Monitor to gain competition law powers from 1 April

08 February 2013

Richard Eccles

Monitor, the NHS regulator, is to have powers to apply competition law to healthcare service providers from 1 April 2013.

The competition law provisions of the Health and Social Care Act 2012 have been brought into force as from that date under a recently published Commencement Order, giving concurrent powers under the Competition Act 1998 to Monitor as the NHS regulator alongside the OFT, thus enabling Monitor to apply competition law to agreements and concerted practices between undertakings, and abuses of dominant position, with regard to the provision of healthcare services in England. The Act does not specify whether foundation trusts or other NHS trusts are to be regarded as “undertakings” for purposes of the Competition Act, but leaves open the possibility. 

Monitor will also now have concurrent powers with the OFT in respect of market investigations under the Enterprise Act 2002, as from 1 April. This enables Monitor as well as the OFT to make a reference to the Competition Commission for a market investigation, if it has reasonable grounds for suspecting that any feature, or combination of features, of a healthcare services market in England prevents, restricts or distorts competition. 

The application of the  merger control rules of the Enterprise Act 2002 to mergers involving a foundation trust is already in force under the 2012 Act, and is already being implemented by the OFT, most notably in the referral to the Competition Commission last month of the proposed merger between Poole Hospital and Royal Bournemouth and Christchurch Hospitals Foundation Trusts for full investigation. 

Monitor already has the general duties under the 2012 Act of promoting the provision of economic, efficient and effective healthcare services, having regard to likely future demand. Monitor is expressly required to exercise its functions with a view to preventing anti-competitive behaviour in the provision of healthcare services for NHS services. The 2012 Act will require all providers of NHS healthcare services to hold a licence to be granted by Monitor. The relevant provisions have so far been partially implemented, to the extent necessary to enable Monitor to prepare and consult on draft standard conditions. The latest Commencement Order also brings into force (as from 1 April) provisions on consultation on proposals for the national tariff to be introduced under the Act. Monitor will be required to publish national tariffs specifying the prices to be paid for the provision of certain NHS healthcare services.

These changes mark a significant step in the strengthening of competition law and regulatory controls over health service providers and especially NHS foundation trusts. The introduction of competition rules into the NHS involves the application of complex legal requirements and principles. 

Additional healthcare contacts:

David Ayers
Dominic Cook
Simon Shooter

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