NHS Provider Selection Regime: Panel decision considers when a service is a “healthcare service”

On 19 March 2025, the Independent Patient Choice and Procurement Panel (“IPCPP”) published a review of a proposed contract award by Leicester, Leicestershire and Rutland Integrated Care Board (the “ICB”) for its Adult and Paediatric Orthotics and Wheelchair Service in Leicester, Leicestershire and Rutland. This is the sixth report published by the IPCPP since it was formed at the start of 2024. 

This update will be of interest to:

• “Relevant authorities” (such as ICBs, NHS England, Trusts and Foundation Trusts) considering the use of Direct Award A, B or C process to procure healthcare services, or
• Any provider of healthcare services to the NHS. 

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. 

We have also put together short guides on using the procedures: Direct Award A, Direct Award B and Direct Award C. 

Facts

AJM Healthcare (“AJM”) asked the IPCPP to advise on the ICB’s selection of Opcare Limited (“Opcare”) for its £31.5m contract to provide an Orthotics and Wheelchair Service. 

Opcare is the existing provider of the Orthotics and Wheelchair Service. The orthotics element of the service includes diagnosis, treatment and fitting of orthoses, and repair and maintenance. The wheelchair element of the service includes assessment of patient needs, provision of wheelchairs and associated specialist seating, and repair and maintenance.

The ICB used the mixed procurement provisions of the PSR regulations as it concluded that whilst the orthotics element of the service was a relevant healthcare service, there was uncertainty as to whether the wheelchair service was a relevant healthcare service. The ICB therefore applied the mixed procurement provisions of the PSR and awarded the new contract to its existing provider, Opcare, under the PSR Regulations using Direct Award Process C, which allows the award of a contract to an existing provider who is “satisfying the existing contract and will likely satisfy the proposed contract to a sufficient standard”.

Key Issues

Did the NHS Provider Selection Regime apply in this case?

Under the PSR regulations, contracts for mixed procurements can be awarded under the Provider Selection Regime only if they meet certain conditions. Specifically, the PSR will only apply if the the majority of the service (measured by £ value) is a relevant healthcare service.

It is not uncommon for a service specification to contain a variety of elements, some of which will involve healthcare services delivered directly to a patient and others that are not (and which therefore fall outside the scope of the PSR). 

In its representations to the IPCPP, AJM argued that 53.4% of the estimated value of the contract was on the wheelchair service which it argued was “not in-scope, as the majority of spending relates to medical equipment”. As such, in AJM’s view, the ICB applied the PSR regulations and should have instead selected a provider under the Public Contracts Regulations 2015.

In this case, it was necessary to consider whether the wheelchair service was a relevant healthcare service. If the wheelchair service was a “healthcare service” then the PSR would apply, but if it was not, the majority of the spend would be on our-of-scope services and the Public Contracts Regulations 2015 should have been used. The likely result, had the PCR applied, would be a competitive procurement that AJM could have taken part in. 

Definition of relevant health care services in the PSR regulations

The PSR regulations apply “where a relevant authority procures relevant health care services for the purposes of the health service in England, whether alone or as part of a mixed procurement” (Regulation 3).

The PSR statutory guidance says “health care services subject to this regime only includes those services that provide health care (whether treatment, diagnosis or prevention of physical or mental health conditions) to individuals (i.e. patients or service users) or groups of individuals (e.g. where treatment is delivered to a group such as in the form of group therapy).” 

Crucially, the IPCPP found that the wheelchair service is a relevant healthcare service for the purposes of the PSR regulations. This conclusion largely turned on the service specification, pathways for patients accessing the service, and clinician involvement in delivering the service, which all supported the conclusion that the wheelchair service is a healthcare service. 

The IPCPP found that the ICB’s service specification included both diagnostic (patient assessment) and treatment elements (the supply of a bespoke wheelchair that enables patient mobility) as per the definition of a healthcare service. The ICB provided data to show that the services are provided by a combination of clinical and technical staff and the vast majority of referrals are from GPs, occupational therapists, physiotherapists and allied healthcare professionals. 

These three factors, namely the service specification, pathways for patients accessing the service, and clinician involvement in delivering the service, all supported a conclusion that the wheelchair service is a healthcare service. 

The IPCPP also found that the lack of CQC registration or the balance of expenditure on clinical services are not grounds for finding that the wheelchair service is not a healthcare service.

Ultimately, the Orthotics and Wheelchair Service was regarded as only encompassing relevant healthcare services, so the PSR applied. This meant that the ICB was entitled to continue with the proposed direct contract award as it had originally intended and award the contract to its existing provider, Opcare. 

What practical guidance does this case provide?

This panel decision provides several guidance points for the procurement of healthcare services:

• CQC registration is not a “must have” for a service to be a “healthcare service” within the scope of the PSR: The existence of a CQC registration for the service that the provider is delivering will almost certainly indicate that a service is “in-scope” for the purposes of the PSR. However, the absence of a CQC registration does not provide conclusive evidence that the service is out of scope. In this case, the fact that the wheelchair service involved clinicians and had a patient pathway that demonstrated that the healthcare service was delivered directly was enough to satisfy the test. 
• Nor is it essential for there to be a CPV code for a service to be within the scope of the PSR: The PSR also lists a series of common procurement vocabulary codes (or CPV codes) which Commissioners should assign to a particular procurement with the greatest level of precision that they can. This list does not include “wheelchair services” within the 67 CPV codes. However, the panel reiterated the statutory guidance which identifies that there may not always be specific CPV codes in the PSR for the specific healthcare services in question. In this case, the only CPV codes for wheelchair services are actually services covered by the PCR, but the panel found that these services were different from those being procured by the ICB. 
• If there is uncertainty about whether a service is within the scope of the PSR, then the panel will (and Commissioners should) take a holistic view of the service, by reference to the specification: Commissioners should be aware of the need to take care when determining the procurement rules that apply and consider if the use of the PSR is appropriate. As this case shows, the assessment will be fact-specific. The panel reviewed the specific characteristics of the service in question in determining that the service was within the scope of the PSR.  

If you would like to discuss any of the above please contact a member of our Healthcare team.

Article written by Alex Bones and Patrick Parkin.