• Removal of unpopular emergency marginal tariff and readmission penalty as part of new emergency payment system 
  • Changes to market forces factor, which has a significant impact on trust income
  • Incentives for phone and Skype outpatient consultations

Regulators have proposed sweeping changes to NHS payment tariff rules, beginning next year, which could see significant swings in income for trusts.

The plans in a tariff engagement published by NHS England and NHS Improvement today include: 

  • Confirmation of a “blended approach” to paying for urgent and emergency care
  • A revision of how the market forces factor is calculated, which could see shifts in income of up to 2 per cent next year
  • Confirmation of substantial changes to outpatient tariffs
  • Changes in payment for maternity services

Urgent and emergency care

System leaders have proposed a “blended approach” to emergency care tariffs, covering accident and emergency attendances, non-elective admissions and potentially ambulatory emergency care. The proposed approach involves a new split in how emergency care is funded between block and activity based payments.

Today’s document reveals that, under the proposals, the marginal rate emergency tariff – under which providers receive less income for emergency activity above a certain threshold – will be abolished as a national rule, along with the 30 day readmission rule, which also restricts payments. These have been longstanding rules and unpopular with providers.

The consultation document said the new set up would be on a “financially neutral basis between providers and commissioners”. NHS Improvement data for 2017-18 put the impact of MRET on trusts at £338m and the readmissions sanctions at £234m.

The changes are intended to share “responsibility for the resource consequences of increases in acute activity and the benefits of system wide action to reduce growth in activity” across both commissioners and providers, the document said.

Market forces factor 

The proposals would see calculations for the MFF – which equates to significant income for some trusts – updated from the 10 year old information. The proposal is to phase changes over four years, but analysis suggests that in 2019-20 some providers could see income reductions of up to 2 per cent.

There are likely to be significant changes over the four years, particularly related to changes in wages and land prices in different parts of the country.


The document also confirm that, as HSJ reported in June, a new tariff is being considered for outpatient appointments.

This includes non-mandatory price lists for “non-face-to-face follow-up” outpatient appointments, and for appointments that are not consultant led.

The guidance document said the model “incentivises increased use of non-face-to-face (eg telemedicine) and non-consultant-led activity where clinical appropriate”. It added, the change “helps providers meet the [elective waiting time] standard by freeing up consultant time to deliver more attendances”.

It also reveals that NHS England will pilot a single price for all outpatient attendances by speciality regardless of how or by who the appointment is conducted which it will then consider “developing… further in future years”. The paper did not say which areas will be involved in the pilot.

Ophthalmology, dermatology and nephrology which require regular ongoing follow-up appointments will also have their first attendance prices cut by 10 per cent.

Details of the likely impact of the changes are not yet known – NHS Improvement and NHS England are now producing an “individual impact analysis” modelling the effect of them.

NHS Providers head of policy Amber Jabbal said: “Acute providers will be pleased to hear that the marginal rate emergency tariff is being abolished, which we have long argued for. It is a key driver of provider deficits, and has penalised hospital trusts for rises in emergency admissions that they can do little to control.”