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NHSI to implement two-year contract tariff despite concerns


14 November 2016

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NHS Improvement will go ahead to plans to introduce a two-year tariff, despite concerns about their delivery.

The final consultation, which closes on December 6, identifies several concerns from respondents of the initial consultation, including that cost data “will be out of date for the 2018/19 tariff year; more recent data should be used rather than rolling over data used for 2017/18 prices”.

NHS Improvement will go ahead to plans to introduce a two-year tariff, despite concerns about their delivery.

The final consultation, which closes on December 6, identifies several concerns from respondents of the initial consultation, including that cost data “will be out of date for the 2018/19 tariff year; more recent data should be used rather than rolling over data used for 2017/18 prices”.

The tariffs, which will cover the 2017/18 and 2018/19 financial years, are intended to reduce the administrative burden of annual contracting and make it easier for commissioners to plan ahead.

But respondents said it “may not be the best time to introduce a two-year tariff” when “so many other changes” are taking place.

The document also identifies several changes outside of commissioner and provider control, including the impact of Brexit, future NICE recommendations and inflation being “materially different to current projections”.

NHS Improvement responded by saying that “there will always be challenges in setting forward-looking prices but these challenges are faced by other regulated industries and we feel that the advantages of greater planning certainty outweigh the risks”.

It added: “Given the relative certainty of NHS funding at the current time, the fact that there is no planned revision of CCG allocations until 2019 and the wider planning being undertaken to support the sustainability and transformation plans we believe now is an opportune time to introduce a two-year tariff.”

The change to a two-year tariff comes as a number of other elements of the NHS financial framework also move to a two year rotation, including the development of a two year NHS Standard Contract and a two year planning round.

The tariffs would include two price lists, one for 2017/18 and one for 2018/19 and a set of currencies, national variations and rules, which in most cases would apply to both years.

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