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16.12.15

Three options being considered for multi-year tariffs

Three potential options have been produced for potentially setting the National Tariff over more than a year, according to Monitor board papers

Following workshops with NHS England a proposal has been developed to set prices and rules in advance for a three-year period during which there would be “no section 118 consultation unless Monitor and NHS England decide to reopen the tariff”. 

A second option would seek to commit to a method of price setting and key input assumptions for a three-year period, but continue to produce a section 118 consultation and calculate prices annually. 

The other alternative is to set a formula for the calculation of prices in advance for a three-year period through the local pricing rules, but only calculate and mandate  prices in advance for years two and three for a sub-set of services, for example, specialised services. 

Toby Lambert, Monitor’s director of pricing, said these options will be “appraised and set out in an options paper in February 2016”. 

Last week, NHS England’s chief financial officer, Paul Baumann, stated that there is “every intention” to deliver on multi-year settlements and that his organisation intends to provide clarification through three-year firm allocations and two-year softer indications. 

Speaking at the Healthcare Financial Management Association (HFMA) annual conference, attended by NHE, Baumann confirmed that the scope of multi-year settlements will be set out during NHS England’s board meeting on 17 December.

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