News / NCB set for incentives and sanctions review

04 February 2013

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By Seamus Ward


The NHS Commissioning Board (NCB) is to carry out a ‘fundamental’ review of the incentives, sanctions and rewards available to commissioners to drive improvements in quality of care.

The move raises the possibility of changes to incentives such as CQUIN (commissioning for quality and innovation) and penalties such as those for C.difficile infections.

However, the NCB was unable to clarify which areas would be examined. The review was in its early stages and had yet to set out its terms of reference, it explained.

The review, which will last 12 months and inform the 2014/15 planning round, was unveiled in the NCB planning guidance for 2013/14, Everyone counts: planning for patients. It is separate from the work on pricing, which is being primarily led by Monitor in partnership with the NCB.

HFMA Policy Forum chair Chris Calkin said the review could be important in ensuring commissioners had the right levers to drive change.

'Getting the right payment systems is key,’ he said. ‘Payment systems cannot deliver all the changes we need to see as we transform services to meet current challenges. But they do need to support them. We need providers paid the right amount to cover costs with incentives that support improved pathways and encourage the delivery of high-quality, integrated care.’

The guidance also announced an ‘urgent’ review of the methodology used to calculate allocations made to clinical commissioning groups (CCG). While the NCB believed the formula proposed by the Advisory Committee on Resource Allocation (ACRA) accurately predicted future CCG spending requirements, it was concerned funds would be redistributed to areas that already have the best health outcomes.

The initial conclusions of the review will inform the 2014/15 allocations. In the meantime, CCGs will see a 2.3% across-the-board increase in 2013/14.

The guidance added that the provider efficiency requirement for 2013/14 tariff would be -4%, offset against 2.7% estimated provider cost inflation, giving a net tariff adjustment of -1.3%.

The NHS Trust Development Authority later confirmed in its planning guidance that tariffs would increase by an average of 0.2% in recognition of the underlying costs faced by providers. The overall tariff change is therefore -1.1%.

For more information on the NCB planning guidance, please click here.