NHS hospitals could be paid extra under 'cherry picking' rules

The new rule, set out in the department’s final Payment by Results guidance for 2013-14, builds on rules introduced a year previously to allay concerns about providers – particularly those in the private sector – profiting from “cherry picking”. 

This is the phrase used when a provider is paid the national tariff price for a service even though it limits its work to the less-complex, and therefore lower-cost, patients paid for under that tariff.

Rules introduced this year gave commissioners the flexibility to cut the tariffs they pay to such providers, but did not mandate increased payments to hospitals that are left with disproportionate numbers of complex and costly patients.

However, the guidance for 2013-14 appears to endorse above- as well as below-tariff payments.

“Commissioners will be required to base any decision to reduce tariffs on clear evidence which shows that the provider would be over-reimbursed at the national tariff rate,” it states. “They must also give consideration to the potential for other providers to be left with an altered, more costly, casemix which may therefore also require a funding adjustment.”

As was indicated in the draft document published in December, the final PbR guidance also includes a list of high-volume procedures that may be more susceptible to “cherry picking”.

Meanwhile, the guidance reveals the DH has changed its mind about how funds released by the 30 per cent marginal tariff for emergency care is spent.

December’s planning guidance, Everyone Counts, said that the 70 per cent of the tariff rate which is not paid to providers under the arrangement would be “administered” by NHS Commissioning Board local area teams.

But last week’s guidance says it will be held by CCGs, which will make decisions in consultation with others. It said: “Following further discussions it is clear that transparency around the use to which these savings are put, and the outcomes which are achieved for patients, are the most important elements for all partners in making this policy work.

“For 2013-14 commissioners will therefore need to work with providers, including social care, and the NHS Commissioning Board local area teams, to develop proposals for the use of the savings.”

The guidance says there should be “early engagement in the financial year on how the funds will be distributed… Business case proposals from providers may be invited early in the planning process, so that funds can be rapidly redistributed to the providers to pump prime a range of schemes to reduce the incidence of and/or the consequences arising from emergency admissions.”