News / HRG4+ plans welcomed but NHS awaits key tariff details

Monitor and NHS England set out their tariff plans for 2016/17 in engagement documents that confirmed several changes, including plans to move to the more granular HRG4+ currency for payment, changes to the marginal rate emergency tariff (MRET) and best practice tariffs.

But proposals for the efficiency factor, cost base and service development will not be published until after the spending review on 25 November. A further document is also planned for later in the year seeking feedback on proposals for specialised care reimbursement.

An impact assessment, published alongside the engagement documents, showed HRG4+ could have a big effect on orthopaedic prices. For example, providers currently on the enhanced tariff option (ETO) could see increases in some HRG4+ subchapters and significant decreases in others, though these would be phased in.

Monitor and NHS England also propose to set MRET at 70% for all providers. In this financial year, only providers that opted for the ETO receive payment at this level for activity above an agreed baseline, with those on the default tariff rollover receiving 30% of the full tariff.

‘Broadly speaking, we welcome the proposals, including the move to HRG4+ as, with the greater granularity of the currency, it will improve the accuracy of payments for the services provided,’ said HFMA director of policy and technical Paul Briddock. ‘We also welcome the expansion of the range of services covered by the tariff and the fact that an impact assessment has been carried out. It appears most providers and commissioners will not be significantly affected and that those who potentially are – mainly specialist providers – will have the impact of the tariff changes smoothed.

‘However, more crucially we are still waiting to understand the full effects of the changes in the 2016/17 tariff as we do not know yet what the cost uplift and efficiency factor are likely to be. These were the most contentious areas in last year’s tariff proposals.’

Phillippa Hentsch, NHS Providers’ lead policy adviser for funding and resources, welcomed the move to HRG4+. While the proposed revision of MRET was positive, she insisted that while NHS demand and costs continued to grow by 4% every year hospitals should be paid the full tariff rate.

‘Monitor and NHS England’s transparent engagement on the proposals is a start, but providers need more information to have confidence that there will be a fair and appropriate tariff next year,’ she said.

‘A number of detailed decisions have yet to be made, including the efficiency requirement and the payment of specialised services, making it very difficult for providers to plan with certainty for 2016/17. This means that we would be unlikely to see a statutory consultation on the tariff until the beginning of 2016, leaving little time for contract negotiations before the start of the new financial year.’