Tariff: price reset?

At an HFMA National Payment Systems and Specialised Services committee meeting in September, the NHS Improvement (NHSI) pricing team confirmed that the statutory national tariff consultation is unlikely to be released this calendar year. Mid-January 2019 now appears a more likely time for publication. 

With the move towards integrated care systems, setting a national payment mechanism is a difficult task. On one hand, it needs to deliver stability for those still negotiating what their integrated system looks like. On the other, the more advanced economies need their innovation and long-term ambitions to be unconstrained by payment mechanisms.

However, commissioners and providers cannot avoid planning for 2019/20 and the delay in the statutory consultation is a frustrating one. To address this, NHS Improvement is expected to publish an indicative set of tariffs before Christmas.

Procurement The Department of Health and Social Care is changing the funding mechanism for NHS Supply Chain (now Intelligent Client Co-ordinator). Funding will come from NHS England, with the funds most likely sourced using a top-slice from the tariff quantum. As a result, NHS customers will not face the mark-up in prices currently applied by NHS Supply Chain to cover operating costs. After regional engagement events for chief executives and finance directors in September, feedback will be factored into the proposal in the statutory consultation.

Market forces factor NHS Improvement is considering a refresh of data and methodology used in calculating the market forces factor. They were last refreshed in 2010. If updated, implementation is likely to be phased in over four years. A stand-alone document is expected to be published before the statutory consultation.

Maternity pathway One likely change with the maternity pathway tariff would be to put it on a non-mandatory footing. This is because the provision of screening services – provided as part of the pathway – is a public health responsibility, so the NHS cannot set a tariff for it. This is unlikely to lead to substantive changes in practice. Other aspects are also being reviewed, including:

• Moving the funding of specialist foetal medicine to NHS England specialised commissioning to reduce the administrative burden of provider-to-provider recharges

• Whether to increase maternity delivery phases from two to either six or 36 prices, and then mitigating the impact on home births and midwife-led delivery units

• Updating the factors for post-natal complexities.

A webinar in October will enable the sector to hear proposals, ask questions and offer feedback to NHS Improvement.

Outpatients Two episodic-based options are being considered:

• Mandated prices for consultant-led face-to-face appointments, non-mandated prices for non-consultant led face-to-face, and non-mandated prices for non-face-to-face follow ups (including those that are consultant-led)

• One price for first appointment, and one price for follow-up, irrespective of who or how delivered.

Prices for both options would be set per specialty and vary depending on the involvement of multiple or a single profession. The decision will be based on which option makes sense in all clinical specialties and importantly doesn’t stifle innovation.

The HFMA understands that further engagement on this issue is unlikely although NHS Improvement and NHS England will continue to consider feedback already received at earlier workshops. A decision regarding the preferred option will be based on discussions with the tariff advisory group.

Urgent and emergency care funding (UEC) Two options are being considered in this area including potential changes to the marginal rate emergency tariff (MRET) and how the tariff can further support the provision of ambulatory care.

Payment approach The two national bodies responsible for the tariff are continuing to review whether to stick with episodic-based payment or move to a more blended approach involving some activity payments alongside a block payment and with built-in risk share arrangements. Even if a blended approach were to be adopted, key questions remain over where it might be used – emergency, ambulatory, outpatients or even non-elective? A webinar highlighting current proposals is expected to be announced shortly.

Tariff length This is tied up with the decision on blended payment:

• Remaining with the current payment system may see a return to a one-year tariff, buying time to introduce the blended approach the following year

• If the blended approach is applied in selected settings (such as accident and emergency attendances and ambulatory care), then a two-year tariff may be more likely

• A fully blended approach (also including non-elective and outpatients) could see a two- or even three-year tariff for elective inpatient care.

The HFMA understands that the NHS Improvement pricing team is in support of the Provider Sustainability Fund being included in the tariff quantum. If agreed, this may enable the blended approach to be developed further and introduced in time for 2020/21.

No further engagement is expected as this decision is largely dependent on other factors including the default payment approach and strategic policy in line with the long-term funding settlement.

Andrew Monahan is HFMA policy and research manager