Summary: We upheld part of Dr C’s complaint, on behalf of the late Mr and Mrs D, about fees charged by the Care Provider. There was no fault in how the Care Provider charged a moving in fee when Mr and Mrs D became permanent residents in a care home. However, there were faults in how it charged other fees and in its invoicing. This caused uncertainty for Dr C and the Care Provider agreed to apologise.

The complaint

1. Dr C complains, on behalf of her late step-father and mother, Mr and Mrs D, about moving in fees charged by Gracewell Healthcare Limited when they became permanent residents in a care home. She says the provider took the money without explanation. She would like it to refund the fees.

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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 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))
4. We may investigate complaints from a person affected by the matter in the complaint, or from someone the person has authorised in writing to act for him or her. If the person has died or cannot authorise someone to act, we may investigate a complaint from a personal representative or from someone we consider suitable to represent the person affected. (section 26A or 34C, Local Government Act 1974)

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How I considered this complaint

5. I have considered the complaint made by Dr C and the documents she provided.
6. I considered the Care Provider’s comments about the complaint and the documents it provided in response to my enquiries.

7. Dr C and the Care Provider had an opportunity to comment on my draft decision. I considered any comments received before making a final decision.
8. Under our information sharing agreement, I will share this decision with the Care Quality Commission (CQC).

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What I found

Background

Charging for care

9. The Health and Social Care Act 2008 (Regulated Activities) Regulations 2014 set out the fundamental standards those registered to provide care services must achieve. The Care Quality Commission (CQC) has issued guidance on how to meet the fundamental standards below which care must never fall.
10. Regulation 19 sets out care providers’ responsibilities for fees. It says providers must give people information about the terms and conditions of their care, treatment or support, including the expected costs. Where possible they should provide this in writing before the care and support begins.

Competition and Markets Authority investigations

11. The Competition and Markets Authority (CMA) is an independent non-ministerial government department which promotes competition for the benefit of consumers both within and outside the United Kingdom. The CMA’s responsibilities are to ensure that consumers get good deals when buying goods and services, and that businesses operate within the law. The CMA says it does that in several ways including protecting consumers from unfair trading practices.
12. In 2017 the CMA investigated how some care providers charged for their services. That investigation uncovered a fee called a ‘community fee’ charged by one care provider. It said the purpose of the fee was unclear but ran into several thousands of pounds per person. The amount differed depending on which of the care provider’s homes the residents lived in. The investigation found the fee was non-refundable once someone had lived in the care provider’s home for more than 30 days.
13. Following the CMA’s findings in 2018, the care provider gave legally binding commitments to stop charging those fees for future residents. The care provider agreed to compensate residents who had paid the community fee since 1 October 2015, and who remained with the care provider for less than two years. The level of compensation was based on the length of time the resident spent in the home, and the size of the fee paid by the resident.
14. The care provider in that case was owned by the same company that owns Gracewell Healthcare Limited, although they operate as separate care home brands. They are separate legal entities. Gracewell Healthcare Limited was not subject to the investigation and did not make the same commitment. It has decided not to charge the fee going forward but it has not offered to refund past residents.
15. The CMA recently investigated another care home group, Care UK. It asked Care UK to refund people it had charged similar fees. However, Care UK also does not accept it has done anything wrong and has refused to apply refunds. The CMA is taking Care UK to court, so the courts can decide whether consumers have suffered loss because of a breach of consumer law.

Care Provider’s terms and conditions

16. At the time of Mr and Mrs D’s stay, these were in a resident contract which said:
• The Care Provider reserves the right to charge a one-off fee, called the Admission Fee. This was set out in an ‘Admission Schedule’, which was the agreement between the resident and the Care Provider about the type and length of stay and costs involved.
• If residents were provided with additional services, such as newspapers, hairdressing, or private health treatments, these would be itemised on their invoices.
• Invoices for residential care fees and additional services would be sent monthly.

What happened

17. Mr and Mrs D moved into a care home operated by the Care Provider in April 2017 for one month’s respite care.
18. The Care Provider gave Dr C, who took responsibility for Mr and Mrs D’s finances, a bill for the respite which included an ‘additional services fee’ of £150 and a ‘deposit’ of £1,000 each. The daily care fee included a premium charge for respite.
19. Dr C signed an Admission Schedule which set out the weekly cost and duration of Mr and Mrs D’s stay. The schedule said there was no admission fee payable. The Care Provider gave her a copy of its resident contract.
20. At the end of their month-long stay, Mr and Mrs D became permanent residents at the home. Records provided by the Care Provider show Dr C signed a second Admission Schedule although she does not recall doing so. This said an admission fee of £2,500 each was payable. An email between employees at the time said Mr and Mrs D paid a reduced fee because Dr C felt they should have been offered a trial period leading to permanent residence, rather than pay the premium charge for respite. The daily care fees were reduced to reflect the couple were no longer receiving respite care.
21. Dr C began raising concerns about the invoices and charges with the home manager and these discussions continued through to 2020, after Mr and Mrs D died. Dr C was concerned about inconsistent billing and duplicate charges. Later she said the Care Provider had not told her about the admission fee and it had been taken without notice from Mr and Mrs D’s bank account.
22. In February 2020, after meeting with Dr C, the care provider wrote to her to say it would not be refunding the fees. It said it was not part of the voluntary agreement with the CMA and its fee structures and resident services were different.
23. The Care Provider stopped charging admission fees in May 2018. It no longer seeks a deposit or additional services payment from residents receiving respite care.

Analysis

24. The issue of whether upfront fees of the type charged by the Care Provider are unfair under the law is being considered by the courts. It is therefore not appropriate for me to make a finding on the fairness of the fees. However, I can consider if the Care Provider complied with its duties under the fundamental standards about fees.
25. The purpose of the first payment of £1,000 is unclear. In the documents provided it is referred to as a ‘deposit’ and as a ‘moving-in fee’. It was not included in the Admission Schedule. This lack of clarity is fault and caused uncertainty for Dr C about what she was paying for on behalf of Mr and Mrs D. The Care Provider has already remedied this by refunding the payment to Mr and Mrs D. It no longer charges this fee.
26. The purpose of the Care Provider’s ‘additional services fee’ is also unclear. This shows on Mr and Mrs D’s bill for respite as refundable. The Care Provider said the £150 was intended to cover “ancillary services that were likely to be taken” during their stay. It said when Mr and Mrs D became permanent residents, whatever was left from the £150 was used to cover costs they had incurred. However, invoices show Mr and Mrs D were charged for additional services during their respite stay and Dr C arranged to pay for these alongside their care fees. It is therefore unclear what services the Care Provider intended this fee to pay for. This is fault. The Care Provider has already refunded these fees as a goodwill gesture and no longer charges them.
27. I am satisfied the Care Provider told Dr C about its admission fees when Mr and Mrs D became permanent residents. Invoices provided by the Care Provider suggest the fees were paid by bank transfer shortly after Mr and Mrs D became permanently resident and were not paid by Direct Debit. There was no fault in how the Care Provider levied these charges, and it has confirmed it no longer charges residents an admission fee.
28. In response to my enquiries, the Care Provider has given me copies of its invoices for Mr and Mrs D’s care. These show the following faults:
• Incorrect charges for care fees once Mr and Mrs D became permanent residents.
• Charges and refunds without descriptions to explain what they are for.
• Duplicate and delayed charges made for newspapers and private health treatments.
29. Records provided by the Care Provider show it accepted errors with its invoicing and refunded Mr and Mrs D where necessary. But these corrections took time, and the errors in billing undermined Dr C’s confidence in the Care Provider’s ability to keep accurate records. This was fault.
30. The Care Provider says it has since made further changes to its billing systems to simplify them for residents.

Agreed action

31. Within four weeks of the final decision, the Care Provider will apologise to Dr C for the lack of clarity in its charges and uncertainty caused by errors in its billing.

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Final decision

32. I uphold part of this complaint. There was no fault in how the Care Provider charged a moving in fee when Mr and Mrs D became permanent residents. However, there were faults in how the Care Provider charged other fees, and errors in its billing. This caused an injustice to Dr C and the Care Provider has agreed to take action to remedy that injustice.

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Investigator's decision on behalf of the Ombudsman