, the regulators can utilise regulatory powers, which can include criminal prosecutions and civil enforcement action to suspend or prohibit trading altogether.

We check and report on matters including:

  • whether all the appropriate registrations are in place
  • the extent of compliance with requisite standards
  • Inspection ratings issued by the regulator; and
  • the status and potential outcomes of any enforcement action being taken.

We can also advise on the implications of the Monitor licensing requirements and its impact on Foundation Trusts and independent sector providers of NHS services.
Providers are subject to numerous regulatory requirements beyond those set by CQC, Ofsted and Monitor. Our team can review and report on any issues under a host of regulatory regimes ranging from Health and Safety, pharmacies and medicines management, through to Data Protection and the Vetting and Barring of workers.

We also review and report upon providers’ own processes for quality governance and risk management.

In addition to regulatory sanctions and restrictions on trading, our reporting covers risks in terms of liabilities, relationships and reputation arising from other processes including: complaints, safeguarding investigations, inquests, professional negligence and personal injury claims, employment and commercial disputes, inquiries and reviews, and media coverage.

Health Commercial and Employment

The scope of our reporting can also cover contractual due diligence. This draws on our experience on working on the full range of healthcare contracts including the National Standard Commissioning Contract (and sub-contractor flow-downs), healthcare PFI and ISTC arrangements, AQP contracts and waiting list transfer agreements. We also address medical insurance issues including the availability of CNST cover.

In addition, our employment and pensions team can provide a full employment due diligence support service. This includes employment policies, performance management and employment litigation, the implications of proposed organisational change, and terms and conditions (including Agenda for Change and medical terms, and NHS and other pension arrangements, where relevant).

Previous experience

Significant transactions we have advised upon include:

  • Classic Hospitals – acquisition of 10 independent sector acute hospitals by Spire Healthcare.
  • Craegmoor – advising Advent International on its purchase of the provider of health, social care and specialist education services.
  • Priory – advising Advent International on its acquisition of the UK wide Priory Group of mental health, specialist care and education services.
  • Acorn Care and Education – re-financing of a leading provider of fostering services and schools for children with learning disability.
  • Pathway Care - advice on acquisition of independent fostering agency in England and Wales, by Fostering Solutions.
  • Optimum Care - advice on sale to Four Seasons Health Care.
  • European Care Group - advising bidder on proposed acquisition of care home group.
  • Cygnet Healthcare - advising bidder on proposed acquisition of mental health provider.

We also have extensive experience of handling mergers and acquisitions in the NHS, which are being run on an increasingly commercial basis. Our recent transactions include: the merger between the Royal Free London Hospital and Barnet and Chase Farm Hospitals NHS Trust; and the merger of Great Western Ambulance Service NHS Trust and South Western Ambulance Service NHS Foundation Trust.

Ongoing Support

As well as transactional due diligence reporting, we have extensive experience of providing qualitative reviews and advice upon providers’ policies and processes around regulatory compliance, governance and risk management. Our services can assist clients in resolving issues whether identified during the sale process or on an ongoing basis.

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