News / NHS England proposes suspension of CQUIN clawback

NHS England has confirmed its proposal to pause the nationally mandated CQUIN quality incentive scheme for 2024/25.

The current payment system governing payments to NHS providers was set for two years – covering 2023/24 and 2024/25. However, having trailed a number of proposed amendments for the second year, it has now confirmed the amendments it is proposing to take forward.

The core of the system will remain unchanged with providers paid at 100% of national unit prices for all elective activity delivered – to support providers to make as much progress as possible with elective recovery. The specific amendments are now subject to a 28-day consultation, although there is no consultation on the full payment system guidance nor the prices and low volume activity (LVA) values. 

The proposals for the CQUIN quality incentive scheme represent one of the key changes for 2024/25 and reflect concerns that the bureaucracy involved in the scheme is not justified by the relatively small financial incentives.

Under the CQUIN (commissioning for quality and innovation) scheme, providers receive incentive payments for delivering against relevant nationally set metrics, for example vaccinating staff against the flu, the prompt switching of intravenous antimicrobial treatment to oral administration, or the early identification of frailty in emergency departments.

Providers are funded upfront as though they have fully achieved their CQUIN targets – at 1.25% of fixed contract value for contracts worth £10m or more. But in the current year, some of this payment can be clawed back by commissioners using the variable element of the aligned payment and incentive scheme to reflect any underachievement against the metrics.

The proposal for 2024/25 is to suspend these clawback arrangements.  Providers income associated with CQUIN achievement would no longer be at risk and there would be no obligation to repay any amounts if CQUIN criteria are not fully achieved.

However, CQUIN funding would continue to be included in prices and CQUIN indicators will continue to be published if local systems wanted to use these locally. NHS England is not proposing to collect any CQUIN performance data centrally.

In further changes, NHS England is proposing to add the value of delegated services to low volume activity values, but to continue to use the pre-delegation values to assess LVA eligibility.

The arrangements introduced as part of the 2023/25 system mean that where activity levels between a commissioner and provider are low – with values less than £0.5m – a single payment is made by each commissioner to each provider, rather than the provider raising an invoice for every single procedure or treatment undertaken. The payment is based on the average value of payments over three years.

With some specialised services currently commissioned by NHS England expected to be delegated to integrated care boards, there was concern that this would push some LVA relationships over the £500,000 threshold – increasing transactions and the need for formal contracts. NHS England is proposing to add the value of delegated services to the LVA values to provide a means for paying for this delegated activity. But it will base its assessment of LVA eligibility on the pre-delegation values.