Serco out-of-hours GP service in Cornwall had 'bullying culture'
The company which provides out-of-hours GP care in Cornwall failed to meet national standards, falsified data and had a "bullying culture".
The parliamentary report by the Public Accounts Committee examined failings by private contractor Serco in 2012.
It also found the out-of-hours service was still "not good enough".
Serco said it had taken "swift and decisive action to put the situation right" and it had a customer satisfaction rating of 95% or higher.
The company has offered to repay £85,000 in performance-related bonuses which were awarded for its work in 2012.
The British Medical Association said the government must ensure the "disgraceful situation" in Cornwall does not happen again.
The select committee report said: "The quality of the service being provided by Serco in Cornwall is not good enough.
"Serco has struggled to ensure enough staff are available to fill all its clinic and car shifts, although it has increased staffing levels in recent months.
"It has consistently failed to meet the national quality requirements relating to the responsiveness of out-of-hours services and performance is still falling short."
In 2012 whistleblowers raised concerns about staffing levels at the out-of-hours service and claimed staff were falsifying data to make the service appear faster.
The report said evidence had proved the whistleblowers' claims were "substantially true".
It said the company appeared to have had a "bullying culture and management style which inhibited whistleblowers from being open in the patients' interest".
Margaret Hodge, the committee chairwoman, said the company had responded to the claims in a "bullying and heavy-handed style" and it was "disgraceful" the public had had to rely on whistleblowers to learn the truth.
The report said Serco searched employees' lockers in an attempt to identify the whistleblowers.
Dr Louis Warren from Serco said: "The report refers to a number of issues that we faced last year.
"When we discovered these problems we took swift and decisive action to put the situation right and apologised to the people of Cornwall.
"The service delivers a high standard against the national quality requirements.
"Patients and users of the service over the past two years consistently give the service a satisfaction rating of 95% or higher."
The select committee report is also critical of Cornwall's former primary care trust, which ceased to exist in April this year.
It said it was "deeply ineffective" in managing Serco's performance.
It said it did not demonstrate it had the "appropriate skills" to negotiate with private service providers or hold them to account for poor performance.
Ms Hodge said: "The failures in this contract matter, because the NHS will be making increasing use of private and voluntary providers to deliver NHS services.
"We must have confidence in the ability of NHS commissioners to contract effectively, to monitor rigorously, and to extract appropriate penalties and where necessary terminate contracts.
"None of these conditions were met in Cornwall."
Andrew Abbott, director of operations for NHS Kernow, the clinical commissioning group which has replaced the primary care trust, said the report had some "useful lessons" for the whole NHS in terms of contracts with private providers.
He said the contract "weakness", which allowed bonuses to be paid to Serco despite poor performance, had been addressed.
"We now have a much more open, constructive, honest but challenging... conversation with [Serco]," he said.
"We can understand what is going on, what is not going on, what is improving and what needs to improve."
The British Medical Association said the situation in Cornwall demonstrated "a complete breakdown" in the system which was supposed to ensure that patient care would not be compromised when NHS services were taken over by a non-NHS provider.
It said: "The government must ensure that this disgraceful situation does not happen again.
"If we do not get a grip on the problems exposed then we run the risk of seeing the failures in Cornwall becoming routine across the NHS."
Serco has provided Cornwall's out-of-hours GP service since 2006.
Its current five-year contract is worth £32m.
According to the select committee report, the two members of staff who were found to be falsifying performance had now left the company.