CMA issue final advice on care homes charging fees

Following a market study into the practice of care homes charging fees after death, the CMA has now released its final advice.

The key points are:

• There are two options for charging fees after death which are likely to be  considered fair contract terms. They are to:

1. charge fees for a fixed period of up to three days after death (starting on the day after the resident’s death) to allow time for relatives to remove possessions. The key message is that any charges should stop if the room is re-occupied by a new resident; or 
2. charge fees until possessions are removed from the resident’s room, provided a reasonable backstop period of no more than ten days (starting on the day after the resident’s death) is included.

• In either case, the CMA has advised that provision should be included in the terms to allow a representative to request an extension of the fixed period or backstop period. If fees are to be charged during any agreed extension, this should be clearly set out.
• Fees paid in advance beyond the short fixed term period or backstop period should be refunded promptly. Any fees not refunded beyond 28 days are likely to cause concern.
• Contract terms that allow a care home to remove possessions from a resident’s room after the fixed or long stop period should clearly set out the charges for doing so, including removal and storage fees. Any charges should reflect the costs reasonably incurred.
•  The disposal or sale of a resident’s possessions (if they remain uncollected) should clearly be provided for in the contract terms. The key messages are:
  • the time frame for disposing of/selling possessions must be made clear;
  • adequate notice to relatives should be given;
  • if items are to be sold, the care home is obliged to obtain a reasonable price; and
  • if any monies are received from the sale, such sums (minus reasonable expenses) should be returned to the resident’s representative.
• If a resident has been “topping up” local authority funding and paying their contribution directly to the care home, the contract entered into with the resident must be on the same terms as the contract entered into with the local authority i.e. top-up payments should not be charged for a longer period that the period a local authority will fund following death of a resident.
• This also applies to contracts entered into with a third party to top up local authority funding. In addition, a third party should not be required to meet any shortfall in local authority funding following the death of the resident.
• Contract terms should not require payments for NHS Funded Nursing Care to continue for a period after the death of a resident i.e. a care home cannot transfer the liability to the representatives once the NHS stops making these payments.

It is important that care homes review their terms and conditions as soon as possible and implement any required changes. The consequences of failing to comply with consumer law include:

• enforcement by the CMA or other sector regulators such as CQC;
• contract terms which are found to be unfair are not enforceable against a resident and any money paid because of that term may be recoverable; and
• the Ombudsmen may consider the CMA’s compliance advice when considering relevant complaints from residents.

Authors:

David Owens - Partner

Trevor Watt - Associate

Anna Davies - Solicitor