Question to the Department of Health and Social Care:

To ask Her Majesty’s Government, in the light of the consultation on the NHS National Tariff Payment System 2015–16, what steps they have taken and are planning to take to ensure that health providers treating complex patients are not under-reimbursed by the payment by results system; and whether a more cost-reflective tariff system will be implemented in 2015–16.

Following the outcome of the consultation on the 2015/16 National Tariff Payment System, Monitor has to decide whether to refer the matter to the Competition and Markets Authority or develop further proposals on which to re-consult. In deciding on the way forward, Monitor will carefully consider responses received through the consultation. However, this process, and resolution under either option, will take time, which means that a new tariff will not be in place by 1 April 2015.

On 18 February 2015, NHS England and Monitor wrote to providers of National Health Service-funded care to offer the choice of an enhanced alternative, the Enhanced Tariff Option (ETO), for 2015/16, which involves a set of local variations under the 2014/15 national tariff rules. If adopted by the whole sector, it would be worth around £500 million more to providers than the 2015/16 tariff proposals consulted on last year. A copy of the letter is attached. The ETO includes a change to the proposed acute specialised services gain and loss share rule, whereby providers of specialised services will retain 70% of the value of any over-performance against baseline, rather than 50%. The list of providers who chose this alternative is attached. Those who have not accepted the ETO will remain on 2014/15 tariff arrangements in the interim.

For future years’ tariffs NHS England and Monitor are considering the use of a more recent version of the Healthcare Resource Group currency as the basis for setting national prices, known as HRG4+. This currency is designed to better reflect the differences in the costs of treating routine (typically non-specialised) and complex (typically specialised) patients. NHS England and Monitor will begin engagement on future plans with the sector shortly.