A body representing ‘tier 2’ medical reporting organisations (MROs) has accused MedCo of “cashing in” on its members after it announced significant hikes in fees.
It follows what Litigation Futures understands has been a culling of the 14 tier 1 MROs – the high-volume, national providers – during the recent auditing programme.
MedCo has set the 2018 fee for tier 1 MROs at £150,000 – double the previous level, which had itself been rebated last year to £57,500 because of the surplus the organisation held.
For tier 2 MROs – smaller, regional businesses – the fee has gone from £15,000 to £20,000. Last year, it was discounted to £11,500.
In a statement, MedCo said: “Whilst MedCo is a not-for-profit organisation, and its usual policy has been to abate fees using surplus funds from previous years, if there is significant risk of financial calls on the surplus this policy cannot be maintained.
“The board concluded that there is a significant ongoing risk of litigation resulting from the audit programme to implement the MoJ qualifying criteria.
“This, combined with uncertainty relating to the proposed personal injury reforms as well as increased operating costs and the review of the expert accreditation scheme has made it necessary to increase fees in April 2018.”
We reported earlier this week on a High Court ruling that threw out judicial reviews brought by two MROs against their suspension from the MedCo portal, which also mentioned in passing a similar action brought by another MRO.
We understand that there have also been cases brought by tier 1 MROs over the loss of their status.
MedCo has hitherto refused to release the number of MROs in each tier, but a spokewoman said they would be published next week.
She would not comment on whether the smaller number of tier 1 MROs was also a factor in the increased fees.
The chairman of the Confederation of Medical Agencies – a body set up a year ago that has 35 tier 2 MROs as members – said he would seek urgent meetings with MedCo and the Ministry of Justice over the fee increases.
Ben Elsom said: “These fee increases cannot be justified at any level. MedCo announced in its annual results in December that it had nearly £5m in surplus cash [it reported a £4.6m surplus for the 2016 financial year].
“To announce that due to the risk of litigation it needs to increase the fees to our members by up to 100% is absurd and incapable of justification.
“Whilst we are aware that some litigation has taken place it should not be the responsibility of our members to foot the legal bill for the mismanagement of MedCo by the current board of directors.”
He said the new fees equated to tier 1 companies having to undertake 833 cases and tier 2 111 cases per annum just to cover the fees.
Mr Elsom also argued that tier 2 MROs pay 66% of the fees MedCo received, even though tier 1 companies receive approximately 70% of all instructions through the portal.
“Our tier 2 members on average receive 1,000 instructions per annum, so effectively will be charged the equivalent of 11% per instruction they receive, whereas, tier 1 providers receive 40,000 instructions per year and will pay the equivalent of 2.08% per instruction.
“This clearly puts our tier 2 regional based members at a competitive disadvantage and should be addressed by the board of MedCo immediately.”
He called for fees to be based on each MRO’s income in the preceding year instead.