Clarity sought on activity penalties

by Seamus Ward

06 November 2020


The NHS is seeking clarification on the status of activity recovery penalties under the elective incentive scheme amid rising hospitalisations due to the second wave of Covid-19.

In guidance on payments and contracts over the second half of the financial year, NHS England and NHS Improvement set out expected system activity levels, including hitting 90% of last year’s overnight elective and outpatient/day case procedures from October. For these procedures, baseline payments are calculated as 90% of monthly 2019/20 activity.Simon Stevens

The guidance also introduced an incentive scheme. If the value of elective and outpatient procedures exceeds the baseline, 75% of the difference between the value and the baseline is paid to the system. However, should the value of activity fall below the baseline, 25% of the difference between that value and the baseline will be removed from system finances.

Providers had reportedly been increasing activity in the late summer and early autumn. Last month, NHS Providers chief executive Chris Hopson told the organisation’s annual conference that trusts were recovering services quickly.

However, with the second wave of the pandemic leading to rising hospital admissions, trusts are cancelling planned care. In a press conference to highlight the pressure on the NHS this week, NHS England chief executive Simon Stevens (pictured) said cancer treatments were running above their normal level and many hospitals were making ‘great progress’ in restoring routine operations. But though the NHS is well prepared, the winter will be difficult with the additional annual pressures during this period.

‘The truth is, unfortunately, that if coronavirus takes off again that will disrupt services,’ he said. ‘We are seeing that in parts of the country where already hospitals are dealing with more coronavirus patients now than they were back in April. In the North West of England, for example, a quarter of patients who would otherwise be having their routine operations, those beds, services and facilities are instead having to be repurposed for coronavirus.’

Sir Simon said that in early September there were under 500 inpatients with Covid-19, but by the beginning of October that had increased to 2,000 and now it is around 11,000. ‘That’s the equivalent of 22 of our hospitals full of coronavirus patients.’

There is a feeling among providers that the national bodies will review or suspend the penalties if surges in admissions make delivery of planned care impossible. Healthcare Finance has contacted NHS England for comment, but it is yet to reply.

One finance manager said that while nothing formal had come from the national body, the service should know soon if any adjustments will be made for October.