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Plans to change next year’s National Tariff for NHS services face setback

Few objections among CCGs, but providers not happy

Caroline White

Friday, 30 January 2015

Plans to change the rules and pricing structure for NHS services next year are likely to be delayed, the health services regulator Monitor has announced.

Analysis of the responses to the statutory consultation on the proposed rules and prices for the National Tariff for 2015-16 shows that only around one in eight (13%) clinical commissioning groups objected, but support was rather more lukewarm among providers.

Almost four out of 10 providers by number (37%) and three out of four (75%) by share of supply gave the proposed method for determining national prices for NHS services the thumbs down.

The decision to implement a marginal rate for acute-prescribed specialist services in the proposals has prompted concerns that this will shift the cost from NHS England’s budget to local budgets, with a potentially large impact on a number of health systems.

A Monitor spokesperson said: “Under the legislation governing the NHS payment system, the proposals cannot be introduced if the proportion of CCGs, or the proportion of relevant providers (by number or weighted by share of supply), who object to the method equals or exceeds 51%, unless there is a reference to the Competition and Markets Authority.  

“As the share of total tariff income received by the objecting providers exceeds 51%, the National Tariff cannot be introduced in its current form at this stage and its implementation will be delayed.”

The spokesperson added that among the options being discussed with NHS England was further talks with providers to revise the plans and hold a further consultation or referral of the current plans to the Competition and Markets Authority.

“Meanwhile, commissioners and providers will be expected to continue planning for 2015/16 on the basis of the timetable and guidance that has already been issued [just before Christmas],” said the spokesperson.

Since the overall NHS funding totals for 2015/16 are now agreed, any changes to the proposed tariff would in practice just be robbing Peter to pay Paul – meaning less investment in other hospitals, mental health or GP and community services – the exact opposite of what pressures this winter show is now needed,” said Paul Baumann, Chief Financial Officer at NHS England.

He added: “To ensure NHS finances balance during this interim period before a new tariff takes effect, there may need to be equivalent reductions to CQUIN and other supplementary payments. It would mean that, in the meantime, the proposed increases to the emergency marginal rate from 30 per cent to 50 per cent would not take effect.”

Monitor and NHS England would set out further detail on next steps within the fortnight, he said.

Rob Webster, chief executive of the NHS Confederation said that a great deal of time had been spent on the proposals.

“The situation we have ended up with suits no-one,” he complained. "While it is right that a fair solution be reached, the timelines set by Monitor and NHS England means this delay has an unacceptable impact on planning for 2015/16. Furthermore, they must be disappointed that we could reach a point where an external body needs to come in to arbitrate.”

He added that the most important conversations in the NHS were the ones at local level, which were now in jeopardy because not enough had been done to agree prices.

“Time spent on planning nationally has come at the expense of time needed to plan locally and this puts another barrier in front of those local systems trying to work together to coproduce change in tough times,” he said.

“Once we reach an acceptable resolution to this interruption, we need to consider the valuable lessons from how the whole NHS has been engaged on the last two processes for setting tariffs and develop a process that will work on the third time of trying.”

Richard Murray, Director of Policy at health think tank The King’s Fund, described the rejection of the proposed national tariff for next year as "very significant."

He said: "It signals that the policy of implementing year-on-year reductions in the prices paid to hospitals for their services has reached the end of the line.

“It is not clear what the outcome will be but, with just three months to go before the start of the financial year, it will throw financial planning in the NHS into disarray."

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