Judgement was reserved at the end of the two day Judicial Review in the London High Courts on 1st and 2nd February, that challenged NHS Commissioners’ decision to allow Centene Corporation’s take-over of dozens of London GP Surgeries, via its UK subsidiaries MH Services International Holdings (UK) and Operose Health Ltd.
The Judicial Review was brought by Anjna Khurana, an NHS patient and Islington councillor. Ms Khurana is one of around 375,000 patients across London who were told nothing about this takeover of their GP surgeries until after the event. After the hearing, Ms Khurana said:
"If an American health care giant buys your GP surgery, most people would think: someone has done proper due diligence, and it would be discussed in the open. The court heard over two days that neither of these things happened - decision makers relied on Google searches, and the news of what happened was buried in a 168 page online agenda. It's up to the judge to say if that's illegal but we all know it's wrong and has to be stopped."
The Claimant asked the court to:
declare that North Central London Clinical Commissioning Group made an unlawful decision to approve the change of control of the AT Medics Ltd GP surgeries to Centene Corporation's UK subsidiaries, Operose Health Ltd and MH Services International Holdings (UK), and to
make an order quashing the Decision.
The Judge, Mrs Justice Hill, indicated that she would publish her judgement on these matters within 4-6 weeks - which the team expected.
The Defendants’ barrister, Fenella Morris QC, told the Judge that the issue of relief (quashing the decision) was something which would severely adversely affect patient care if the decision was quashed - she focused on the contractual dispute which she alleged would ensue.
The Claimant’s barrister, Adam Straw QC, rebutted that proposition.
He emphasized it would be up to the Clinical Commissioning Group to decide what to do regarding the contracts. If the Judge were to quash the Commissioners' decision, this would not necessarily require termination of the contracts. The Clinical Commissioning Group could use its discretion to end the contracts with notice and re-tender during the notice period. He also made the point that even if the judge was not minded to quash, a declaration that the Commissioners' decision was unlawful would still be helpful for other NHS commissioners faced with similar decisions in the future, and that would be an option open to her.
Most of the two-day hearing focused on arguments about evidence relating to the 3 grounds for the Judicial Review - that the NHS Commissioners acted unlawfully in three respects:
? Misdirection – they failed to consider all the implications of the take-over because they assumed they had no choice but to accept and approve the proposal. This error was largely due to the perceived risk of litigation from AT Medics, as the applicants for approval of the change of control of the GP Practices, and the acceptance of NHS England's solicitor's narrow definition of due diligence. By confining themselves in this way, North Central London Clinical Commissioning Group failed to review important factors like the Centene UK subsidiaries' financial dependence on their USA parent company or the suitability of Centene as a provider of NHS services.
? Lack of due diligence – they failed to take reasonable steps to investigate the financial position of the Centene subsidiaries that were to take control of the AT Medics GP Practices, even though the CCG stated that such inquiries were an "essential" part of due diligence because of " the potential financial and service provision risk" from any failures of the companies involved. In the event, bankruptcy was the only financial aspect the CCG reviewed. It failed to give due consideration to the risk to patients, if the GP contracts they agreed to transfer to Operose Health turned out not to meet its parent company Centene’s profitability targets and Centene withdrew
the financial support its subsidiaries depend on.
? Lack of consultation/involvement. Even where no change to patient services is involved, there is a duty to engage patients and public when an issue is of great public importance, as this clearly is, and for the sake of fairness, democratic decision making, and making good decisions.
Mr Straw pointed out that the PCCC itself had recognised there should have been some engagement with the public or its representatives when it invited the 6 Council health leads to a follow up meeting in February and said that in future they would involve them in such decisions.
In effect this was an admission that at least the 6 Council health leads should have been involved, Mr Straw told the Judge.
Fenella Morris QC refuted these points and claimed that engagement was carried out within the Primary Care Commissioning Committee by virtue of the presence of lay members, Healthwatch and Health and Wellbeing Board reps.
But it was pointed out in court that the PCCC decision making meeting excluded the public, that the Health and Wellbeing Board rep was not present, the lay reps had not been asked to represent the views of the public and patients, plus most were not present in Part 2 of the meeting. They had no vote and had not seen the due diligence report or been told about Centene, and that Healthwatch had not facilitated any public involvement in the issue before the Court, nor did it have any vote in the decision.
Key point of contention – due diligence
?In court, some of Fenella Morris QC's arguments appeared confused. On the one hand she said it was unreasonable to expect the Clinical Commissioning Group to carry out more inquiries than they had, because their "task in hand" was contract performance. But at one point she also claimed that NCL Clinical Commissioning Group had considered both operational and financial impacts of the proposed change of control, without explaining what financial risks were considered.
In an apparent attempt to show that due diligence had looked into the financial position of Centene's UK subsidiaries, but that it just wasn't very obvious as "the due diligence is scattered all over the place in the documents", she drew Mrs Justice Hill's attention to her junior's helpful list of what due diligence covered.
On reading the list, Adam Straw QC stood up to say politely to the judge that in fact only three items on the list amounted to Due Diligence: the bankruptcy searches, questions drafted by the NHS Commissioners' solicitors & answers approved by them as satisfactory. Thus confirming what he had already argued: that the due diligence had failed to look into the companies' financial situation.
Ms Morris attempted to gloss over the CCGs failure to identify the Centene subsidiaries' financial dependence on their parent company in the USA as an irrelevance.. She referred to a witness statement by Elizabeth Perry, an Operose Health Ltd director, which asserted that the indebted relationship between Operose and Centene was due to the transfer of working capital from the latter to the former. Ms Morris added, "Of course there are losses, but that's part of long term strategy."
One important factor in the argument was the replacement of the 6 AT Medics Ltd GP Directors by Operose Health Directors, even though the Primary Care Commissioning Group/ Clinical Commissioning Group had been told there would be no operational change to ATMedics Ltd.
The Judge asked Mr Straw to clarify if this change was one that would affect operational services. Mr Straw confirmed that statutory directors have responsibility for a company's strategic management and the failure to disclose the intended change in directors meant the Clinical Commissioning Group were unable to consider the possible impact of this.
Ms Morris asserted that the change of AT Medics LTD GPs from being statutory directors to executive directors would have NO EFFECT on the day to day workings of the GP practices. She said that Centene Corporation was 6 steps removed from AT Medics Ltd in the corporate chain between the two companies, and this remoteness meant the change of AT Medics directors was irrelevant to the operation of the GP practices and there was nothing “dark and suspicious” going on with regard to corporate takeover.
Mr Straw had previously pointed out that three of the four directors of Operose Health Ltd, the company that had taken over the AT Medics GP practices, were Centene Executives based in the USA and this was relevant to any consideration of how "remote" Centene is from AT Medics GP practices.
Key point of contention - Centene’s profiteering in USA
Ms Morris asserted that the Claimant was wrong to say that the Clinical Commissioning Group’s Primary Care Committee had misdirected itself by not considering Centene Corporation’s record of profiteering and overcharging as that was in the USA, under a different regulatory and contractual regime.
She asked the Court to do a "thought experiment" (one of 3 during the day) to show that the change of control did not amount to a “dark” attempt at corporate takeover of the AT Medics Ltd GP Practices. She claimed that the CCG had taken account of wider questions concerning Centene, but this appears to have consisted of a simple Google search carried out by some member of the CCG.
Claimant wrongly accused of breaking Cost Capping Order
Summing up at the Defendants’ case at the end of the second day, Ms Morris QC accused the claimant of breaking the Cost Capping Order, agreed at the permission hearing, which required “the Claimant to notify the Defendants when the fundraising increases in £15,000 increments over and above £60,000”.
So the notification requirement would kick in at any amount over £75,000 raised. The Defendant thought we had breached the Order because the Crowd Justice fundraising page says that £77,707 has been raised. But the amount in fact raised is just shy of £73,000 due to the Crowd Justice fees of ~8%.
Adam Straw QC clarified the situation for the Judge.
Dr Louise Irvine, a South London GP and member of Anjna Khurana's support team, said:
"Anjna's barrister Adam Straw QC raised substantial and important points that were not effectively rebutted by the other side's legal team.He pointed out how important the case is because it doesn't apply only to the 57,000 patients in North Central London, but to the 375,000 patients in AT Medics practices across London as they all made the decision on the same basis. More than that, he explained why the outcome of this case would be important in giving legal guidance for future decisions as they are likely to come up again across the NHS. "