CQC imposes financial viability test on care providers
From 12 February 2018 the Care Quality Commission (CQC) is imposing a new financial viability test on care providers. Urgent action is required to obtain a statement of financial viability.
The CQC has rushed out new guidance that directly impacts on care providers, including care homes. The regulator wants to impose what it sees as a more consistent and proportionate way of assessing the financial viability of providers.
From 12 February all providers will have to submit a statement of financial viability in the form of a statement letter from a financial specialist. In most cases this will be the care provider's accountant.
The CQC says it wants assurance that care providers are meeting Regulation 13 of the CQC (Registration) Regulations 2009. The new financial viability statement also supports the CQC's proportionate risk-based approach to registration.
Care providers need to have robust financial systems in place, and Bishop Fleming has been working with those in the healthcare sector on better management reporting.
A number of care homes have ceased in business due to their finances no longer being viable, and there has been criticism of both the government and local authorities for not providing enough funding to cover increases in staff costs, particularly due to rises in the National Living Wage, pension auto enrolment and the Apprenticeship Levy.
The government has promised a green paper in the summer on the future of care for the elderly and other vulnerable people, which may look at merging funding for the NHS with that for social care. Until it becomes clear what the government intends to do about the growing financial issues affecting the care sector, some care home providers may continue to struggle with current local authority funding.
If you are a care provider regulated by the CQC, you will need to contact a member of the Bishop Fleming Healthcare team to discuss how to proceed with the new financial viability statement requirement.