Most NHS providers opt for enhanced tariff for 2015/16

Monitor and NHS England today report that 210 out of 240 NHS trusts and foundation trusts (88 percent of all NHS providers) will move to the new voluntary tariff option (the ‘Enhanced Tariff Option’) for 2015/16.

They will gain their share of the improved tariff funding made available to the NHS in December’s Autumn Statement, worth up to £500 million.

The full list of providers choosing the ETO is available (updated 11 March).

The ETO will help:

  • reduce the funding pressures on acute hospitals, without raiding necessary investments in mental health, primary care and other services;
  • support wider action to unlock provider and commissioner-led efficiencies, while ensuring the orderly management of the overall NHS budget within the cash limit set by Parliament;
  • enable the timely completion of the annual NHS contracting round and give more certainty to commissioners and providers for 2015/16.

Under the ETO, the marginal rate providers are paid for extra emergency admissions will increase from 30 percent now to 70 percent; the marginal rate for extra specialised services will also increase from the originally proposed 50 percent to 70 percent and the headline efficiency requirement will be 0.3 percent lower than originally proposed. The ETO incorporates an allowance for service developments in mental health and changes to trusts’ clinical negligence premiums. Participating providers will join an NHS-wide efficiency collaborative to help them track and manage cost pressures, including temporary staffing costs and procurement savings.

The minority of providers who have not affirmatively opted in to the ETO will continue on current prices (the 2014/15 ‘Default Tariff Rollover’, or DTR) until such time as a new tariff is established. This will not be until later this year, possibly following a referral by Monitor to the Competition and Markets Authority. As previously notified, since providers on the 2014/15 DTR would not be contributing proportionately to the shared NHS-wide 2015/16 efficiency goals through the tariff deflator, they will instead be ineligible for discretionary payments, including CQUIN, next year.

Contracting Timetable

A revised timetable for planning, contracting and dispute resolution in 2015/16 has already been agreed between Monitor, TDA and NHS England (see below). In revising the timetable we sought to:

  • ensure that sufficient time is allowed before draft full plans are submitted
  • allow enough time between the draft and final plans for feedback to be responded to; and
  • give due consideration to other commitments such as year-end accounting.

The final NHS Standard Contract will be issued next week, together with an updated version of the Dispute Resolution Process for 2015/16, and more detail on administering the ETO and DTR. It remains essential that commissioners and providers make every effort to have signed contracts in place by 31 March 2015.

  Timetable item (applicable to all bodies unless specifically referenced) Original timetable Revised timetable
1 Contract negotiations Jan – 11 Mar Jan – 31 Mar
2 Contract tracker to be submitted each Thursday From 29 Jan From 29 Jan
3 Submission of draft activity plan data(NHS Trusts, NHS FTs (except distressed NHS FTs)) n/a 27 Feb
4 Submission of draft finance and activity plan data(CCGs, NHS England and distressed NHS FTs) n/a 27 Feb
5 Confirmation by providers of chosen tariff option -ETO or DTR n/a 4 Mar, 6pm
6 Checkpoint for progress with planning measures and trajectories (CCGs, NHS England) 13 Feb 20 Mar
7 National contract stocktake – to check the status of contracts 20 Feb 27 Mar
8 Contract Signature Deadline 11 Mar 31 Mar
9 Full commissioner plans approved by Governing Bodies of CCGs Draft plans approved by NHS Trusts and NHS FTs n/a By 31 Mar
10 Post-contract signature deadline: where contracts not signed, local decisions to enter mediation 25 Feb 1 Apr
11 Submission of full commissioner plans (CCGs, NHS England)
Submission of draft plans (NHS Trusts & NHS FTs)
27 Feb, noon 7 Apr, (noon)
12 Assurance of most recent plan submissions by national bodies 27 Feb – 30 Mar 7 Apr – 13 May
13 Checkpoint for progress with planning measures and trajectories (CCGs, NHS England) 6 Mar 14 Apr
14 Contracts signed post-mediation 11 Mar, noon 17 Apr, noon
15 Entry into arbitration where contracts not signed; and submission of Dispute Resolution Process paperwork 11 Mar, noon 17 Apr, noon
16 Contract arbitration panels and / or hearings 13 – 24 Mar 20 – 29 Apr
17 Arbitration outcomes notified to commissioners and providers By 25 Mar By 30 Apr
18 Plans approved by Boards of NHS Trusts and FTs By 31 Mar By early May
19 Contract and schedule revisions reflecting arbitration findings completed and signed by both parties By 31 Mar By 7 May
20 Submission of final plans (NHS Trusts & FTs)
Commissioner plan refresh if required (CCGs and NHS England)
10 Apr, noon 14 May, noon
21 Assurance and reconciliation of operational plans From 10 Apr From 14 May