News / NHS England and Monitor issue tariff statement

NHS England and Monitor have reminded clinical commissioning groups that they can agree local prices for services where there is no national price. The announcement comes in the wake of concerns about different cost assumptions used in setting nominal price adjustments for acute and for non-acute services.

The 2014/15 national tariff payment system, published in December, set a nominal price adjustment for acute services of -1.5%, based on cost uplifts of 2.5% and an efficiency requirement of 4%. However the adjustment for non-acute services – including community and mental health services – was set at -1.8%.

The tariff document explained that this ‘larger nominal reduction’ for non-acute services reflected that some the costs for service development included in the cost assumptions – those relating to the Francis and Keogh reports – applied only to acute services.

However mental health and community trusts said the approach discriminated against them. And the Foundation Trust Network, the NHS Confederation and Mental Health Network met with NHS England and Monitor to argue that all trusts face significant costs in implementing the recommendations of the Francis report.

In a statement to Healthcare Finance, NHS England and Monitor said December’s tariff document ‘sets out the responsibility of providers and commissioners to agree the prices paid locally for mental health services’. ‘NHS England remains committed to the delivery of parity of esteem for mental health services, and we intend to review commissioners’ plans for 2014/15 to ensure that this happens,’ it continued.

The statement repeats the tariff document’s explanation for the differential cost uplifts. ‘However the 2014/15 national tariff payment system allows commissioners and providers to negotiate and agree local prices where there is no national price,’ the statement said. ‘It is therefore open to a commissioner to agree a price which reflects the particular costs of their local provider.’

NHS ENGLAND/MONITOR STATEMENT IN FULL

‘The National tariff payment system for 2014/15 sets out the responsibility of providers and commissioners to agree the prices paid locally for mental health services. NHS England remains committed to the delivery of parity of esteem for mental health services, and we intend to review commissioners’ plans for 2014/15 to ensure that this happens.

 The service development uplift for the national prices in the 2014/15 national tariff consisted of two aspects; the friends and family test uplift which applied to all providers, and an uplift to help address reported cost burdens associated with recommendations coming from reviews such as those conducted by Robert Francis and Bruce Keogh. NHS England has estimated that providers will spend an additional £150 million in 2014/15 to meet requirements linked to these recommendations, the costs of which relate primarily to acute health services. It was therefore decided that the cost uplift should apply specifically to the acute sector.  However the National tariff payment system for 2014/15 allows commissioners and providers to negotiate and agree local prices where there is no national price.  It is therefore open to a commissioner to agree a price which reflects the particular costs of their local provider.

'Both NHS England and Monitor are committed to working with all parts of the service, including mental health and community services, to understand cost pressures in order to support development of the 2015/16 national tariff. We are committed to moving towards a more evidence-based approach to pricing.’