News / Guidance reveals details of 2009 PBR package

Major changes to the payment by results (PBR) system in England have been unveiled in draft guidance published alongside the new operating framework for 2009/10.

The key change will see the introduction of new healthcare resource groups (HRG4) as the basis for the new tariff. While the tariff has been published for roadtesting, the aim is not to verify the accuracy of the tariff but to aid understanding and identify any unintended consequences of the switch in currency. Strategic health authorities have been given some flexibility to provide support in addition to tariff income in specific cases.

In addition to the new tariff currency, a planned same day (PSD) tariff is being introduced to incentivise the shift of activity to less acute settings in appropriate cases. Along with a new short stay elective tariff for adults, this will mean there are now four inpatient tariffs: elective; short stay elective; non-elective; and short stay non-elective. The PSD tariff will initially only apply to day case activity, with a non-mandatory tariff also released for outpatient procedures.

With HRG4 able to reflect more accurately casemix complexity, the need for specialist top-ups has reduced. Only two top-ups will remain for 2009/10 – for orthopaedics and specialised services for children. All providers remain eligible for the orthopaedic top-ups, as in the current year, but only eligible providers can access the children’s services top-up.

Another key change is the removal of the differential tariff for emergency admissions. This means that all emergency activity within PBR will now be subject to payment at full tariff. As earlier advised in November, the HRG version 3.5 tariff structure will remain in place for accident and emergency services.

Although the move to HRG4 is seen as potentially destabilising for some organisations, the changes to the market forces factor may have an equally significant impact. The revised market forces factor will see some major changes in MFF top-ups paid to many organisations. The new range of MFF indices stretches from 1 (Royal Cornwall Hospitals NHS Trust) to 1.3476 (University College Hospitals NHS Foundation Trust). This takes account of a capping mechanism that aims to cushion the financial impact of the introduction of the revised MFF formula.

The PBR guidance also breaks down the tariff uplift calculation. Some 2.7% has been allowed for pay with 0.4% allowed for non-pay inflation and 0.2% for clinical negligence and 1% for secondary care drugs. On top of the 3% efficiency requirement, the tariff uplift also takes account of an expected beneficial impact of the reduction in VAT by reducing the uplift by 0.1%.