NHS providers face increased strain next year, with the price for their services cut by at least another 1.5 per cent and commissioners obliged to strictly enforce financial penalties and to clear their own debts.

The Department of Health’s operational plan for 2012-13, published this afternoon, lays out an uncompromising set of business rules aimed at accelerating its £20bn savings programme and ensuring clinical commissioners do not inherit financial problems.

In recent weeks there has been widespread speculation that the 2012 Operating Framework would offer some concessions to help the health service cope with its austere financial circumstances.

But the most commonly mooted concessions – encouragement for primary care trusts to move away from payment-by-results, and a reversal of the harsh new fines for emergency readmissions – both failed to materialise.

NHS deputy chief executive David Flory told HSJ there would “absolutely not” be any “moving away from the principles of the payment system towards more block contracting” and the framework was “really clear” about enforcing the rules.

The framework states that “the PbR guidance and accompanying Code of Conduct will describe one system and one set of rules for England that are mandatory”.

It continues: “Where commissioners and providers find the rules prevent them doing the best for patients, then local variation is permitted. However, variations which in effect enable the continuation of poor-quality, inefficient models of care or restrict patient choice are not valid.”

It emphasises that commissioners “must enforce the standard terms, in particular the financial penalties for under performance”.

PCT clusters will also be allowed to use contractual penalties to punish providers if they are not satisfied with the “completeness and quality of a provider’s data”.

PCT allocations will rise by on average 2.5 per cent next year, but no PCT will be allowed to plan for a deficit. Any commissioner who has built up debt in previous years will be obliged to clear it by March 31 2013.

The tariff price for NHS services will also be cut again, by “at least” another 1.5 per cent, to drive increased efficiency in providers.

Mr Flory said: “We’re mindful that if commissioners aren’t enforcing the terms of the contract that can be interpreted as colluding over inefficiencies locally and that is simply is not good enough.”

The plan retains rules introduced this year – and deeply unpopular with providers – barring non-payment for many emergency readmissions.

However, the DH alongside the Foundation Trust Network will sponsor sample audits of readmissions to “inform more detailed guidance on the operation of the policy” for next year.

In response to concerns about private sector “cherry picking” of easier and more lucrative patients, commissioners will now be required to cut the price they pay a provider below tariff “if the type of patients that a provider treats results in it incurring lower costs than the average of the tariff category”.

“That isn’t about poking the independent sector providers in the eye, it’s about being really clear about the transparency and fairness on that,” Mr Flory told HSJ.

King’s Fund chief economist John Appleby tweeted that this could mean the reintroduction of price negotiation in the NHS.

Following the damning Cooperation and Competition Panel report this year on PCT’s application of “any qualified provider” rules, PCTs will be required to review their practices to ensure they are compliant with NHS competition rules.

From 2012, any PCT decisions “that would restrict patient choice must be taken at board level and published annually, including the rationale, impact and period of operation”, the framework states.

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