Monitor’s pricing team are readying themselves to be able to refer rejected tariff proposals for 2015-16 to the Competition and Markets Authority as soon as next month, should the regulator’s board decide to do so.

  • Monitor is readying itself to refer rejected 2015-16 tariff proposals to the CMA in May, if its board decide to do so
  • HSJ understands it is quite likely a proposal on whether or not to refer will go to Monitor’s May board meeting
  • A referral to the CMA could have significant implications for the 30 trusts – mainly teaching hospitals and specialists – that rejected the 2015-16 “voluntary” tariff
  • Monitor’s pricing team has warned it will be “challenging” to reach agreement with NHS England on the content and scope of 2016-17 tariff by the planned deadline

A report going to Monitor’s April board meeting on Wednesday says the regulator’s pricing team “aims to be in a position to refer the 2015-16 national tariff to the CMA in May 2015, should the board decide to do so” at next month’s meeting.

The controversial tariff proposed for the current financial year was blocked in January when providers responsible for three-quarters of all relevant services lodged formal objections to the offer.

The unprecedented provider revolt left pricing authorities with no formal means to agree national NHS prices before the start of the financial year.

Monitor and NHS England have since secured agreement from 88 per cent of providers to an amended “voluntary” tariff offer for 2015-16, known as the enhanced tariff offer, which will be implemented using flexibilities originally introduced to allow local areas to vary from national prices.

But the pricing authorities are still required to formally set a national tariff for the current year. Under the Health Act 2012, the only options available once a tariff has been rejected are to refer it to the CMA or revise proposals and consult again.

Monitor and NHS England have said that the formal process will have no impact on trusts that signed up to the ETO. They will remain on the agreement until April next year.

However, it could have significant implications for the 30 trusts – including some of England’s best known teaching hospitals and specialist hospitals – that rejected the ETO. These organisations currently remain on 2014-15 prices, but the pricing authorities have said they will not receive commissioning for quality and innovation payments. Once a tariff has been formally set for 2015-16, trusts that rejected the ETO will be moved onto the new national tariff for the rest of the financial year.

HSJ understands it is quite likely a proposal on whether or not to refer the issue to the CMA will go to Monitor’s 27 May board meeting – however, a decision could be further delayed if there is significant political uncertainty in the immediate aftermath of the general election.

The regulator is unlikely to want to make what could be a controversial decision until it knows how the next health secretary will treat the issue. Given the possibility of a minority or coalition government after 7 May, this may take longer than usual to establish.

Pending a decision on whether or not to refer to the CMA, Monitor is also continuing to work on revised official tariff proposals for 2015-16. The paper going to the board this week says that the pricing team is exploring the option of consulting on these proposals alongside its initial consultation on prices for the next financial year.

It says that Monitor and NHS England aim to reach agreement on the content and scope of the 2016-17 tariff by 19 May, but “this will be challenging”. It adds that “prompt agreement” will be necessary if the pricing authorities are to publish their initial consultation on next year’s tariff – known as the tariff engagement document – by June. It also notes that publishing the document later than June would “limit the scope on consulting for 2015-16 alongside 2016-17 proposals”.

A Monitor spokesman said: “Following the rejection of part of the national tariff for 2015-16, Monitor and NHS England introduced the enhanced tariff option, which most of the sector agreed to use.

“However, we still have a legal duty to either consult the sector on new plans or refer the existing plans to the Competitions and Markets Authority. We have not yet made a decision on which course of action to take.

“As a responsible regulator, we have prepared for both options and we do not have a preference for either one at the present time.”