Medical finance expert Rob Glentworth offers tips for maintaining practice cashflow and claiming back COVID-19 expenses promptly
GP practices in England have been forced to dip into their own pockets to get themselves ‘COVID-19 ready’, and all with a fairly vague promise of reimbursement from NHS England from the COVID-19 support fund, which will need to be rubber stamped by the Treasury.
Significant expenditure has been incurred by practices, be that from procuring PPE, staffing practices over bank holiday weekends, or upgrading the IT infrastructure of the practice and network.
Although the headlines have been that income is being protected, and reimbursement will be received, timing of receipts means that there is a potentially large effect on practice cashflow. Unfortunately, this is a familiar story for our GP practice clients who are often promised funding streams by the government with the detail to follow later. Golden Hello scheme and PCN DES anyone?
Cash is king
In any business ‘cash is king’. You need cash to purchase materials and pay your staff, which in turn you use to generate your income. General practice is no different. The NHS is catching up in this regard and many GP practices are now beginning to view themselves as the multimillion-pound turnover businesses that they are.
There are GP specific problems that impact upon cashflow, such as a dip in childhood immunisation payments based on targets, private income being paused and some locally commissioned enhanced services not being paid. It is therefore important to have systems in place to manage these issues.
Practical cashflow tips
These are a few basic tips to begin with when looking at cashflow management, but they are simple measures that can be introduced and then used to assist financial management into the future.
We believe dialogue with our GP practices during the year remains key to no nasty financial surprises coming to light at the year end. If you know the cashflow position at any point in time, then you can react and make the necessary business decisions. The solution is usually fairly simple.
An additional consideration is that many practices have seen large swathes of their non-NHS income dry up throughout the first few months of the pandemic, and some practices are heavily reliant on this income. Examples of this could be appraisal work and private travel vaccinations, and this can typically earn a practice between £3 – £5 per registered patient and often a lot more than this. Now is a good time to run some cost versus benefit and profitability analyses on these tasks, so that commercial decisions can be made as to whether it remains viable to carry out this work.
The final thing to say here is that many CCGs have made a payment to practices on a per-patient basis to assist with cashflow in these uncertain times, but that has certainly not been universal.
Claiming costs back from the General Practice Covid Support Fund
We have seen some regional variations in terms of the quantum of accepted claims and the speed at which these have been reimbursed. The Treasury has been very slow to finalise the position on this and there is concern they have still not approved the General Practice Covid Support Fund.
One thing that is clear is that any claim will need to be very carefully and very specifically evidenced. Our recommendation is for a solely COVID-related expense code to be set up within the chart of accounts on your accounting software. If a practice is already using a cloud-based package, then the relevant invoice can often be attached as a PDF to the transaction on the system, which should make claiming from the fund easier.
We feel that there is a lot of scope for genuine staff claims over the last couple of months as management staff in particular had to dedicate a lot of time to ensuring that practices were ready for remote working and able to deal with the challenges.
The main issue surrounding staff reimbursements was that a lot of the guidance cited that this needed to be pre-approved by the CCG, but in reality, NHS England just didn’t leave enough time for this to happen, and as such a sensible evidenced claim should suffice.
This time of crisis can also be a time of opportunity and our medical clients continue to amaze us with the work that they do in battling coronavirus.
Practice finance and management staff, in conjunction with practice accountants, can come out of this strengthened and benefit in the long term from looking after the financial health of the business.
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