Legal proposals could affect tariff and FT capital

The proposals – published by NHS England and NHS Improvement – have been developed following an invitation from the prime minister to suggest changes in the law needed to implement the long-term plan. The national NHS organisations, which have announced a single management structure, said the plan could be introduced without additional legislation, but their proposals would make implementation ‘easier and faster’.

The proposals include allowing national prices to be set as a formula rather than a fixed value, so the price payable reflects local factors. While the national tariff already offered significant flexibility to support new ways of delivering care, the national organisations said the change would make it easier to develop new payment models.

The changes would mean national prices were applied only in specific circumstances. For example, national prices for acute care would be allowed for out-of-area treatments, but local commissioners and providers could agree different payment arrangements for services that patients receive from their main local hospital.

Adjustments to the tariff would also be allowed in-year – to reflect new treatments, for example – ending the need to consult on the whole tariff for even a minor proposed change.

Ian Dodge, national director of strategy and innovation, said two ‘highly targeted’ changes to the foundation regime were being proposed, ‘without changing the core FT model or freedoms’.

The first proposal would support mergers and acquisitions where they were clearly in patients’ interests. The second would mean NHS Improvement approving foundation trusts’ annual capital spending in the same way as they currently do for NHS trusts.

This change would ensure that NHS trusts are not disadvantaged compared with foundation trusts, he said. ‘This wasn’t an issue while CDEL looked pretty generous. But given it’s had to be substantially constrained in recent years, it’s become necessary for NHS Improvement to turn down what can be strong proposals from NHS trusts – for, say, A&E capital bids – simply because there is no constraint on annual FT capital spend, bearing in mind there is an overall national limit. This is patently unfair for NHS trusts. I want to emphasise two things – we are not proposing to change the wider existing FT freedoms on capital. And the intention is that we will work closely with stakeholders on getting the detail of both of these provisions right.’

Other changes would remove the requirement for NHS Improvement to refer contested licence conditions or national tariff provisions to the Competition and Market Authority. The CMA’s role in reviewing mergers would end.

NHS Confederation chief executive Niall Dickson (pictured) welcomed the ‘broad thrust’ of the proposals. But he added: ‘We must be alert to the risk of unintended consequences where new powers or requirements may interact with existing statutory or board duties. We will be consulting our members about the potential impact of new powers for NHS Improvement to set foundation trust capital spending limits.’

An engagement period on the proposals ends on 25 April.