• Blackpool CCG says Spire Healthcare’s activity and costs increased by 25 per cent, despite referrals increasing by just 3 per cent
  • There have previously been issues between the two organisations, with Spire making an official complaint in 2013 that the CCG was directing patients away from it
  • Initial audit findings “do not indicate any issues with regards to the coding processes”

FINANCE: Commissioners in Blackpool are investigating a sharp increase in activity and costs with a private provider, despite GP referrals only rising slightly.

Board members at Blackpool Clinical Commissioning Group have reported that Spire Healthcare’s activity and costs increased by 25 per cent in the six months to October 2015, despite referrals increasing by just 3 per cent.

Amanda Doyle

Amanda Doyle

Amanda Doyle is chief clinical officer of Blackpool CCG

The activity relates to Spire’s Fylde Coast Hospital, which provides some elective care for the CCG. It received £4.5m from the CCG last year.

There have previously been issues between the two organisations, with Spire making an official complaint in 2013 that the CCG was directing patients away from its Fylde Coast Hospital.

Monitor did not uphold the complaint, but said the CCG had not made sure patients were offered a choice of hospital for routine surgery.

Draft minutes of a board meeting in January, published last month, said: “Spire Hospital’s activity and costs had increased by 25 per cent while referral growth was only 3 per cent and we were unsure why this had happened.

“[Blackpool CCG chief clinical officer Amanda Doyle] commented that work was taking place in looking at the issues at Spire Hospital. It was recognised that the costs were higher at Spire than at other providers.”

The minutes said a formal contract meeting was held, also including Fylde and Wyre CCG, where “a full and frank discussion had been held, particularly around coding, charging and the speed at which patients were now being seen”.

An internal audit is currently being carried out by Mersey Internal Audit Agency.

Blackpool CCG said initial findings from the audit “do not indicate any issues with regards to the coding processes used by Spire”, but it would continue to work with the firm to review any follow up issues.

Martin Rennison, director of commercial contracting at Spire, said: “It is not unusual for a clinical commissioning group to carry out audits with healthcare providers to understand the factors leading to change in activity flows…

“We believe the spike in costs is most likely due to a combination of increased referral flows from GPs under choice via the NHS e-referral service and fluctuations in underlying case mix. Due to the construct of national tariff, relatively small case mix variation can drive disproportionate movement in activity value.

“This situation is also somewhat magnified by an indicative activity plan that underestimated the likely in-year activity. We are confident that the activities we are undertaking with the commissioner to review contract performance will provide the required understanding.”