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FTs could have ratings downgrade

8th August 2012

NHS regulator Monitor is considering a move which could see foundation trusts having their risk rating downgraded.

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Under the idea being mooted by Monitor, FTs may in future be downgraded if their private finance initiative payments amount to more than 10% of income.

In addition, there may also be downgrades if there are care failures that could impact on a provider’s financial position.

Monitor has shelved plans to use credit rating agencies to track the financial risk, instead using an adapted version of the “risk assessment framework” it uses to regulate FTs.

But it is required to track the financial risk of all providers of essential NHS services under the current health reforms planned by the government.

FTs will be the first come under scrutiny, followed by private or third sector providers.

Monitor will use the rating framework to decide when it will intervene with a provider with initial details of that emerging in a document last week.

It would rank providers on a 10-point scale: 1-5 would be marked ‘normal’; 6-7 ‘concern’, 8-9 in ‘distress’, and 10 ‘failure’.

Monitor is also considering an “over-ride” facility, allowing for it to respond to “other important factors” or if the provider received a “major concern” warning from the Care Quality Commission over staffing levels, for example.

“Monitor will consider what costs the licensee is likely to incur to rectify this situation and what the likely impact would be on the organisation’s risk rating,” the document stated.

Monitor will consult upon its risk assessment framework later this year.

 

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