Exclusive: MedCo finally reveals MRO numbers as it fights off bid to halt downgrade of tier 1 agency

National providers: Number of tier 1 MROs has fallen

MedCo has for the first time revealed the number of medical reporting organisations (MROs) on its system following the recent annual audit programme.

It came as one of the legal challenges that has beset MedCo of late was published, in which On Medical failed in its bid to halt being downgraded from a tier 1 MROs – that is, a high-volume national provider – to a tier 2.

MedCo told Litigation Futures that, as at 31 December 2017, there were seven tier 1 MROs and 113 tier 2 MROs.

A MedCo spokeswoman said: “Numbers for previous years are not currently publicly available. The MedCo board is reviewing its policy on publishing retrospective data.”

We understand that the tier 1 firms are CL Medical, Doctors Chambers, Mobile Doctors, Premex, Premier Medical, Speed Medical and UK Independent Medical.

The number has shrunk over the past year and is now around the figure industry experts had expected at the time MedCo was set up.

The increase in litigation was one of the reasons cited by MedCo last month for hiking registration fees.

Last month we reported that a High Court judge threw out judicial reviews brought by two MROs against their suspension from the MedCo portal, and we are aware of other cases in which MROs have brought successful actions.

The ruling published yesterday, though handed down in November, saw On Medical seek interim injunctive relief to stop MedCo from downgrading it while it went through the ‘escalation procedure’, that requires MROs to engage in ADR before going to court.

On Medical, an offshoot of Newcastle law firm Winns Solicitors, told the court in Manchester that it acted for around 300 law firms and a number of insurers nationwide. It employed 61 staff, including about 25 dedicated medical legal staff, and has a turnover of about £10m.

It said having tier 2 status would reduce turnover to about £6m and cause an annual £1m loss.

On Medical argued that MedCo had no contractual entitlement to downgrade the claimant and that it did so without any proper notice, without providing any guidance to the claimant, and without any written warning.

It also said that it was unfair, and constituted inconsistent treatment, for MedCo to refuse to provide On Medical with a reasonable opportunity to submit evidence showing substantial compliance with audit recommendations.

In response, MedCo told the court that On Medical was found to have substantially failed to comply with the qualifying criteria applicable to tier 1 MROs and to be in partial non-compliance with the minimum qualifying criteria which all medical reporting organisations are obliged to meet.

His Honour Judge Hodge QC, sitting as a High Court judge, ruled: “Even if there is, as I say, an arguable claim by the claimant for breach of contract, it does not seem to me that the claim is a particularly strong one, or that its prospects of success are particularly high. The fact is that even on the claimant’s own case, there are continuing breaches of the qualifying criteria.”

While acknowledging the “serious financial and reputational consequences” of being downgraded, he said the grant of interim injunctive relief “would cause serious damage to the defendant, and to the system which it was established to promote and administer”.

HHJ Hodge said it had to be right that MedCo has the power to downgrade MROs if they no longer satisfy the tier 1 criteria.

“It does not seem to me that, pending the working through of the escalation procedure, the court ought to be interfering with the defendant’s decision.

“I take into account the presence of the escalation clause and also the impact upon users of the portal if the injunction sought were to be granted on an interim basis.

“I appreciate that, as a result, the claimant will suffer significant financial and reputational damage; but that, it seems to me, is the price that has to be paid by those who seek to be registered as users of the portal.”

The judge ordered On Medical to pay costs of £30,000.

Ian Scanlan, On Medical’s commercial director, told Litigation Futures, that the company and one other firm that was downgraded have elected to undergo a re-audit.

“We already have an audit date and will simply go through the process again. We are confident of re-instatement.

“On Medical were upgraded to tier 1 in August 2016 being the only agency to transition from tier 2 to tier 1. Following the revised qualifying criteria, we were audited again in April 2017. We heard very little from MedCo until 30 October, when we received a call advising a downgrade.”

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