30.10.15
DH to push ahead with controversial tariff objection threshold changes
The Department of Health (DH) has decided to controversially raise the objection threshold when setting the national tariff and abolish the objections “by share of supply” component, despite strong opposition from providers.
In the government’s response to its consultation on proposals for revising the objection mechanism, it stated that it will raise the objection threshold for providers and commissioners from 51% to 66%.
And despite 65% of respondents disagreeing with removing the share of supply objection threshold, which included 90% of providers, the DH it will push ahead with revised plans as “we need to maintain financial stability within the system”.
The Health and Social Care Act 2012 makes provision about when certain percentage levels of objection are received from commissioners or providers, when certain actions are required, and the relevant threshold levels for objections are prescribed by regulations.
However, back in January, providers rejected the controversial 2015-16 national tariff proposals with around 13% of CCGs, 37% of relevant providers by number, and 75% of relevant providers by share of supply, objecting to the proposed method.
Since then, the DH, Monitor and NHS England agreed that the objection mechanism process needed to be “reviewed” to provide for a process that is “fair and stable” for the sector as a whole as well as ensure such plans are affordable.
Responding to the DH’s decision, Saffron Cordery, director of policy and strategy at NHS Providers, and a member of the NHE editorial board, said: “The results reinforce what we and our members have tried to avoid – NHS providers will no longer be able to raise a formal objection to the national tariff.
“This undermines the ability of the NHS frontline to provide an early warning signal if proposals are undeliverable, and risk compromising the quality of care. Raising the objection threshold to 66% and abolishing objections “by share of supply” component make it mathematically impossible for NHS foundation trusts and trusts to trigger the objection mechanism, despite NHS providers providing over 95% of all services covered by the tariff.”
She added that the objection mechanism should only ever be a last resort, used in exceptional circumstances “as was the case last year”.
“With the majority of providers already in deficit this financial year, NHS trusts across the acute, ambulance, community and mental health sectors were right to raise formal objections to the tariff last year, which led to the proposals being revised and £500m for the provider sector. This demonstrates the mechanism worked,” added Cordery.
Rob Webster, chief executive of the NHS Confederation, said the national bodies have failed to deliver an acceptable tariff in either of the last two years.
“In 2014-15 the system penalised community, mental health and ambulance services but they could not object. In 2015-16 the proposed tariff suited no-one and led to an objection,” he said. “Unfortunately, the exception is in danger of becoming the rule. We now have a chance with the creation of NHS Improvement to demonstrate a new approach – one where NHS England and NHS Improvement work with the service to develop, test and implement a tariff with the right balance of incentive and risk.
“We urge the government and national bodies to embrace the offer from the service to work together on this.”
Dr Steve Kell, NHSCC co-chair, and chair of NHS Bassetlaw CCG, said commissioners are “really pleased” that the DH has listened to the calls of its members to remove the share of supply threshold and increase the objection thresholds for providers and commissioners to the NHS pricing method from 51% to 66%.
The 2015-16 tariff objection process was a good example of why it needs to be urgently rebalanced, said Dr Kell.
The DH added that intends to lay draft amending regulations by November 2015.