News / Combined tariff returns as Flory unveils PBR changes

The NHS in England will abandon the planned same day (PSD) tariff launched in April and revert to a single tariff covering elective inpatient and day case activity from 2010/11, says early notification from the Department of Health.

Full draft guidance and details of the tariff uplift for next year are not due until the end of November, alongside the operating framework for 2010/11. But director general of NHS finance, performance and operations David Flory (pictured above) wrote to finance directors at the start of September setting out the key changes for next year.

The main change is the move back to a single tariff for day case and inpatient activity. Mr Flory’s letter said the change would address concerns that the PSD tariff ‘under-rewarded day case activity’.

It follows a review of the PSD, overseen by the PBR External Advisory Group, to ensure incentives were in the right place.

The thinking around the original single tariff was to provide a financial incentive to treat more patients as day cases where appropriate. While the separate PSD tariff removed this incentive, the eventual game plan had been to provide an incentive to move day case activity to less acute settings once outpatient procedures were covered by the same PSD tariff.

At the same time the Department has signalled its intention to remove the non-mandatory outpatient procedure tariffs that dominated negotiations in 2009/10. Instead, mandatory tariffs will be published for a ‘limited number of high-volume healthcare resource groups’.

Other outpatient procedures will be covered in the mandatory outpatient attendance tariffs.

Diagnostic imaging will also be rebundled back into outpatient attendances, although separate prices will be provided to support the removal of imaging from appointments where direct access imaging has already taken place.

Andy Hardy, chairman of the HFMA’s PBR Group, said this was sensible as some areas had seen an increase in imaging as a result of the changes.

He also welcomed the earlier timetable, whereby sense-checking of the tariff will get under way this month (two months earlier than in 2008) with a full road test in late November and final tariff package published in January. ‘PCTs and providers need to be able to assess and understand the impact of tariff changes as soon as possible and it will be important that we stick to this timetable,’ he said.

In other changes, HRG4 will be introduced for accident and emergency services after last year’s postponement. And planned procedures not carried out (HRG WA14Z) will be excluded from mandatory tariffs, giving PCTs more flexibility to negotiate local prices depending on the reasons for missed or cancelled procedures.

Mr Flory also confirmed plans to introduce a currency for adult mental health services and to adopt best practice tariffs in four areas. While these initial best practice tariffs are expected to lead to both increases and decreases in current tariff rates, he stressed PBR’s role in improving efficiency in future.

‘As we move forwards into challenging economic circumstances, we will increasingly look to base tariff prices on the most efficient service models rather than simple averages,’ he said.