19/20 Payment Reform Proposals

2019/20 payment reform proposals for acute care were published by NHS improvement on the 9th October 2018. The deadline for giving feedback to the proposals has been set at 5pm on 29th October.
Sollis delivered a software update on 16th October, implementing all the key changes being proposed (including 4 new tariffs to model the changes to MFF), and turning around the changes within a week after publication. This will allow customers to assess the impact of the changes.
The significant changes to the tariff are summarised below.

1. Duration of the Tariff

There was a two-year tariff spanning financial years 2017/18 and 2018/19. In 2019/20 the tariff has been reduced down to a single year tariff so that there is more flexibility for NHS Improvement to respond to developments taking place within the NHS.

Another Consultation tariff is due to be published in January 2019.

2. Payment Approach for Emergency Care

A new blended payment model has been proposed to cover A&E attendances and non-elective admissions (excluding maternity and transfers).

This ‘blended’ payment approach will comprise of two components. A fixed payment and a volume related element. Two models are being considered:

Model A pays a fixed amount of 100% of costs (based on HRG prices) of the forecast activity and pays a 20% variable payment/deduction of any activity above or below the forecast.

Model B pays a fixed amount of 80% of costs (based on HRG prices) of the forecasted activity and pays a 20% variable payment on ALL of the activity.

Both models also include the concept of a glass ceiling whereby normal cost and volume payments will apply if the actual figures are significantly above or below the forecasts.

An illustration of how payments may differ between the cost and volume approach in 2017-2019 and 2019/20 for Model B, including the glass ceiling.

Alongside these changes, the Marginal Rate Emergency Tariff and 30-day readmission rules will be abolished.

Clearly, these are significant changes, and care economies will wish to analyse their impact, not least on the return-on-investment and risk share models associated with their current attendance avoidance and admission avoidance schemes. Robustness of forecasting methodology is also key.

3. Market Forces Factor

MFF has not been updated for almost 10 years and the current MFF is based on PCT boundaries, which no longer exist. Further, wages, which are used to calculate MFF, have changed during this long period.
MFF will now be calculated on the Travel to Work Areas, however this will create significant changes in incomes if the MFF changes were to be implemented without a transition path. NHS Improvement are therefore suggesting a four year transition path and they have published MFF values for the next 4 years, so that the effects can be modelled.

4. New Outpatient Telephone Tariffs

NHS Improvement believe that the way Outpatient activity is funded could be improved. Their aim is to maintain quality of care whilst incentivising non-face-to-face activity such as telephone and Skype consultations.

To work towards these aims they have produced non-mandatory prices for non-face-to-face follow-ups for specialties with National prices. This moves from a single £23 telephone consultation in the current tariff to over 100 new non-mandatory tariff prices for this type of activity. Where used, Sollis will price this activity in Clarity using local costs.

Leave a Comment