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impact of CMA care home market study on providers

7 December 2017
Last week the Competition & Markets Authority (CMA) published its final report following a year-long review of the elderly care home sector. It is likely that some providers will want to review their current practices in light of the CMA’s key concerns and recommendations. 

The review identifies the gap between funding from local authorities and the actual cost of care as a significant barrier in sustaining the current system in providing care to an aging population whereby the fees from self-funders often effectively cross-subsidise local authority-funded residents. Additionally, the CMA have raised concerns about onerous upfront fees, excessive fees after death and a general lack of transparency of terms & conditions. Further investigations are ongoing into specific providers under consumer protection laws, and the CMA will now consult on proposed new guidance for both fees after death and standards of behaviour required in order to comply with consumer law.

The CMA’s report also calls on regulators to take a greater role in policing some of these issues, and we expect the CQC will heed the call to introduce additional reporting requirements to cover areas such as fee differentials and transparency, although this has not delayed the CMA from taking enforcement action against providers where breaches of the law have been identified.

We expect many care providers will want to take pro-active steps in response to the CMA’s findings. If you would like to discuss the report in more detail, or would like us to review your existing residents’ contracts or payment practices to identify any clauses which could potentially fall foul of consumer law (or may at least be interpreted as such by the CMA / regulators) then please do not hesitate to get in touch.

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The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

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