Monitor will regulate independent providers of NHS-funded services for the first time through the expansion of its provider licence regime.
The health sector regulator, which already licenses NHS foundation trusts, is now accepting applications from the independent sector.
Independent providers deliver about £8.5bn of NHS-funded services, according to a recent estimate by the Institute for Fiscal Studies and the Nuffield Trust.
The licence, which Monitor will use to protect essential services, is the starting point for its regulation of independent providers.
Although the licence will not cover quality of care, which continues to be regulated by the Care Quality Commission, Monitor believes it can be used to make sure that patients continue to receive the essential services they need and that providers are paid a fair price for those services.
Independent providers of NHS-funded services, including charities and hospices, need to check if they need a licence and, if required, hold one from April 1, 2014. The licence requires the provider to be led by fit and proper persons and registered with the Care Quality Commission. From April 2014, independent providers needing a licence and registration with the Care Quality Commission can get both through a joint process.
Commissioners must decide which local services are essential so that Monitor can help secure them for patients if an independent provider gets into financial difficulty.
Jason Dorsett, Director at Monitor, said: “The Southern Cross scandal brought home to people how much uncertainty about the financial future of the organisation had a negative impact on patients and their families.
“Our overriding duty is to protect patients, so we are not going to sit back and wait for financial failures at providers to disrupt essential services, we will actively monitor providers of these services, looking for financial problems and acting quickly to ensure those services continue.”
As part of its licensing regime Monitor will require independent organisations to submit financial information. As part of its preparations, the regulator has launched a consultation on how it should assess financial risk at independent organisations that provide essential NHS-funded services.
Following this consultation, Monitor will publish an update to its Risk Assessment Framework setting out its approach to assessing the financial stability of independent sector providers of essential services.