Dentists beware!

NHS DENTISTRY v. PRIVATE DENTISTRY
A NEW TWIST FOR THE SOLE PRACTITIONER
 
Are you a sole practitioner? Have you ever considered what would happen to your Practice in the event of your death?  Under General Dental Law, as a sole practitioner, on death your estate has 3 years to find a buyer[i].
But what if you have an NHS contract?
 
In those circumstances, your local PCT is obligated to provide continuing service for your patients. Your NHS contract is terminated 7 days after your death, unless the PCT agrees with your Executors to extend that time for 3 months.
 
The PCT can opt to extend this period to 6 months if they know of another contractor who can provide services you would have provided, but for your death[ii].
 
To extend this PCT agreement, the BDA recommends:
 
‘In order to obtain this agreement, the personal representatives have to confirm in writing that they are employing or engaging another dentist or dentists, to provide Units of Dental Activity (UDAs), which would entail employing a locum.
 
This means that during an initial period of shock and grief, the personal representative/s (which is likely to be the dentist’s widow or widower) will have to contact the PCT/LHB to gain their written agreement for continuance of contract.
 
For sole practitioners it is therefore recommended that their personal representatives are aware that they need to contact the PCT /LHB (include contact person and telephone number) within 7 days and that the PCTs/LHBs written agreement needs to be obtained.
 
The PCT/LHB can also agree (but is not obliged to do so) that the contract can be continued for a further period of up to 6 months following the end of the 3 month period. The only reason for such an extension is that the PCT/LHB is of the opinion that another contractor may wish to enter into a contact/agreement to provide the services. This obviously covers a situation where the practice is being sold and the PCT/LHB agrees that it will commission a service from the new owner (which may not necessarily be on the same terms)’.
 
In the event of your death, the continuance of contract process is not at all geared to protect the goodwill value of your Practice, or the interests of your family. Organising a locum to cover your contract is a major responsibility but a short term palliative. Making personal representatives[iii] (widow/widower or grown up children) aware that they need to act quickly under tragic circumstances puts a huge responsibility upon the very persons who need protecting.
To organise a locum, get PCT approval and decide how to proceed with Practice within 3 months is asking a lot of the family during a difficult time.
In order to avoid this situation, there are alternative possibilities available: -
Set up mutual agreements with another trusted local NHS sole practitioner, either on a temporary basis to protect the Practice on death or a binding agreement for the surviving dentist to purchase the deceased Dentist’s Practice (perhaps with each of them entering into a minority partnership in the other’s Practice);
Forming a limited company (a process called incorporation) to hold the NHS Contract during your lifetime – this may not be acceptable to the PCT, the PCT may require conditions to control the shareholding ownership of the Dental Limited Company;
Ensure a non-family member is appointed in your Will to be a Special Executor, to appoint a locum and secure continuity of the Practice; deal with the PCT and to seek sale of Practice on the best possible terms.
The importance of making a valid Will is abundantly clear. By planning for your death, and appointing Executors to ensure the continuance of your Practice you are protecting not only your business, but also your family.
Without a Will, until the Probate Court has granted Letters of Administration to the next of kin, no one has legal authority to make decisions about your Practice. By the time Letters of Administration are granted, it may be too late to protect the family from losing value of the asset – whereby the PCT would allocate your patients around other NHS Practices in the area.
 

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[i] Section 41(4) Dentists Act 1984 states ‘Where a registered dentist…was at his death carrying on a…practice constituting…dentistry, this section shall not operate to prevent his personal representatives or his widow or any of his children, or trustees on behalf of his widow or any of his children, from carrying on the business of dentistry in continuance of that…practice during the three years beginning with his death’
[ii] It is the same whether under GDS or PDS so that clause 173 of the GDS Contract states
173. ‘Where the Contract is with an individual dental practitioner and that practitioner dies, the Contract shall terminate at the end of the period of seven days after the date of his death unless, before the end of that period –
173.1. ‘subject to clause 307, the PCT has agreed in writing with the Contractor’s personal representatives that the Contract should continue or a further period, not exceeding 3 months after the end of the period of seven days; and
173.2. ‘the Contractor’s personal representatives have confirmed in writing to the PCT that they are employing or engaging one or more dental practitioners to assist in the provision of dental services under the Contract throughout the period for which it continues.
174. Where the PCT is of the opinion that another contractor may wish to enter into a contract in respect of the mandatory services which were provided by the deceased dental practitioner, the 3 month period referred to in clause 306.1 may be extended by a period not exceeding 6 months as may be agreed.
[iii] The Executors appointed by Will or the next of kin if there is no Will under the Intestacy Rules.
 
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Click here for an article about GDC complaints procedure (from GDC gazette - winter 09/10)