News / Modest expansion to PBR in Department’s final tariff

By Seamus Ward

The Department of Health has continued its ‘managed expansion’ of the scope of payment by results (PBR) in its final tariff before handing over responsibility for currency design and price setting to Monitor and the NHS Commissioning Board.

In a letter launching the sense check for PBR in 2013/14, NHS deputy chief executive David Flory said the Department would continue to use tariffs to reduce length of stay, where clinically appropriate, and shift more care out of hospitals and into the community. The scope of PBR would be widened, he said, with the continued roll-out of mental health currencies – this year accompanied by indicative prices and the phasing in of mandatory tariffs for chemotherapy.

Mr Flory said evidence showed that best practice tariffs – those priced to incentivise high-quality, cost-effective care – were delivering real improvements in the quality of care patients receive. New tariffs will promote better management of long-term conditions (such as Parkinson’s disease); incentivise day case and outpatient treatments where clinically appropriate (tympanoplasty, for example); and improve the quality of some interventions by linking an element of payment in endoscopy to service accreditation.

The Department is also continuing to pursue tariffs that cover pathways of care.

The current plan is to mandate the maternity pathway payment system from April. This was introduced in shadow form in 2012/13, but only limited progress has been made in testing the currencies, which were a major priority for former health secretary Andrew Lansley.

The proposal, which is to be tested as part of the sense check, is to have mandatory prices for the delivery section of the pathway and non-mandatory prices for ante and postnatal care.

The Department is again proposing to unbundle tariffs for outpatient diagnostic imaging from the outpatient attendance tariff. They were unbundled in 2009/10 but ‘rebundled’ in 2010/11 (except for direct access) over concerns that separate prices did not incentivise providers to manage the number of tests.

Mr Flory said that unbundling would address concerns that the current arrangements do not

cover the cost of imaging associated with specialised care and may act as a disincentive to order appropriate scans.

He added: ‘We are aware of the potential financial risks associated with this change of approach, but believe the clinical benefits to be significant. We will look to mitigate the risk when drafting the PBR guidance for 2013/14.’

Mandatory tariffs for chemotherapy delivery and external beam radiotherapy will be published for 2013/14, although it is expected that organisations will move from local prices to the new tariffs in a staged way.

The Department said this meant ‘moving at least half way’ from local to national prices, similar to the approach taken in 2011/12 with the renal dialysis tariff.

The sense check tests the draft tariff with a small number of organisations to ensure it does not introduce perverse clinical incentives, for example. PBR business rules, such as those on readmissions, will be set out in draft PBR guidance to be published along with the road test tariff in December. Final guidance is expected in February.

Ahead of the publication of the business rules, the Foundation Trust Network (FTN) was keen to keep the spotlight on the policy on readmission of patients within 30 days of discharge. An FTN survey demonstrated that its members were concerned commissioners were not using the fines paid by providers to implement readmission avoidance schemes.

The FTN’s strategy director, Saffron Cordery, said: ‘There needs to be a significantly increased level of accountability placed on commissioners to ensure that the non-payment for readmissions policy is not simply an additional efficiency requirement imposed on providers.’

She added: ‘The policy remains fundamentally unfair as long as it continues to penalise providers for readmissions that are outside their control.’

HFMA president Sue Jacques said: ‘We will need to wait until business rules are published later in the year to start to see how tariff changes will impact locally.

‘But it will be important that the efficiency challenge for trusts – delivered both through the general efficiency requirement and through measures such as the marginal rate and readmission rules – are manageable and share risks across whole health economies so that organisations can work together to optimise services for patients.’