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MedCo eyes charging all users as it faces £2m loss

Heskins: Action needed

The continuing decline in number of medical reporting organisations (MROs) signed up to MedCo is set to blow a £2m hole in its finances and could lead to all users being charged, it has emerged.

MedCo is considering “a number of charging options”, including the introduction of an “all users pay” policy, and is seeking their views before making a decision. Law firm users do not pay at the moment.

There are currently 11 tier 1 providers (high-volume national MROs) and 40 smaller tier 2 players, paying registration fees of £150,000 and £20,000 respectively, reduced to £100,000 and £10,000 on renewal due to the surplus MedCo has been running.

At the end of 2017, there were 120 MROs on the system. MRO fees have traditionally made up over 90% of MedCo’s income and the organisation quickly built up a substantial surplus in its early years.

But it is forecasting turnover of just under £1.7m in 2020 – the lowest since it launched in 2015 – and costs of nearly £3.9m, which will eat heavily into £4m of reserves, already depleted by an unaudited £1m shortfall in 2019.

Writing on the MedCo website [1], executive chair Martin Heskins said: “It is clear that the future sustainability of MedCo cannot be guaranteed without taking action to increase forecasted income and reduce expenditure.

“With this in mind MedCo’s board of directors have decided that a new charging policy should be introduced in 2020 in conjunction with a review of the current service levels it provides and associated operating costs.”

Mr Heskins ascribed the fall in numbers to the ban on ‘shell’ agencies, MROs failing their audits and others deciding not to renew registrations “due to market uncertainty”.

He explained that while costs have grown year on year since its launch as operational demands have increased, income has fallen since the 2016 financial year.

MedCo does not employ staff – it contracts out all of its operations to the MIB, which is changing the way it charges for 2020. As a result, MedCo’s costs will increase, as will those of some other third-party suppliers.

Mr Heskins did not mention the potential impact of MedCo’s involvement in the new whiplash portal, due to launch in April.

Users can take a short survey here [2]. The deadline is 13 February.