Summary: There was fault in the Home’s calculation of its fees and in its communications about the fees. The Home has agreed to apologise to Mrs C, reimburse the amount that was overpaid and review its admission agreement.

The complaint

1. Mrs C complains on behalf of Miss D, who has passed away. The complaint relates to the Isle Court Nursing Home in Shrewsbury which is run by Morris & Co. Mrs C says the Home changed the way it calculated the charges, particularly in relation to the NHS-funded Nursing Care (FNC) contribution and that its communication about the charges was unclear.

Back to top

The Ombudsman’s role and powers

2. 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)
3. If an adult social care provider’s actions have caused an injustice, we may suggest a remedy. (Local Government Act 1974, section 34H(4))

Back to top

How I considered this complaint

4. I have discussed the complaint with Mrs C’s representative. I have considered the documents that she and the Home have sent, the relevant law and guidance and the comments on the draft decision.

Back to top

What I found

National Framework

5. The 2018 National Framework for NHS Continuing Healthcare and NHS Funded Nursing Care set out the principles relating to the FNC. It said:
• NHS-funded Nursing Care (FNC) is the funding provided by the NHS to care homes with nursing, to support the provision of nursing care by a registered nurse for those assessed as eligible for FNC.
• 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 resident’s 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 3rd 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.
• Contracts between individuals with providers should have terms and conditions which are transparent and fair, including setting out what happens if a resident is admitted to hospital or what happens if a resident dies.

Care Quality Commission

6. The Care Quality Commission (Registration) Regulations 2009 regulation 19 addresses the issue of fees.
7. The intention of regulation 19 was to make sure that providers gave timely and accurate information about the cost of their care and treatment to people who used services.
8. To meet this regulation, providers must make written information available about any fees, contracts and terms and conditions, where people are paying either in full or in part for the cost of their care, treatment and support.

Ombudsman’s guidance

9. The Ombudsman has written guidance about the FNC.
10. The guidance says:
• The starting point with FNC complaints is to look at the contract and any information the resident is given before they move in.
• ‘We interpret contracts on an ordinary reading. If a contract does not make sense to use, then we may view it as a failure by the care provider. We are likely to find fault where a contract term is ambiguous, inconsistent or is poorly drafted. We may also find fault where a contract term contains conflicting terms or is silent on how the care provider treats FNCs. Information from other sources may also be relevant.’

What happened

11. Miss D moved into the Home in January 2014. Her goddaughter, Mrs C, had a lasting power of attorney for Miss D and signed the documents as Miss D lacked the capacity to do so.

The agreement

12. The admission agreement said:
• The fees under this agreement will be £895.00 per week.
• (A) If you qualify at any time for any statutory contribution, such as registered nursing care, continuing health care funding, you or your representative should ensure that the full room fee payable can be paid should any statutory contribution be withdrawn for whatever reason.
• (B) The fees include … provision of care staff on a 24-hour basis to provide personal care as outlined in the care plan (including where appropriate in our opinion, provision of professionally qualified nursing staff to provide nursing care…)
• (C) If you have been awarded the registered nurse care contribution (RNCC) this payment will be made directly to the Home. You will not be charged any additional fees as an individual at this time for the nursing care as the RNCC will cover the cost of your additional needs. Your fees excluding the RNCC will be subject to the usual annual review as stated in this agreement.’
• The fees as defined in the agreement will be reviewed every 6 to 12 months. Between reviews, fees may vary to take into account any notifiable event e.g.: inflation, changes in your care needs and facilities available in the Home, or legal changes.
13. The letter which accompanied the agreement said:
• ‘The weekly fee is £895.00. This includes 24-hour professional nursing, accommodation, laundry and full board.’
14. Miss D was awarded FNC in April 2014.
15. The Home changed its invoices as a result on the FNC change from September 2014. The invoices showed the gross weekly fee (£895.00 as quoted in the agreement), minus the FNC with the balance being the amount Miss D had to pay.
16. For example, the September 2014 invoice said: fee (£895.00) - FNC (£110.89) = £784.11 which was the amount Miss D paid.
17. The Home also repaid the FNC which Miss D had paid between April and September 2014 via a reduced direct debit.
18. In November 2015 the Home sent a letter to Mrs C to say that there would be an uplift to Miss D’s account by £25 in December 2015 and a second £25 uplift in January 2016 because of increases in the minimum wage rate.
19. The December 2015 invoice said:
• Fee (£920) - FNC (£112.00) = £808.00 (amount to pay).
20. The January 2016 invoice said:
• Fee (945.00) - FNC (£112.00) = £833.00 (amount to pay).
21. In April 2016, the NHS increased the FNC to £156.25 but Miss D’s invoices did not reflect the change and still showed FNC as £112.00.

January 2017 letter

22. In January 2017, the Home wrote to Mrs C. The letter was headed ‘FNC’ and related to the NHS’s increase in the FNC.
23. The letter said:
• An analysis of fees charged by the Home revealed there had been a shortfall in cost recovery and the adjustment to the FNC rate was a very helpful step in this direction.
• The Home was committed to being open and transparent in the way in which fees are calculated.
• It used a detailed costing model which reflected the individual’s assessed range of needs.
• The model included the component or registered nurse involvement with the individual, direct clinical treatment (and other items) to which the FNC contributed.
• The Home had reviewed Miss D’s costs for which the FNC was awarded and had assessed this against the current level of FNC. It had calculated that the FNC payment was required to offset the calculated cost and ‘consequently your fees have been adjusted accordingly.’

Review of costs – March 2017

24. The Home carried out a review of Miss D’s costs, broken down into different headings including nursing costs. The total cost was £1,051.64.
25. The Home wrote to Mrs C in March 2017 and said Miss D’s weekly fee had increased to £908.00.
26. The invoice dated March 2017 said:
• Fee (£1,020.00) – FNC (£112.00) = £908.00 (amount to pay).

Mrs C’s complaint

27. Mrs C instructed solicitors in November 2019. The solicitor said:
• The Home always deducted the FNC from the weekly fee and its invoices reflected this.
• The FNC was increased in April 2016 from £112.00 to £156.25 but the invoice showed the Home had only deducted £112.00.
• In March 2017, Mrs C received a letter which said the fees had increased to £908.00 which confused her as this was less than she was paying. However, it became clear, once she received the invoice of March 2017, that there had been a substantial increase to the fees to £1,020.00 and the £908.00 from the letter was the net amount Miss D had to pay.
• The invoices between April 2017 and March 2018 showed the Home applied the FNC rate of £112.00 when the rate had increased to £155.05.
• The invoices continued to show FNC at £112.00 although the FNC increased to £158.16 in April 2018 and £165.56 in April 2019.
• The solicitor said this was not in line with the National Framework.
• The National Framework said contracts should have terms and conditions which were transparent and fair.
• Mrs C had not agreed other contracting agreements and she expected the FNC to be deducted at the correct rate. She therefore asked that the Home refunded the difference.
28. The Home replied in January 2020 and said:
• There had been a change in the Home’s fee structure and this was notified to the residents in early 2017 with an invitation to discuss the specific calculation of the cost of Miss D’s care.
• The cost of Miss D’s care exceeded the fees the Home was charging and this prompted the change in fee structure.
• It had exercised discretion in favour of Miss D as the standard fee at the Home was £1,250.00 per week from April 2017 and was currently £1,450.00. It would investigate this discrepancy.
29. Mrs C’s solicitor wrote to the Home in response and said:
• The Home had not responded to the issues she had raised.
• The letter the Home sent in January 2017 was a general letter and did not provide specific information about the care costs for Miss D nor did it say that the change in the FNC rate would not be passed on to Miss D.
• The admission agreement said residents should be able to pay the full room fee if a statutory contribution (such as FNC) was withdrawn.
• The Home’s initial letter said the fee included ’24 hour professional nursing.’
• The Competition and Markets Authority had provided guidance to care homes on consumer law. This included advice on how to treat FNC payments. The guidance said care homes should clearly set out what the relationship was between FNC payment and a self-funded resident’s own contribution to their fees. This should also explain what would happen if there was a change to the FNC payment.
• The Ombudsman’s guidance said care homes’ contracts would be interpreted on an ordinary reading and, if they made no sense, this would be seen as a failure.
• The Ombudsman had criticised Morris Care in another decision with a similar complaint about a change in the way the Home treated FNC.
• It was reasonable for Mrs C to assume that the full rate of FNC would be deducted from the fee. The Home changed this approach in April 2016 and the Home should therefore refund the fees.
30. The Home replied in March 2020 and said it had nothing further to add to the substance of its previous correspondence. It sent a copy of the costing prepared in March 2017 which showed the actual costs were higher than the fees it had been charging which prompted the increase in fees.

Mrs C’s complaint to the Ombudsman

31. Mrs C’s solicitor went to the Ombudsman. She said the Home’s fault was that it:
• Failed to deduct the correct rate of FNC since April 2016.
• Did not invoice Miss D correctly since March 2017. Mrs C’s solicitor argued that the Home should have included the gross fee (from the invoice) in its fee increase letters, rather than the net fee, which it started doing in March 2017.
32. The Home responded to the Ombudsman’s questions as follows.
33. I asked the Home:
• Why did it not deduct the full rate of FNC from April 2016 onwards? The Home said: ‘the additional £44.25 was retained by our client in order to absorb the increasing cost of clinical care as set out in the individual costed care calculation.’
• The Home also said: ‘It is unrealistic to suggest or expect that if the provider received any increases in the funding from government  that they are going to pass this off to the consumer as it is clear that all providers year on year are managing significant cost increases in supporting nursing residents in care homes in line with the above areas that we have listed above.  It is also worthy of note that as residents age, the support and care they receive increases over time.
• Did the Home agree that it had changed its approach to FNC in March 2017? The Home said the procedure was changed upon the reassessment of the fees and the Home was open and transparent in its dealings with Miss D by notifying her of ‘the need to both increase the fees and retain part of the FNC to offset the increasing clinical costs as set out in the individual costs care calculation for [Miss D].’

Analysis

34. I have considered whether there is any fault in the Home’s actions.
35. The Home had some discretion in how it wanted to address the FNC, but it had a duty to clearly communicate its position when Miss D moved in. It should have clearly set out what its policy was in the admission agreement and in any other communications with Mrs C. If there were no terms in the agreement about the FNC or the agreement was unclear, then we would say there was fault.
36. I have firstly considered the admission agreement.
37. The agreement contained three clauses which related to the cost of the FNC. I have named these clauses A, B and C. My reading of clauses A and B was that the fee charged by the Home included the FNC and therefore the FNC should be deducted from the fee to arrive at the net figure which the resident should pay.
38. However, clause C said the FNC was paid directly to the Home and any fee increases would be calculated without reference to the FNC. This clause appeared to contradict clauses A and B. Therefore, my view was that the agreement was ambiguous and unclear and therefore fault.
39. I have also considered the Home’s other documents apart from the agreement. The initial letter which accompanied the agreement said the fees included nursing costs. The invoices (from September 2016) also showed the total fee minus the FNC and Miss D paid the balance. So, the letter and the invoices both said the gross fee included the FNC which was in line with the admission agreement (apart from clause C).
40. I agree with Mrs C, therefore, that overall, the Home’s documents and communications indicated that its fee included the FNC and therefore that the FNC would be deducted to arrive at the net fee which Miss D had to pay. Mrs C had an expectation that, if the FNC increased, then the higher figure would be deducted.
41. I therefore uphold the complaint that the Home should have started to deduct the higher rate of FNC in 2016. Its failure to do so was fault. The Home did not send any communication or explanation why it stopped deducting the full FNC from April 2016.
42. The Home carried out a review of Miss D’s fee in March 2017, almost a year later, which led to a substantially increased fee. Ultimately the Home has a right to review the fees and set the fees so it would be difficult for the Ombudsman to criticise this, as long as the review was in line with the agreement/contract that the resident signed. I note the Home has provided a breakdown of how it arrived at the increased costs.
43. The Home said its letter dated January 2017 was a notice of the fee increase and its change in practice and it said Miss D had a chance to raise her concerns at this stage.
44. I disagree. The letter talked in general confusing terms about the FNC and an increase in fees. The letter did not include the revised fee figure for Miss D, the calculation of the fee nor the fact that the Home would deduct FNC at £112.00, but not the increased rate.
45. The Home’s intentions became clear when Mrs C received the invoice in March 2017 where she saw the gross fee had increased to £1,020.00 and, after deduction of the (incorrect rate of) FNC of £112.00, the net fee (payment due) had gone up to £908.00.
46. At this stage, the Home seemed to be working with three different figures. The calculation of Miss D’s costs (£1,051.64), the gross fee on the invoice (£1,020.00) and the net fee in its letter (£908.00).
47. My view is that the Home’s communications were muddled. They provided no clarity and confused the issues. They were far from fair and transparent.
48. The Home’s practice until then had been to deduct the FNC from the gross fee. The Home did not have the right to unilaterally decide to deduct only part of the FNC.
49. Also, the Home could not have it both ways. Either it excluded the nursing fees from the calculation of the fees, or it included the nursing fees in the calculation of the fees, but then it had to deduct the FNC. The Home included the nursing costs in its calculation of the fees, but then failed to deduct the full FNC. So in essence Miss D was paying for the nursing fees but so was the NHS.
50. The poor communication and change in practice was fault.
51. I also agree that the Home should have explained that its letters from March 2017 would include the net fee, not the gross fee. That further confused matters as the Home did not explain it had changed its practice in communicating the fees.

Injustice and remedy

52. I have considered the injustice the Home’s actions have caused Miss D and how this injustice can be remedied.
53. The Ombudsman may ask that a complainant is reimbursed for actual, quantifiable loss which has directly resulted from the fault.
54. I note that Mrs C’s solicitor said in her most recent letter that the Home should be asked to refund the difference between the net fees set out in its letters (rather than the gross fees from the invoices) and the FNC.
55. I agree the Home should have explained its change from including the gross fee to the net fee in the letters from March 2017. However, I do not agree that the resulting injustice was that the Home should be held to this lower figure.
56. The Home had carried out a review of the fees and had provided the gross fee figure in the invoices. Mrs C was aware of the gross fee figure from March 2017 onwards and the fact that it had been increased. It is therefore fair to use the gross fee figure. The Home failed to deduct the full FNC from that figure and Miss D suffered a direct financial injustice as a result. Therefore, I recommend the Home should repay that amount to Miss D’s estate.
57. I am also concerned that the Home’s admission agreement did not clearly set out what its position was relating to FNC and I recommend the Home reviews the agreement.

Back to top

Agreed action

58. The Home has agreed to take the following actions within one month of the final decision. It will:
• Apologise in writing to Mrs C for the fault.
• Calculate what the difference is between the fee as stated on the invoices and the FNC rate that was correct at the time and reimburse Miss D’s estate with that amount.
• Review its agreement to ensure its terms relating to FNC are clearer.

Back to top

Final decision

59. I have completed my investigation and have found that the Home’s actions have caused an injustice. The Home has agreed the remedy to address the injustice.

Back to top

Investigator's decision on behalf of the Ombudsman