• Struggling rural trust in dispute with CCG after abandoning block contract
  • National regulators step in after local arbitration fails between Wye Valley Trust and commissioners
  • Disagreement focuses on funding to clear 52 week wait backlog and savings targets

National regulators have stepped in to resolve a multimillion pound dispute between commissioners and a struggling trust over its backlog of patients awaiting treatment.

Board papers revealed Wye Valley Trust, which runs hospital and community services in Herefordshire, walked away from its block contract with Herefordshire Clinical Commissioning Group in August and reverted to payment by results.

The decision came after the trust said the block contract did not cover the growing demand placed on it, specifically clearing the dozens of patients waiting more than 52 weeks for treatment, or shoulder a fair share of £6m in savings needed across the system.

A paper that went to the trust board this month said that: “Given a significant rise in emergency activity and the requirement to improve access times for patients waiting on a waiting list, the trust has had no option but to treat the increased volume and seek additional payments for the work.”

However, the CCG has contested the trust’s right to “unilaterally” withdraw from the block contract, which it says was legally binding. About £15m in payments from the CCG to the trust for 2018-19 are now being disputed.

CCG papers from late last month also showed the commissioner told the trust on 13 November that, instead of funding the organisation to clear its elective list, it now planned to commission “alternative providers to ensure the 52 week wait position is effectively managed”.

The dispute was referred to NHS England and NHS Improvement in November after more than seven months’ back and forth over the terms of the block contract.

Several attempts at local arbitration failed and an initial CCG offer of an additional £913,000 to cover the elective backlog was rejected by the trust as inadequate. At the time of publication, the matter had not been resolved.

Wye Valley Trust is forecasting one of the biggest deficits relative to income in the country for 2018-19. The trust is expecting to report a deficit of £35.1m, about 19 per cent of total turnover. However, this result assumes the CCG agreeing to meet additional costs under a payment by results contract, which it has so far refused to do.

At the end of October, the trust had 91 patients who had waited more than 52 weeks for treatment, down 22 on the month before. It was one of the worst performing trusts in the country against both the referral to treatment and accident and emergency targets in the second quarter of 2018-19.

Figures for October show Herefordshire CCG was on target to deliver a budget break-even position for 2018-19.

The CCG and the trust are both part of “One Herefordshire”, an agreement for health and care organisations to work more closely together across the county.

NHS England’s finance director for the West Midlands, Brian Hanford, said: “NHS England is working with NHS Improvement, Wye Valley Trust, Herefordshire CCG and other partners to resolve some complex funding and contract issues.”

The CCG said the parties were working together with regulators to resolve “outstanding financial and contracting issues”. The trust referred HSJ to its board papers.

An earlier version of this article stated that the CCG was expecting a £5.8m surplus in 2018-19. This was underlying surplus, excluding one-off costs, not the reported surplus. The story has now been amended to reflect an expected break-even result for the CCG.