Monitor and NHS England are to tighten their grip on the pricing of specialist services and push local commissioners to move away from national NHS prices, according to plans unveiled last week.

Early proposals for the 2015-16 NHS payment system, published last week signalled the two bodies’ intention to extract greater “value” from hospital services for which there is no national price and to accelerate the “the pace of convergence towards only remunerating efficient costs for specialised services”.

They propose to do this either by providing commissioners with new guidance on existing contracting options or by introducing new rules for local price setting in the 2015-16 national tariff.

Details of these approaches to cost constraint come after NHS England admitted it had struggled to keep the spiralling costs of specialist services within budget.

The organisation this year planned to spend £400m of inherited surpluses to offset a potential £800m overspend in its specialised commissioning budget.

Chief operating officer Barbara Hakin admitted there were “very significant” risks in specialised commissioners plans for closing the remainder of the gap.

Many specialist services do not have nationally set prices and NHS sources claim there is significant variation in the prices providers have negotiated locally for these services.

The document also indicated there will be a requirement on commissioners and providers to consider moving away from national prices in 2015-16, where doing so would enable a move to new patterns of care.

It stated: “National prices need not be a default option to be invoked when service change or improvement is better for patients.

“The requirement in the local payment rules for commissioners and providers to engage constructively reflects a wider principle that should inform local negotiations – that all parties should make efforts to consider and accommodate payment arrangements that move away from national prices, where this enables service improvements that benefit patients.”

The document added that the national pricing authorities “want to move away from a position where innovation can be stifled by a commissioner or provider that is unwilling to engage”.

The focus of this push for local pricing will be on those areas where Monitor and NHS England believe national reform of the activity based payment by results system is most urgently needed.

This included the development of new ways of paying for the integrated care of the frail elderly and people with long term conditions, and payment reforms that would support changes to urgent and emergency care proposed by Sir Bruce Keogh’s review of the services.

The national payment authorities are proposing to provide a menu of new payment mechanisms that could be adopted for these services that “we want to see implemented by local health economies at pace and scale”, the document said.

For integrated care these options are likely to include forms of capitated payment for the total costs of managing certain patients across all providers involved in their care.

For emergency care, they are likely to include proposals for a move away from activity based payments towards paying providers for maintaining certain levels of capacity, possibly coupled with the opportunity for providers to earn more by attaining higher quality standards.

The document stated: “We see a pressing need to reform payment structures for urgent and emergency care, and want to explore how that could be done with a menu of options available for possible local adoption for 2015-16, to inform potential roll out in 2016-17.”

Pricing authorities to tighten grip on specialist service payments