News / Prepayments given green light for maternity tariff

Antenatal care payments should be accounted for in two financial years if the antenatal care spans the year-end, according to  Department of Health technical guidance.

Under the new pathway tariff, providers receive a single upfront payment to cover antenatal care, followed by separate payments for the delivery and postnatal care. This replaces the previous system, where individual interactions between women and providers triggered separate payments.

Once the new antenatal payment is made, it is non-refundable, regardless of what subsequently happens with the pregnancy. This was taken by some to mean that commissioners should account for the whole payment in the year it was paid. This view was reinforced by the fact that the alternative – accounting for some of the charge as a

prepayment for future activity – is effectively off-limits for commissioners.

But, for consolidation purposes, the provider accounting treatment has to mirror the commissioner and this would have left providers effectively recording income before they had earned it.

The Department’s guidance, issued as an update to the online NHS finance manual in March, confirmed that commissioners should record a prepayment to reflect the deferred income recorded in the provider’s accounts.

‘Even though [providers] have received all of the cash, they have yet to provide some of the services and therefore should not recognise all of the income upfront,’ the guidance said, adding that this interpretation was in line with accounting standard IAS18.

The guidance also suggests that trusts should calculate the percentage of services delivered for each ongoing pregnancy at the year-end, and recognise that proportion of income, while deferring the rest.