NHS Treatment for Overseas Patients inquiry

We are not confident that the Department for Health (the Department) is taking effective action to recover more of the costs of treating overseas visitors. Since 1982 the NHS has had a statutory obligation to identify and charge overseas visitors who are not eligible for free care. Yet in 2012–13 the NHS still charged only around 65% of what it could have charged to visitors from outside the the European Economic Area and Switzerland (EEA&S), and 16% of what it could have charged for visitors from the EEA&S. The amounts being charged have increased since then—to £289 million in 2015–16 compared with £89 million in 2012–13. In practice, the amount recovered will be less than the £289 million charged because trusts do not get back all of the amounts that they invoice to patients directly. Most of the gains so far have been from changes in the charging rules, in particular the introduction of the immigration health surcharge which generated £164 million in 2015–16. The Department for Health (the Department) has set a target to recover up to £500 million a year by 2017–18, but in October 2016 forecast that only £346 million would be charged. The Department referred to plans it had for policy and regulatory changes, work to identify and share good practice, and improvements to IT systems, but accepts that there is still a lot more to do to apply the existing regulations more effectively. Recommendation: The Department of Health should publish, by June 2017 at the latest, an action plan setting out specific actions, milestones and performance measures for increasing the amount recovered from overseas visitors. The action plan should name senior individuals in the Department and NHS Improvement whom the Committee can hold to account.

Progress in increasing the amounts recovered, particularly for patients from other EEA&S countries, is hampered because the NHS is not effectively identifying chargeable patients. In 2012–13, the NHS charged an estimated 65% of the amounts it could have charged to overseas visitors from outside the EEA&S, and only 16% of what it could have charged for visitors from the EEA&S. The Department forecast in October 2016 that the NHS would charge £72 million in 2017–18 for patients from within the EEA&S, well below its original ambition to recover £200 million. The UK recovers far less from other EEA&S states than these countries claim from the UK: in 2014–15, the UK recovered only £50 million but paid out £675 million. While some of the difference can be explained by the cost of treating British state pensioners who live abroad, it is clear that hospitals are not identifying all the overseas patients they treat. A person’s chargeable status is primarily determined by whether they are ‘ordinarily resident’ in this country, and can change over time. NHS Improvement argues that it can therefore be extremely difficult, in busy clinical areas, to identify chargeable patients because there is no single document or piece of information, such as a passport or NHS number, that confirms whether or not a person should be charged for NHS treatment. The Department highlights that some trusts, for example in Peterborough, are now requiring patients to prove their identity by showing passports and utility bills. However, these documents do not demonstrate entitlement to free NHS care. The biggest challenge is that there is no single easy way to prove entitlement. In addition, we are conscious that some people who live in this country and are eligible for free healthcare may struggle to provide passports 6 NHS treatment for overseas patients and utility bills and it is important that their access to care is not compromised. The Department should consider a system that would allow verification without compromising patient care. Recommendation: The Department should do more to build on existing systems, such as the NHS number and electronic patient record, to flag to trusts when people are entitled to free care as well as when they are not. This could help tackle both the very low levels of cost recovery for EEA&S patients, and the problem that some people resident in this country may find it hard to show documents that indicate their entitlement. Government should work with other agencies public and private to make clearer in advance of people coming to the UK what health insurance should be taken out and individual liabilities.

The extent of unexplained variation between trusts, both in the amounts they charge and the debts they recover, suggests that some hospital trusts have scope to make substantial improvement. The Department and NHS Improvement recognise that some trusts are charging and recovering much more than others, but cannot explain why this is the case. Just 10 out of the 154 acute and specialist hospital trusts accounted for half of the charges to visitors from outside the EEA&S in 2015–16. Eight trusts did not charge any visitors from outside the EEA&S and 22 trusts did not report any cases under the EHIC scheme. Larger trusts and those in regions with more visitors are likely to charge more, but the variation between trusts is not fully explained by factors such as trust size and location. Debt collection rates also vary significantly, from 15% to 100%, even after excluding outliers (the top and bottom 10% of trusts). Increasing the amount recovered depends on action by hospital trusts, but only 11 of 50 trusts that responded to a consultation thought that their income from overseas patients would increase significantly in future. Recommendation: NHS Improvement should benchmark trusts, identify which are doing well compared with similar trusts, share this information with senior trust executives and boards, and set out what it will do to promote best practice. An additional incentive would be to develop a system that more directly rewards those institutions which most efficiently collect monies owed.

While the statutory responsibility to identify and charge overseas patients lies with trusts, other parts of the health system also have an important role and are not yet doing enough to support cost recovery. The arrangements for recovering the cost of treating overseas visitors involve national oversight bodies, and also healthcare commissioners (NHS England and clinical commissioning groups) that bear the cost when trusts do not identify chargeable patients. These organisations need to support trusts to identify and charge overseas visitors. The Department recently introduced financial incentives, which appear to have helped increase the amounts charged to some extent. NHS Improvement told us it is planning to monitor charging and cost recovery, and intervene when it considers trusts are not fulfilling their statutory obligations. Commissioners have powers to audit trust recovery processes and are not liable to pay for treatment if a trust has not taken reasonable steps to identify chargeable patients and recover charges. It has been reported that more stringent tests of eligibility for maternity care put in place by St George’s Hospital in London were in response to the clinical commissioning group’s NHS treatment for overseas patients 7 refusal to pay for overseas patients that it thought should have been charged directly. This suggests it may be possible to take effective action when there is the will to do so. However, there are no clear, consistently applied, sanctions when trusts do badly. Recommendation: NHS Improvement should collect and share data on the performance of trusts in charging patients and recovering money, and intervene when performance is clearly falling short. At local level, clinical commissioning groups should scrutinise the performance of their local trusts, and use their powers to audit trusts if they are not confident that trusts’ charging processes are robust.

GPs could do more to help the NHS increase the amounts recovered for treating chargeable overseas patients. GPs are not contractually obliged to identify chargeable overseas visitors, but some share relevant information when referring patients for hospital treatment. There is also scope for GPs to report EEA&S patients through the EHIC scheme, which would allow the UK to recover costs from other EEA&S countries and thereby increase income for the health system. The Department is keen to support any GP surgeries that wish to pass on information, but there are no systematic arrangements in place for GPs to do so. Recommendation: NHS England should clarify what it expects of GPs in relation to identifying chargeable overseas patients, and issue guidance by the end of June

In July 2014, the Department launched an overseas visitor and migrant cost recovery programme with the aim of increasing the amount recovered to £500 million a year by 2017–18, by extending the scope of charging and implementing the existing regulations more effectively.10 Increasing income from overseas visitors is one of several measures intended to reduce the financial deficit of trusts, which reached £2.45 billion in 2015–16.11 The Department explained that the £500 million target should not be regarded as overly scientific, and was a top-down calculation based on assumptions about the number of visitors and the amounts charged. This was the best estimate, as the Department did not have bottom-up data about the gap between what was charged and what should have been charged.12 The Department emphasised, however, the underlying principle that the NHS should charge the right amount, which might be higher or lower than £500 million a year. It viewed £500 million as a stretch target to create a culture within the NHS where people did charge the right amount.13

The Department told us that more progress had been made in the last three years than in the previous 30 years, in terms of both improving knowledge and recovering cash.14 Charging increased from £97 million in 2013–14 to £289 million in 2015–16. We note, however, that most of this increase was due to changes in the charging rules. In particular, the new immigration health surcharge generated £164 million from students and temporary migrants in 2015–16. Most temporary migrants from outside the EEA&S pay a surcharge of £200 a year, and students and applicants under the youth mobility scheme pay £150 a year.15 The Department said that the surcharge is a simple, flat-rate charge that was intended to be simple to administer.16

The Department noted that, in setting the level of the surcharge, government had sought to strike a balance between what was fair to the overseas visitors concerned and what was fair to the UK taxpayer, and that some of the people who came to this country to work would also pay taxes. It could not confirm how far the immigration health surcharge covered the full cost of the healthcare provided to students and temporary migrants from outside the EEA&S. The research for the Department in 2013 suggested that the average cost of the treatment accessed by this group of people was £736 per person per year. Not all visitors who pay the surcharge access NHS services, but only very limited data are available to show the services that have been used in practice and how much they cost. The Department told us that it was working with NHS Digital to make improvements to address this information gap where it was financially proportionate to do so.17 9 Q 6 10 C&AG’s Report, paras 8 and 1.12 11 C&AG’s Report, para 1.17 12 Qq 7, 9-10 13 Q 37, 39 14 Q 10 15 C&AG’s Report, paras 1.15 and 2.2 16 Qq 99, 101 17 Qq 98, 105; Department of Health (TOP0010) paras 3 and 4, Annex A; Professor Meirion Thomas (TOP0002) 10 NHS treatment for overseas patients

The Department accepted there was still a lot more to do to apply the existing regulations effectively.18 It forecasts that, were it to take no further action between now and the target date, charging would reach £346 million by 2017–18, short of its ambition to recover up to £500 million.19 It referred us to plans it had for policy and regulatory changes, work to identify and share good practice, and improvements to IT systems, and also said that it would be responding shortly to the consultation on extending the charging regime to other NHS services, such as accident and emergency and some primary care. The Department thought these steps would close the gap between its forecast and its ambition, but could not quantify the likely effect of the different measures.20 It told us that it would continue with the process of trying things and seeing if they worked and, if they did, going further with them and, if not, trying other things..21

The result of the EU referendum creates further uncertainty for the health system. The Department could not explain what impact Brexit might have on the charging regime. We challenged the Department on whether it was worth investing in systems to increase EEA&S charging when the EEA&S health schemes might not apply to the UK in two years’ time. The Department told us that the system changes it was planning were designed to improve identification of overseas visitors, and that it believed they would help the NHS regardless of the outcome of Brexit negotiations.22 Identifying chargeable patients

The biggest shortfall in amounts charged, compared with the ambitions for amounts recovered set out in the Department’s implementation plan, relates to charges for EEA&S visitors. Most of these visitors are covered by schemes such as the European Health Insurance Card (EHIC) and their country of residence pays for their treatment. The Department now forecasts that the NHS will charge £72 million in 2017–18, having aimed for £200 million.23 The Department explained that this issue was purely one of identifying chargeable patients, as distinct from recovering debts. The NHS needed to identify more EEA&S patients and record their EHIC number, and government could then go about reclaiming. The Department said that, in contrast to systems in countries where everyone is charged, the NHS is not set up to check identity and charge people.24

It is striking that the UK paid £674 million to other EEA&S member states in 2014– 15, but recovered only £50 million.25 The Department said that much of the difference related to the cost of treating state pensioners.26 Because of the way the system works, the UK pays for healthcare for UK state pensioners regardless of where in the EEA&S they live. In 2015–16, the UK paid other EEA&S states £565 million, of which £429 million was for the healthcare of UK pensioners abroad. Income for treating EEA&S pensioners in the UK was £13 million in 2015–16, out of total income of £56 million from other EEA&S member states.27 The Department told us that the UK paid for 190,000 UK state 18 Q 10 19 Q 12; C&AG’s Report, para 1.16 20 Qq 35, 125 21 Q 126 22 Qq 129, 130 23 C&AG’s Report, paras 3, 1.16 and Figure 5 24 Q 15 25 C&AG’s Report, para 2.15 26 Q 27 27 Q 54 NHS treatment for overseas patients 11 pensioners living abroad, mainly in Spain, France and Ireland, but there were only 5,500 state pensioners from the EEA&S living in the UK.28 However, it could not explain the difference for other countries—for example in 2014–15, Poland claimed £4.3 million from the UK, and the UK claimed £1.5 million from Poland.29 The Department agreed that the UK is not collecting as much from other EEA&S states as it should. Stripping out money relating to state pensioners, the Department said that this country paid out about £130 million and got back around £40 million, and that it would expect these two numbers to be more balanced.30

NHS Improvement explained that it is extremely difficult, in busy clinical areas, to identify chargeable patients.31 There is no single document or piece of information, such as a passport or NHS number, that confirms whether a person should be charged for NHS treatment. This is because, unlike in other countries, a person’s chargeable status is determined primarily by residency and can change over time.32 The Department highlighted that, working with the Home Office, it had tightened the residency criteria such that people from outside the EEA&S had to have indefinite leave to remain in the UK in order to be classified as ‘ordinarily resident’ and automatically entitled to free care.33

The NHS does not routinely ask people to prove their identity.34 The Department has been working with NHS Digital to make changes to IT systems, including the summary care record application, to help trusts identify whether a patient is likely to be chargeable or entitled to free NHS care.35 It also told us that some trusts, such as Peterborough, were now asking patients for two forms of identification, including one form of photo ID, although it recognised that asking all patients to prove identity was a controversial thing to do.36 St George’s Hospital in London was piloting asking women to bring a passport and proof of address to check their eligibility to free maternity care. The Department said that these initiatives had not yet been evaluated.37 NHS Improvement told us that it needed to identify best practice and then make that best practice available to all.38

There may, however, be some UK residents who, because of their personal circumstances, cannot provide the documents they might be asked for. We heard evidence, including from Doctors of the World, raising concerns about the impact of charges on vulnerable groups, the cost and burden of implementation, and the consequences for public health. NHS Improvement assured us that it was working with cohorts of organisations to determine good process that was proportionate, minimised burden and appropriately discharged organisational responsibility to identify and recover appropriate costs.39 28 Qq 48, 49 29 Qq 29, 30 30 Qq 32, 42 31 Q 66 32 C&AG’s Report, para 3.5 33 Q 111 34 Q 20 35 C&AG’s Report, para 16 36 Qq 19, 25 37 Qq 25, 113 38 Q 68 39 Qq 118, 119; Doctors of the World UK (TOP0003), paras 2 and 3 12 NHS treatment for overseas patients 2 Responsibilities across the health system

Only 11 of 50 trusts responding to a National Audit Office consultation said that they expected income from overseas patients to increase significantly in future. The Department for Health (the Department) said that number needed to go up.40 It acknowledged that there was a long way to go, both to ensure that all trusts dealt with overseas charging with the seriousness it deserved, and that the Department did enough to help trusts get better at tackling the issue.41 In particular, the Department told us that it wanted to foster a culture where everybody who works in the NHS feels responsible not only for patient care, but also for financial rigour.42 Variable performance across trusts

There is significant variation in the amounts that individual trusts charge. Just 10 of the 154 acute and specialist hospital trusts accounted for half of the charges to visitors from outside the EEA&S in 2015–16. Eight trusts did not charge any visitors from outside the EEA&S and 22 trusts did not report any cases under the European Health Insurance Card (EHIC) scheme. Larger trusts and those in regions with more visitors are likely to charge more. However, trust size, type and location can explain only around half the variation in the amounts trusts are charging overseas visitors.43

Once they have charged patients, trusts have varying success in collecting payments. Nationally, trusts collect only around half of the amounts they invoice to overseas visitors directly. However, performance varies significantly from trust to trust, with some collecting just 15% and others collecting 100% of the amounts they charge (even after excluding the top and bottom 10% of trusts).44 The Department suggested that one technique was for trusts to be clear to patients about charging and the likely cost of treatment, and ideally secure payment for non-urgent treatments up front. It described this as an element of best practice that it wanted to see adopted more widely.45 The Department suggested that debt collection was a service that might well be included were groups of trusts to join up their back-office functions. It also highlighted that trusts could link through to the Home Office system and a record of bad debt could be taken into account the next time a person applied for a visa.46 The Department told us that it hoped to see the amounts of bad debt written off go down, but it did not have any projections for what it expected, or wanted, the level of written-off debts to be.47

The Department and NHS Improvement recognised that some trusts were charging and recovering much more than others, but could not explain why this was the case. They told us they were unsure whether trusts that charged and recovered more were actually doing well, or whether they just appeared to be doing well relative to the poorer performance of other trusts. NHS Improvement had, however, identified the cohort of 40 Q 60; C&AG’s Report, para 2.2 41 Q 63 42 Q 33 43 C&AG’s Report, paras 2.16–2.20 44 C&AG’s Report, para 3.33 45 Q 140 46 Qq 141–142 47 Q 140 NHS treatment for overseas patients 13 trusts where there appeared to be the biggest gap between what the demography suggested the trust should be charging and the actual amount charged.48 It said that it needed to benchmark trusts, identify best practice and share this information across the system. It also indicated that it would use the information it gathered to develop helpful improvement tools for trusts to use.49

The Department told us that it had added benchmarking information on cost recovery for overseas visitors to the ‘model hospital’ data it made available to trust governing boards. In future it therefore ought to be much more explicit to the boards of trusts when trusts were out of line with where they should be. It would also give those charged with oversight and intervention the opportunity to inquire and ask questions and allow more targeted follow-up.50 The wider health system

The Department has introduced financial incentives to encourage trusts to improve their processes and increase charging. There are two incentives: one for the EHIC scheme, and one for visitors from outside the EEA&S. The Department argued that the EHIC incentive, introduced in October 2014, has had a positive effect, with trusts reporting more treatments. The rise in reporting had not led to an increase in charging, but the Department told us that it expected charging would go up.51 The non-EEA&S incentive, introduced in April 2015, allows trusts to charge patients 150% of the normal NHS tariff price. The amount charged has increased much in line with the change in prices, but there is no evidence that trusts are identifying more chargeable patients from outside the EEA&S.52

Healthcare commissioners (NHS England and local clinical commissioning groups) bear the cost when trusts do not identify chargeable overseas patients, and have powers to audit trusts to ensure they have appropriate policies and procedures in place. The NHS standard contract makes clear that clinical commissioning groups should not have to pay for treatment provided to chargeable overseas visitors if a trust does not make reasonable efforts to recover the costs.53 It is the responsibility of commissioners to challenge hospital trusts to show they are identifying and charging all the overseas patients they should.54

It has been reported that the more stringent tests of eligibility for maternity care put in place by St George’s Hospital in London were prompted by the local clinical commissioning group’s refusal to pay for overseas patients that it thought should have been charged directly. The Department described this as commissioners doing exactly what they were supposed to do.55 NHS Clinical Commissioners told us that clinical commissioning groups recognised their role, and suggested that targeted data and training for commissioners would go a long way in helping the health system to achieve the aims of the cost recovery programme.56 48 Qq 24, 26 49 Q 116 50 Q 116 51 Qq 21, 47; Department of Health (TOP0010), Annex A 52 C&AG’s Report, para 3.32 and Figure 6 53 NHS Clinical Commissioners (TOP0007) para 3.3 54 Q 122; NHS England (TOP0005) 55 Q 113 56 NHS Clinical Commissioners (TOP0007) paras 5.1, 5.3 14 NHS treatment for overseas patients

NHS Improvement, as the regulator of trusts, has the potential to influence trusts’ behaviour. It told us that it needed to ensure that appropriate processes were in place throughout the acute sector. Building on its work to collect data and benchmark trusts, it planned to intervene where it thought organisations were not fulfilling their obligations and needed support to do so. It agreed that there also ought to be clear, consistently applied, sanctions when trusts that needed to improve did not do so.57 The role of GPs

The Department explained that GPs were not contractually obliged to do anything to identify overseas visitors.58 Its charging guidance does recommend that GPs should note in the referral letters they send to hospitals if they know that a patient is an overseas visitor, holds an EHIC or might be directly chargeable.59 We note that, in practice, some GPs do provide hospitals with information to indicate that patients might be chargeable, but the capability for systematic data sharing is not built into NHS IT systems.60

At our evidence session, the Department was unsure about the arrangements for reclaiming the costs of primary care, such as GP appointments, from other EEA&S states. It subsequently confirmed the legal basis for charging for primary care under the EHIC scheme. The cost of all ‘needs arising’ treatment carried out, subject to valid documentation being presented, can be reclaimed. This includes services currently exempt from charges under domestic legislation, such as GP care and also accident and emergency services. Were GPs to identify EEA&S visitors, the UK would be able to recover the costs of treatment from other EEA&S member states, increasing income for the health system. The Department told us that it did not collect information on whether GPs were identifying EEA&S patients and that, while it was keen to support any GP surgeries that wished to pass on relevant information, it was not able to mandate any systematic reporting.61 57 Qq 116, 123–124 58 Q 148 59 Department of Health (TOP0010), para 6 60 C&AG’s Report, paras 3.10 and 3.21 61 Qq 148–150; Department of Health (TOP0010), para 5, para 6 NHS treatment for overseas patients 15