NHS England has told its local area teams they must impose a lower tariff price for mental health and community providers than for their acute counterparts. This is despite it previously indicating that clinical commissioning groups had the freedom to devise their own tariff level.
In a response to criticism over its joint decision with Monitor to impose 20 per cent higher efficiency cuts on non-acute trusts than on acute organisations, NHS England last month told CCGs they could exercise “local freedoms” when negotiating prices.
But HSJ has learned local area teams - which commission local specialised services on behalf of NHS England - have been told any negotiations must be based on the nationally imposed differential tariff.
NHS England finance director Paul Baumann told HSJ: “The relevant deflator in the tariff is always the basis of contract setting for non-tariff business. This is clearly set out in the instructions and is a long-standing principle which has nothing to do with the specifics of price setting for 2014-15.”
Under NHS England and Monitor’s plans, the differential deflator will be applied to healthcare tariffs and local contracts from next month. This will leave acute trusts facing a 1.5 per cent cut in prices and their non-acute counterparts facing a 1.8 per cent cut.
Monitor and NHS England claimed the difference was justified because the costs of implementing the Francis report did not affect non-acute trusts. Health minister Norman Lamb has described this position as “flawed and unacceptable.”
One chief executive at a mental health trust, which is heavily dependent on specialised commissioning, said it had become apparent in his area that the local freedom did not apply to local area teams.
“Our local area team director went and asked NHS England and was given the explicit instruction not to negotiate on the deflator,” he said. “This applies to all CAMHS [children and adult mental health services] beds and forensic in-patient services.”
Chris Hopson, chief executive of the Foundation Trust Network, said: “I am sure NHS England would wish to avoid the charge of hypocrisy by ensuring that the way their specialist commissioning teams act is in exactly the same way as they have asked CCGs to act.
“It would clearly be inappropriate for them to tell CCGs one thing and then for their specialist commissioning business to behave in a different way.”
Mr Baumann also responded to the threat of legal action which is being considered against the differential tariff by at least one trust, as well as charities.
“We are wholly confident that all actions we and Monitor have taken in relation to tariff-setting for 14-15 are compliant with the relevant legal frameworks,” he said.