New guidance on assessing the financial viability of providers applying for CQC registration
< February 2018

New guidance on assessing the financial viability of providers applying for CQC registration

In their January bulletin, CQC updated you on how they will assess the financial viability of providers applying for registration. This text did not make it clear that this is at the point of registration and only applies to some providers. To clarify, CQC have published the full guidance and the key points to note.

This is new registration guidance; the assessment of the applicants’ financial viability (under Regulation 13 of the CQC (Registration) Regulations 2009) takes place at the point of registration application. CQC have introduced this new streamlined method of assessing compliance with Regulation 13 because providers applying for registration told them that they were not always clear about what they need to provide to demonstrate their compliance with Regulation 13, and that this had led to delays in registration applications.

The new approach will apply to new providers submitting a new registration application. It may also apply to some existing providers seeking to make changes to their registration (for instance for increases in scale or when CQC have intelligence that suggests a provider does not have the financial standing to provide the services set out in their Statement of Purpose). Registered providers in CQC’s Market Oversight Scheme are not required to submit a statement of viability as their financial sustainability is subject to monitoring by our Market Oversight team.

Regulation 13 of the CQC (Registration) Regulations 2009 requires that the provider must take all reasonable steps to meet the financial demands of providing safe and appropriate services and have the financial resources needed to provide and continue to provide the services described in the statement of purpose to the required standards. 

Adult social care providers currently in the Market Oversight Scheme will not be required to provide a letter as CQC's Market Oversight colleagues monitor the financial sustainability of these providers. Evidence of an NHS contract provides sufficient assurance and CQC will not require non NHS organisations with NHS contracts to submit a statement letter.

Existing providers applying to remove or vary a condition, add a location or add a regulated activity are not generally required to submit a statement.

For all other provider applications, CQC have produced a template of the statement letter which will be available on their  website. They recommend that applicants use this template as it clearly explains to the financial specialist what is being requested and why, under the regulations. They recommend applicants allow plenty of time to get their statement completed and returned so it does not delay the application. Applicants don’t have to use the template, but it will help make sure the information required is included. In exceptional cases CQC will consider other third party evidence such as a guarantee from an investor or shareholder. The application cannot be approved until assurance has been received.

Assessing the financial viability of a provider is an important part of the CQC registration assessment. They believe this new approach is more consistent and proportionate. If they have any particular concerns about financial viability they may ask for further evidence during their assessment.

Guidance for providers is available on the registration application pages of the CQC website.

 

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