Summary: The care provider did not make it clear the fee paid for Mrs X’s care did not include the Funded Nursing Care contribution from the NHS. There was no fault in the charges applied and no injustice caused. However, the care provider’s subsequent fee increases and changes in terms and conditions were given with short notice, did not meet the guidance and prompted Mr A to move Mrs X from the home.

The complaint

1. Mr A (as I shall call him) complains the care provider did not reduce his mother’s (Mrs X’s) fees by the Funded Nursing care award as it said it would in the contract. He also complains about a significant increase in fees which prompted a move to another care home.

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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 injustice, or could have caused injustice, to the person complaining. I have used the term fault to describe this. (Local Government Act 1974, sections 34B and 34C)
3. If an adult social care provider’s actions have caused injustice, we may suggest a remedy. (Local Government Act 1974, section 34H(4))

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How I considered this complaint

4. I considered all the information provided by Mr A and by the care provider. We spoke to Mr A. Both parties had the opportunity to comment on an earlier draft of this statement before I reached a final decision.

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What I found

Relevant law and guidance

5. NHS-Funded Nursing Care (FNC) is the funding provided by the NHS to care homes providing nursing, to support the cost of nursing care delivered by registered nurses. If a person does not qualify for NHS Continuing Healthcare, the need for care from a registered nurse must be determined. If the person has such a need and it is determined their overall needs would be most appropriately met in a care home providing nursing care, then this would lead to eligibility for NHS-Funded Nursing Care.
6. In 2018 the Ombudsman produced guidance for care providers on FNC payments. We said, “Our starting point with FNC complaints is to look at the contract and any standard information given to the resident or their representative before they moved in. We interpret contracts on an ordinary reading. If a contract does not make sense to us, 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.”
7. The Health and Social Care Act 2008 (Regulated Activities) Regulations 2014 set out the fundamental standards that registered care providers must achieve. The Care Quality Commission (CQC) has guidance on how to meet the fundamental standards.
8. Regulation 19 says, “Where a service user will be responsible for paying the costs of their care or treatment (either in full or partially), the registered person must provide a statement to the service user, or to a person acting on the service user’s behalf—

(a) specifying the terms and conditions in respect of the services to be provided to the service user, including as to the amount and method of payment of fees; and

(b) including, where applicable, the form of contract for the provision of services by the service provider.”

9. The Competition and Markets Authority (CMA) has produced guidance for care home to help them comply with their consumer law duties. The CMA says, “terms that give you a wide discretion to make a range of changes, or allow you to do so on short notice, especially if the resident has no say, are likely to be unfair under consumer law, since they could be used to force residents to accept unanticipated costs, new requirements or reduced benefits.” As an example, it cites terms such as “We shall have the right to vary these terms and conditions and/or any of our services or policies from time to time if, in our opinion, it is necessary or appropriate to do so.”
10. The CMA guidance continues, “Terms which give you, in effect, an unlimited right to increase the price of your service after it has been agreed are likely to be unfair under consumer law, especially where the resident has no choice but to pay the higher price or leave……In addition, we consider that general fee reviews should be limited to once a year….Simply stating that your fees may go up as a result of ‘increased costs’, ‘local market conditions’ or ‘the wider national economic picture’, will not make your terms fair.”

What happened

11. Mrs X moved into the care home in July 2021 after suffering a fracture: initially her stay was funded by the local authority. From September 2021 she decided to stay in the home funding her own care. Her contract effective from 17 September describes the weekly fee as £900 and the resident’s contribution as £900. There is no mention in the contract of FNC.FNC was awarded on 18 September 2021. The contract was signed on 3 November 2021.
12. The terms and conditions agreed when Mrs X moved into the home say, “Where the service provider receives a contribution from the NHS in respect of the fees, you will be asked to pay the fees less such contribution.” They also say reviews of fees would be carried out usually twice a year and “residents shall be given at least two months’ notice of increases in fees.” A later clause says the service provider reserves the right to give shorter notice “in appropriate circumstances”.
13. Mr A complained to the care provider when he received notification in December 2021 of a fee increase to £996. The care provider wrote to him in March 2022 agreeing a reduction: they said, “it was agreed that from 01/05/2022 fees would be reduced to £950.00 per week, this is excluding any FNC contributions”.
14. In December 2022 the care provider wrote to Mrs X care of Mr A giving six weeks’ notice that the fees would be increased to £1390.81. The total fee was quoted as £1600 of which £209 was the FNC contribution.
15. There was also a change in the terms and conditions which now read, “The annual increase in the weekly fees will be a minimum of 9% and can be more based on any anticipated increased costs of providing the Services as a result of changes in inflation, increases in the salaries of employees of the Service Provider, National Living Wage increases, pension increases and changes in tax including national insurance and any other costs including capital expenditures for maintaining a viable service as per regulatory standards and financial watchdog.”
16. The terms and conditions also now included a clause allowing the care provider to review the fees at anytime and give 2 weeks’ notice of an increase.
17. Mr A wrote to the care provider in early January 2023 but did not receive a response. He wrote again on 22 January. He said the 46% increase in fees since the previous increase was ‘astronomical’ and unjustified. He asked why the FNC payments had not been used to reduce the fees as the contract said. He asked the care provider to review the intended change in the terms and conditions against the CMA guidance.
18. Mr A moved Mrs X to another care home.
19. The care provider responded at the end of January. They said the “regrettable” increase was due to the difficult economic climate and the increase in the national minimum wage. They said the FNC was a minimal contribution but did not explain that it had been previously used to reduce Mrs X’s fees.
20. Mr A wrote again and asked for repayment of the FNC contributions received by the home. The care provider responded without explaining the FNC.
21. Mr A complained to the Ombudsman.
22. The care provider says the fees have always been reduced by the amount of FNC.
23. In respect of the six weeks’ notice given of the increase in fees, the care provider says the contract gave them the right to give shorter notice “in appropriate circumstances”. They do not explain what the circumstances were here which made it appropriate.
24. The care provider does not address how its actions comply with the CMA guidance but simply repeats the reasons given to Mr A in its response to his complaint.

Analysis

25. There was a lack of clarity in the way the care provider’s failure to explain the way the FNC was applied. That was fault which caused confusion and misunderstanding.
26. The care provider did not comply with the CMA guidance. It announced (at shorter notice than it stated in its terms and conditions) a very significant price increase which essentially compelled Mr A to take the difficult decision to move Mrs X from the home where she had settled. That directly contravened the CMA guidance about the fairness of terms: “Terms which give you, in effect, an unlimited right to increase the price of your service after it has been agreed are likely to be unfair under consumer law, especially where the resident has no choice but to pay the higher price or leave”.
27. The care provider has altered its terms and conditions in such a way that future residents can have little security about likely fee increases. That is unfair.

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Agreed action

28. Within one month of my final decision the care provider agrees to apologise to Mr A for the lack of clarity about the FNC award, and the short notice of the large increase in fees which forced Mr A to move Mrs X from the home;
29. Within one month of my final decision, the care provider agrees to acknowledge the uncertainty and distress caused by its actions by offering the sum of £500 to Mr A;
30. Within three months of my final decision, the care provider will review the alterations in its terms and conditions, consider them in respect of the CMA guidance and let me know the outcome of its review.
31. The Care Provider should provide us with evidence it has complied with the above actions.

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Final decision

32. I have completed this investigation on the basis that the actions of the care provider caused injustice to Mr A and Mrs X. Completion of the recommendations at paragraphs 28 – 30 will remedy that injustice.

Investigator’s decision on behalf of the Ombudsman

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Investigator's decision on behalf of the Ombudsman