The Health Care Services (Provider Selection Regime) Regulations 2023 came into force on 1 January and represent a fundamental change to the way that certain healthcare services will be procured by the “relevant authorities” (such as ICBs, NHS England, Trusts and Foundation Trusts). 

In this bulletin, we look at one of the new award mechanisms – the Most Suitable Provider Process.  

Our other PSR guides

For guidance setting out how to decide which PSR award processes are available, please see our PSR flowchart on choosing the right award process here. 

And individual short guides on using Direct Award A, Direct Award B and Direct Award C. 

The criteria for using the Most Suitable Provider Process

Under the Health Care Services (Provider Selection Regime) Regulations 2023 (the “PSR”) relevant authorities may use the Most Suitable Provider Process where:

• The relevant authority is not required to follow Direct Award A or Direct Award B ; and
• The criteria to use Direct Award C does not apply (which is set out in our overview found here); and 
• The relevant authority is of the view, taking into account likely providers and all relevant information available to it at the time, that it is likely to be able to identify the most suitable provider; and 
• The procurement is not to conclude a framework agreement.

It should also be noted that where the above criteria is met, relevant authorities also have discretion to use the Competitive Process for example, to test the market.

Using the Most Suitable Provider Process:

Where a relevant authority is satisfied it can use the Most Suitable Provider Process it must follow the below steps:

• Step 1: the relevant authority must submit a notice of intention to follow this process via the UK e-notification service. The notice of intention must include the following information:
  • a statement that the relevant authority intends to use the Most Suitable Provider Process;
  • the contract title and reference;
  • a description of the relevant health care services to which the contract relates including the most relevant CPV code; and 
  • details of the award decision-makers.
• Step 2: The relevant authority must identify potential providers who may be the most suitable provider, with reference to the key criteria[1] and basic selection criteria. Relevant authorities should be aware that the  statutory guidance issued by NHS England advises relevant authorities to consider undertaking a pre-market engagement exercise to help identify potentially suitable providers. The relevant authority must not take this step until 14 days have lapsed from publishing the notice of intention.
• Step 3: The relevant authority is required to then assess the potential providers identified and chose the most suitable provider to make an award taking into account the key criteria and basic selection criteria.
• Step 4: Before entering into the contract, the relevant authority is to submit a notice of intention to make an award to the chosen provider which includes the information set out at Schedule 6 of the PSR.
• Step 5: The relevant authority must observe a standstill period of eight (8) working days which will begin the day after the notice of intention is published. Following the end of the standstill period, and providing that no written representations are made during the standstill period the relevant authority can enter into the contract.
• Step 6: Following award of the contract, the relevant authority is required to submit a contract award notice on the UK e-notification which contains the information set out in Schedule 7 of the PSR. The contract award notice must be published within 30 days of the contract being awarded.

[1] The key criteria under regulation 5 of the PSR are (a) quality and innovation, (b) value, (c) integration, collaboration and service sustainability, (d) improving access, reducing health inequalities and facilitating choice and (e) social value.

[2] Available at: NHS England » The Provider Selection Regime: statutory guidance

Concluding thoughts

The statutory guidance provides important detail on the use of the Most Suitable Provider Process on the standard of knowledge that a relevant authority is expected to have to be able to make the right commissioning decisions. It states:

“This provider selection process gives relevant authorities a mechanism for reasonable and proportionate decision-making without running a competitive exercise. It is suitable for circumstances where a relevant authority is of the view, taking into account likely providers and all relevant information available to it at the time (see provider landscape), that it is likely to be able to identify the most suitable provider to deliver the health care services to the relevant population (local/regional/national). Relevant authorities are advised to follow this provider selection approach only when they are confident that they can, acting reasonably, clearly identify all likely providers capable of providing the health care services and passing any key criterion or sub-criterion which has been designated as pass/fail.”

In relation to the relevant authority’s requirement to understand the provider landscape, the statutory guidance states that:

“Relevant authorities are expected to develop and maintain sufficiently detailed knowledge of relevant providers, including an understanding of their ability to deliver services to the relevant (local/regional/national) population, varying actual/potential approaches to delivering services, and capabilities, limitations, and connections with other parts of the system. Relevant authorities may wish to consider undertaking pre-market engagement to update or maintain their provider landscape knowledge.

We expect this knowledge to go beyond knowledge of existing providers and to be a general feature of planning and engagement work, developed as part of the commissioning or subcontracting process rather than only at the point of contracting. Without this understanding, relevant authorities may not have enough evidence to confirm the existing provider is performing to the best quality and value, miss opportunities to improve services and identify valuable innovations, and ultimately lead providers to make representations

In practice, this appears to mean that the most suitable provider process may only be available for use when the relevant authority has, and can evidence that they have, this a sufficiently detailed knowledge of the market to allow for this process to be used from an informed position. We expect this to place greater emphasis on pre-market engagement as a means of developing knowledge of the provider landscape. The format and structure of that market engagement will need to be carefully considered as a pre-cursor to the use of this new process.  

If you have any questions relating to this article, please contact Patrick.Parkin@burges-salmon.com or Richard.Binns@burges-salmon.com or another member of our Healthcare team. 

Article written by Lisa Mulholland and Patrick Parkin. 

[1] The key criteria under regulation 5 of the PSR are (a) quality and innovation, (b) value, (c) integration, collaboration and service sustainability, (d) improving access, reducing health inequalities and facilitating choice and (e) social value.