Primary care contracts


When the NHS was first established, general practitioners (GPs) usually worked alone and provided their services from small unregulated premises often their own homes. As the NHS grew so regulation was brought in with new contracts which introduced regulation and quality controls. Throughout these changes GPs have maintained their independent status. These means they are self-employed and different to many of our other key providers such as acute hospitals and community health trusts, etc.

Recent past

In the 1990’s the contract that GPs worked to was an ‘items of service’ contract. Whilst they received some flat payments much of their income was activity based. In effect it meant that for everything they did within practice there was a corresponding payment. For instance, if a practice provided a contraceptive to a patient - that generated a payment, similarly if they undertook a night visit – then that generated a payment. For every service it provided the GP practice would submit a payment claim to the relevant authority[1] and a payment was generated. Practices were paid quarterly; this method of payment was often referred to as ‘red book’ payments as all the pricing and regulation was contained within a red coloured booklet.

Personal Medical Services (PMS)

In the late 1990’s general practice was experiencing a recruitment problem. GP practices received a Basic Practice Allowance (BPA) which was a payment made to a practice depending on the number of partners the practice had. When a partner left a practice, not only did the practice lose the BPAs the other partners had to pick up the workload. At this time there was no provision for a practice to take on a salaried doctor the only option was for a partner.

To address this and other shortcomings of the ‘red book, the government offered a pilot contract which they called a Personal Medical Services Contract or a PMS contract. Under a PMS contract the old items of service payment method was removed, instead, practices were offered a fixed price contract. The price was negotiated with the local Primary Care Trusts (PCTs) and was based on the practice’s activity over the previous three years. Practices were paid an agreed monthly amount. The Government wanted to encourage practices to switch to the PMS contract and so there were incentives. If a practice had a high ratio of patients to GPs for instance – they were offered ‘growth money’ which would allow them to employ another doctor – they no longer had to be partners. Also practices could offer additional services which would meet the needs of their particular patient cohort – additional money was included in their contract for these services. Each PMS contract was therefore locally negotiated. Practices who took on a PMS contract were guaranteed that they could keep their contract even if a new national contract was agreed at some point in the future.

General Medical Services Contract (GMS)

In 2004 a new General Medical Services Contract was introduced for all practices other than those who held a PMS contract. The GMS contract was based on the principles used for the PMS Contract in that it was no longer based on activity – but on practice list size. The price of the contract was calculated using the Carhill Formula – which gave a patient weighting (i.e. more money was allocated if the patient was elderly or came from a deprived area, etc). The GMS contract was not as generous as the PMS contracts – and some practices found they were receiving less money under the new contract than they had been under the old. To address this, the government introduced a Minimum Practice Income Guarantee (MPIG). The MPIG represented the difference in amount the practice would have received under their old GMS practice compared to the new. Even with the MPIG there was a view that there was inequity between the PMS and GMS contract.

Prior to the 2004 GMS contract, General Practice had responsibility for their patients 24 hours a day. Under the new GMS contract practices had the opportunity to opt out of providing out of hours care in exchange for a reduction in their contract price. Most practices took up this offer and responsibility for patients’ care out of hours was transferred to a new and separate Out of Hours service.

Alternative Provider Medical Services (APMS)

GMS and PMS contracts can only be held by a GP or group of GPs. An Alternative Provider Medical Services contract (APMS) does not have to be awarded directly to GPs which means that other entities can hold the contract including Private Ltd Companies (PLCs), local GPs and third sector organisations. Another important difference is that the contract is for a fixed period.

NHS England and Clinical Commissioning Groups 2013

In 2013 Clinical Commissioning Groups were established, it was decreed that CCGs should not commission GP services – because of the conflicts of interest issues that this would mean. A key point for CCGs was that they were membership organisations – and the members are GP practices. Responsibility therefore passed to NHS England.

Personal Medical Service – Review

As commissioners, NHS England undertook a review of PMS Contracts – with the aim of reducing the inequalities which existed. Each PMS practice was contacted and asked to evidence the services they were providing to justify the additional funding that they received over and above GMS practices in terms of service provision. Many of the services originally paid for as part of their PMS contract had been re-commissioned as a Locally Commissioned Service[2] (LCS). The review is almost complete and is still being overseen by NHS England. As a result of the review some practices are seeing their contract price reduced by a substantial amount. NHS England have agreed that the reduction will be applied in a staged way over five years – and that monies released will be distributed between practices within that practice’s CCG. All the PMS practices within CWS CCG have opted to return to a GMS contract.

Primary Care Co-commissioning

Primary Care Trusts (PCTs) had large Primary Care teams which would conduct practice contract performance visits, the Quality and Outcomes Framework (QOF) process and contract disputes as well as many other functions relating to GMS contracts. The PCT staff knew their practices and built close bonds with practices. In contrast NHS England South (SE) covered three counties and had a relatively small team to cover all the issues and tasks previously carried out by the PCTs. Since 2013 practices have not received routine visits, and due to the number of practices NHS England could only address urgent issues. Funding for GMS and PMS practices has reduced in real terms, which has had an impact on practice resilience with some practices having to merge or close.

In light of this and other issues, in 2015 CCGs were offered Primary Care Co-commissioning which enabled responsibility for Primary Medical Services Contracts to move from NHS England to Primary Care.

To address the issues around Conflicts of Interest CCGs who had agreed to assume fully delegated responsibilities had to embed a strong committee governance structure to ensure that decisions which impacted on Primary Care were made in an equitable and transparent way. There was a requirement for a Primary Care Commissioning Committee (PCCC) made up of a majority of Lay Members who would have oversight of Primary Care commissioning and who would make commissioning decisions on Primary Care.

CWS CCG recognised the advantages that Primary Care Commissioning could bring to general practice and became fully delegated in April 2016.

Summary of GP Contracts

General Medical Services Contract (GMS)

  • Nationally negotiated.
  • No end date.
  • Flexibility for practices to take on partners or salaried GPs and staff (allows contract to be passed on from one GP (or GPs) to another GP or GPs without need to consult with the commissioner (as long as in line with national General Medical Services Regulations).
  • Contract can only be terminated by the commissioner if there are grounds to do so (i.e. breach of contract or fundamental concerns regarding patients safety).

Personal Medical Services Contract (PMS)

  • Locally negotiated.
  • No end date.
  • Flexibility for practices to take on partners or salaried GPs and staff allows contracts to be passed on from one GP (or GPs) to another GP or GPs without need to consult with the commissioner (as long as it is in line with national General Medical Services Regulations).
  • Contract can only be terminated by the commissioner if there are grounds to do so (i.e. breach of contract or fundamental concerns regarding patients’ safety).
  • There will be very few PMS contracts going forward as Practices opt to return to a GMS contract.

Alternative Provider Medical Services Contract (APMS)

  • Can be held by any entity.
  • Fixed term.
  • Likely that all new contracts for general medical services will be through an APMS contract.
  • Only contract platform that meets the requirements of Procurement Law.

Current challenges to general practice

There are still many issues affecting Primary Care these include:

  • An ageing population and an increasing number of patients with complex care needs and multiple long-term conditions that require more intensive support from GP services.
  • Raised patient expectations – dissatisfaction amongst patients about their ability to access GP appointments.
  • Workforce pressures, recruitment and retention problems.
  • Reduction in GP earnings over the last three years.
  • Low morale.

Implications and consequences

The consequences of these challenges mean:

  • Increased average GP practice list size (up 20% between 2002 and 2014).
  • Vacancies and increased use of locums.
  • Practice mergers.
  • Requests to close Patient lists.
  • Request to close branch surgeries.
  • Requests to terminate contracts.


Through Primary Care Commissioning CWS CCG is able to work more closely with practices to support and monitor service provision at local level. It is hoped that issues and challenges can be identified and discussed with practices before they get to crisis point. The Primary Care Adapt and Thrive Strategy and the General Practice Support Framework are the building blocks to enable this to happen.