NHS Penalty Charge Guidance

NHS Penalty Charge Guidance

Preface The need for the Penalty Charge within the NHS Many people wrongly claim help with health costs, which is costing the NHS millions of pounds each year. We cannot build the modern and efficient NHS the government has promised and we all deserve if millions of pounds in taxpayer s money is being lost to fraud and incorrectness. The primary purpose of penalty charges is to deter patient fraud and incorrectness and to sanction when detected by recovering money for the NHS. The Penalty Charge is one of a series of measures designed to tackle patient evasion of NHS costs. These measures have been introduced as part of the government strategy to tackle all fraud and corruption in the NHS wherever it occurs. 1

Contents 1. Section 1 Introduction pp. 4-5 The purpose of the penalty charge Health costs to which it applies Who administers the scheme? 2. Section 2 Relevant legislation p. 6 3. Section 3 The Penalty Charge explained p. 7 4. Section 4 Helpful definitions p. 8 5. Section 5 122A, 122B, 122C p. 9 Explaining the 1999 amendments to the NHS Health Act 1977 6. Section 6 The verification process p. 10 7. Section 7 Issuing the penalty notice p. 11 Section 122B (7)(b) Representatives and Liability 8. Section 8 Enforcement and recovery of penalty charges pp. 12-13 9. Section 9 Annexes pp. 14-18 Annex A: Illustrative penalty notice Annex B: Help with health costs further information Annex C: Illustrative final letter before action 2

List of abbreviations CTC Child Tax Credit * DPB Dental Practice Board DPTC Disabled Person s Tax Credit * ECHR European Convention on Human Rights NHS National Health Service NHS CFSMS National Health Service Counter Fraud and Security Management Service WTC Working Tax Credit * WFTC Working Families Tax Credit * * From April 2003, WFTC/DPTC will no longer exist and will be replaced by two new tax credits, Working Tax Credit (WTC) and Child Tax Credit (CTC). Further information is to be found at www.inlandrevenue.gov.uk/taxcredits or call 0845 300 3900 or 0845 609 9299 for the PPA s Tax Credit Helpline. 3

Section 1 Introduction The purpose of the Penalty Charge Health costs to which it applies Who administers the scheme? Purpose of penalty charges 1.1 The civil penalty charge provides an appropriate sanction to deter patients from wrongly claiming financial help from the NHS, to which they are not entitled in respect of patient charges or goods and services. NHS health costs 1.2 The term health costs is used throughout this guidance to include: the range of NHS charges payable by patients towards the cost of services such as NHS prescription charges and NHS dental charges, and the cost to the NHS of providing other patient services such as free sight tests and help with the costs of private sight tests, glasses or contact lenses, where entitlement to those services is restricted to certain priority groups. Liability for penalty charge 1.3 Penalties may be imposed on any patient who wrongly claims not to have to pay for the provision of: Drugs and appliances; Dental treatment and appliances; Any other appliances such as wigs and fabric supports; Optical services such as sight tests and glasses or contact lenses; A refund of any health costs. 1.4 Penalties will not be imposed on patients who wrongly obtain help with travel costs, although the costs themselves will be recovered, if possible. 4

Purpose of this guidance 1.5 This guidance ensures that authorities responsible for administering penalties do so in a consistent and equitable manner, in the application of the law and in accordance with statutory provisions. 1.6 It has been developed after extensive consultation with legal advisors and stakeholders and considers the practical aspects of implementing the legislation. Responsible authorities 1.7 Penalty charges are administered by a number of different health service bodies, generally those responsible for the original health cost; they are the responsible authorities. 1.8 The amended Health Act 1977 allows the Secretary of State to direct any health service body to act on behalf of others. In addition, Service Level Agreements may be set up under which one health service body is funded by another to collect penalty charges on its behalf, with any income being returned to the original health service body. 1.9 The responsible authorities administering penalties are: The NHS Counter Fraud and Security Management Service (NHS CFSMS) For patient charges payable for drugs and appliances dispensed by community pharmacists, dispensing doctors and appliance contractors. The Dental Practice Board (DPB) For patient charges payable in respect of dental treatment or appliances within General Dental Services (GDS) and Personal Dental Services (PDS). 5

Section 2 Relevant legislation The Health Act 1999 2.1 The Health Act 1999 inserted additional sections, 122A, 122B and 122C into the National Health Service Act 1977, referred to in this document as The Act. 2.2 Additions 122A and 122B provided the power to introduce the penalty charge by means of regulations. 122C introduced a new specific criminal offence. National Health Service (Penalty Charge) Regulations 1999 2.3 The NHS Penalty Charge Regulations 1999 came into force on 1 November 1999, and are referred to in this document as The Regulations. 2.4 Penalties can only be imposed in respect of unpaid health costs arising on or after the date the regulations came into force. Human Rights Act, 1998 2.5 The Home Secretary signed the Commencement Order, (SI 2000 No. 1851) on July 12 2000. This formally brought the Human Rights Act 1998 into force from 2 October 2000. From that date local authorities and all other public authorities must act compatibly with the European Convention of Human Rights in all that they do. 2.6 The principle point to consider is Article 6 (1): Right to a Fair Trial; In determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law. 2.7 Compatibility with the ECHR was considered when the statutory provision for the Penalty Charge was drafted. As a final recourse a patient has the opportunity to dispute liability for the civil penalty in either the magistrates or the county court. 6

Section 3 The Penalty Charge explained The Penalty Charge 3.1 The penalty charge is a civil fine and may be imposed where a patient fails to pay any amount recoverable from him in respect of any goods or services specified under The Act Section 122B(1). 3.2 The 1999 amendments stipulate that the amount of the penalty charge shall be 5 times the recoverable amount, up to a maximum of 100. This applies to each occasion of dispensing for prescriptions, each course of dental treatment, or for each sight test or optical voucher issued. This is in addition to the original charge. The Surcharge 3.3 In cases of non-payment the amendments provide for a surcharge of up to 50 to be imposed. 3.4 For further information please refer to Section 8. 7

Section 4 Helpful definitions Exemptions 4.1 Patients may claim help with NHS health costs in a number of ways. Where there is a charge for an NHS service, for example NHS prescriptions or dental treatment, some patients do not have to pay. In this guidance, the term exemptions is used to cover all help with health costs unless stated otherwise. This includes exemptions and total or partial remissions and the NHS Low Income Scheme. Categories of eligibility for all types of help with health costs are set out in a series of leaflets issued free of charge by the Department of Health, for supply to the general public and practitioners. Details of how to obtain these leaflets are set out in Annex B at the end of this guide. Claiming help with health costs 4.2 Claiming help with health costs, is the process whereby the patient (or their representative) signs a declaration that they are entitled to free treatment or help with health costs. The declaration is to be found on the prescription form (FP10), the NHS dental treatment form (FP17 or FP17PR), the forms for claiming a free eyesight test, or help with the cost of glasses or contact lenses. (GOS forms). 8

Section 5 122A, 122B, 122C Explaining the 1999 amendments to the NHS Health Act 1977 Section 122A of the Act Recovering the original health charge 5.1 Section 122A of the Act provides for unpaid charges to be recovered as a civil debt where any patient wrongly obtains an exemption. For example, where: (a) (b) a patient claims to hold a certificate (i.e. Pre-Payment Certificate) providing evidence of their entitlement to exemption, when they do not have such a certificate. a patient claims to be entitled to a benefit (i.e. Income Support) to which they are not entitled. Section 122B Imposing a penalty charge 5.2 Section 122B provides for a penalty charge to be imposed in addition to the unpaid charges as in 5.1 above. This section also allows a penalty charge to be imposed where a refund is wrongly obtained. Section 122C Persistent offenders: The Criminal Offence 5.3 Section 122C introduced a new specific criminal offence for trial in the Magistrates Court. The criminal offence is designed to complement the penalty charge by providing a sanction for alleged cases of repeated or persistent evasion. This offence attracts a fine, on conviction, of up to 2,500. 5.4 Section 122C (7) provides that a patient is not liable for a penalty charge if he is convicted of a criminal offence for evasion of the same charges or vice versa to avoid double jeopardy. 5.5 All cases where there is evidence of serious fraud will be considered for criminal proceedings. If following this consideration it is decided not to proceed with any criminal charges, the case will be considered for a penalty charge in the normal way. 9

Section 6 The verification process 6.1 The responsible authorities will have an agreed verification process in place to confirm that the exemption a patient has claimed is correct. 6.2 The verification process will cover a sample of cases across all the categories of exemption, but may also be targeted to maximise the efficiency of checks and the deterrent effect. 6.3 The onus is on the patient to identify the relevant exemption category, as far as possible. The responsible authority will not automatically check every case against each exemption category. 6.4 However the responsible authority will issue a questionnaire to the patient prior to any penalty charge notice. This will give the patient an opportunity to clarify the basis on which exemption has been claimed. It is the patient s responsibility at this point to obtain/provide the responsible authority with evidence to support a claim of exemption. 10

Section 7 Issuing the penalty charge notice Section 122B (7)(b) Representatives and liability Issuing the penalty notice 7.1 Where the verification process outlined in Section 6 fails to confirm entitlement to exemption, a penalty notice should normally be issued to the patient. The following paragraphs clarify such circumstances. 7.2 Where a patient admits liability and pays the original charge before a penalty notice is issued (i.e. after the issue of the questionnaire), they will still be liable for a penalty charge and a penalty notice will be issued. 7.3 The regulations state that the penalty notice should be sent by post to the patient s last known address. It should usually be sufficient to use the normal postal service. Where there is any reason to doubt the security of a particular address, the responsible authority may send a penalty notice by registered post. 7.4 Where it becomes apparent that a penalty notice has not been correctly delivered, a duplicate will be issued as soon as the current address for the patient is established. 7.5 The Regulations present the information that must be included in the penalty notice. An illustration is included at Annex A. Section 122B (7)(b) 7.6 The Act provides that a patient is not liable for a penalty charge if they can show that they did not act wrongfully, or with any lack of care, in respect of the payment in question. 7.7 Ignorance of the law is not sufficient on its own to provide a valid defence. The liability of a representative 7.8 In circumstances where the patient is unable to complete the exemption claim for free health care or partial help with health costs, they may ask a representative (i.e. friend, neighbour) to act on their behalf, by completing the declaration and collecting any medication or appliance. 7.9 It will always be the patient s responsibility for the declaration that their representative makes. Penalty charges will always be sought from the patient where entitlement to exemption is not confirmed. 11

Section 8 Enforcement and recovery of penalty charges Introduction 8.1 Patients will be asked to make full payment of the penalty charge and the outstanding NHS charge within the 28 days specified in the notice. Surcharges 8.2 If the penalty charge has not been paid within 28 days from the date of posting the penalty notice, a surcharge will be payable by the patient. 8.3 The amount of the surcharge will be 50% of the penalty charge, up to a maximum of 50. Payment of charges by instalment 8.4 Where the patient asserts within the 28 days that they are unable to meet the 28-day time limit because of their financial circumstances, the responsible authority may agree with the patient, to accept payment by instalments. 8.5 Patients will be informed that although the surcharge becomes due after 28 days, payment of that surcharge will not be pursued provided that the instalment arrangements are strictly complied with. (The surcharge will be included in the total payable by those patients who enter into such an agreement after 28 days.) 8.6 The responsible authority should seek to recover all outstanding payments within a reasonable time. 8.7 The terms of an instalment agreement will be set out in writing between the responsible authority and the patient. Patients will be told of the consequences of their failure to comply with the instalment agreement. 8.8 Instalment payments will be offset against the components of the debt in the following order: charge payable penalty charge the surcharge any additional costs payable e.g. standard court fees where civil recovery action has been taken. 12

Recovery proceedings 8.9 If a patient does not respond to a request for payment, further enforcement action will normally follow. 8.10 Part payment of a debt will be seen as an inadequate response, (exceptions being an instalment agreement). 8.11 A Final Letter before Action will be issued to the patient prior to court proceedings being commenced. An illustration is included at Annex C. Debt recovery through the courts 8.12 Any outstanding debt may be pursued through the civil courts within 6 years of the date the debt was discovered, or within 6 years of the date a debtor acknowledges in writing his indebtedness or makes a part payment in respect of the debt. 8.13 The Act also allows that the debt may be recovered summarily as a civil debt. This means that the debt can be recovered through the magistrates court within 6 months of the date the charge was incurred, rather than when it is discovered. 13

Section 9: Annexes Annex A Regulation 2 of the National Health Service (Penalty Charge) Regulations 1999 S.I.1999/2794 sets out what information the penalty notice must contain. For reference purposes an illustrative notice is attached which covers all the information which the Regulations stipulate must be included. Illustrative penalty notice Name/address of the Patient In accordance with the NHS Penalty Charge Regulations 1999 (S.I. No 2794), this letter is to advise you that you are required to pay a penalty charge of: in respect of your failure to pay the NHS charge relating to: [DN]: letter to be adapted to suit each service of amount of NHS charge payable on at {date charge payable i.e. service obtained} {address of pharmacy/dental surgery/opticians/other address as appropriate} The penalty charge is in addition to the NHS charge payable as set out above. Amount of NHS charge not paid: Amount of penalty charge: Total Charge payable: The full amount must be paid in full within 28 days after the date this Penalty Notice was sent to you, or you will be liable to an additional surcharge of: 14

Payment of Penalty Charges: You may pay by the following methods: By cheque: Make your cheque payable to: and post to: In person: At (In future it may be possible to pay by other methods such as by credit/debit card by telephone and/or over the internet.) You are not liable for the penalty charge if you can show that you did not act wrongfully or with any lack of care in failing to pay the NHS charge, as detailed above. The maximum penalty charge, is 100. This applies to each occasion of dispensing for prescriptions/each course of dental treatment/ or for each sight test or optical voucher issued. Note: this amount does not include the original NHS charge for the item or service obtained, which must also be repaid. More information about the penalty charge is in leaflet HC81(Pen) Don t just help yourself: The Penalty Charge explained, included with this letter. [For any queries relating to this Penalty Notice please contact:... ] Responsible Authorities may add the following to suit their local needs: 1. A remittance slip, which can serve as a record of payment and include payment details. This may be a tear off slip at the end of the second page, for example. 2. A receipt issued on acceptance of the patients payment s. 15

Annex B: Help with health costs further information Leaflets HC11 HC12 HC81 HC81 (D) HC81 (D-EG) HC81(Op) HC81 (Op-EG) HC81(Pen) HC81 (Pen-EG) Help with health costs Help with health costs: Current NHS charges and optical voucher values How to claim free prescriptions Help with the cost of NHS dental charges how to claim Getting help to pay your dentist An easy guide Help with the cost of optical services how to claim Getting help to pay your optician An easy guide Don t just help yourself: the Penalty Charge explained The Penalty Charge for Patients An Easy Guide Leaflets can be ordered free of charge from: Post: Department of Health PO Box 777 London SE1 6XH Email: doh@prolog.uk.com Fax: 01623 724 524 Leaflets may also be available in a range of other languages (Bengali, Chinese, Greek, Gujarati, Punjabi, Somali, Turkish, Urdu, Vietnamese) audio cassette and braille. 16

Some leaflets are also available on the Internet at: HC 11 HC 12 www.doh.gov.uk/nhscharges/hc11.htm www.doh.gov.uk/nhscharges/hc12.htm Fraud and Corruption Reporting Line on 08702 400 100. From the 23 June 2003, the Help with Health Costs helpline will be at the Prescription Pricing Authority. The number will be 0845 850 1166. For Tax Credit advice call 0845 609 9299. 17

Annex C: Illustrative final letter before action NATIONAL HEALTH SERVICE FINAL LETTER BEFORE ACTION AMOUNT DUE Our records indicate that you have failed to pay the amount required under the penalty notice issued in accordance with The National Health Service (Penalty Charge) Regulations 1999. As advised in our previous letter, you are now liable for payment of the surcharge of in addition to the amount shown on the penalty notice. It is now our intention to instigate recovery proceedings through the county court. In the event of a court judgement being entered against you, additional fees and solicitors costs may be added to your debt and your name will be recorded in the Register of County Court Judgements. It is important that you realise the implications of having a judgement recorded against you as it may affect your ability to obtain credit. In order to avoid legal action, payment in full must be received within the next 7 days. Details of how to pay are shown on the reverse of this notice. Please accept our apologies if you have already replied or paid in full. 18

NHS Counter Fraud and Security Management Service 2003 This document is also available on the Counter Fraud and Security Management Service website at: www.cfsms.nhs.uk Issued March 19 2003