Two incumbent community providers have been named as the lead contractors for a new £57m out of hospital services model proposed for Coventry and Warwickshire.

Coventry and Rugby Clinical Commissioning Group and Warwickshire North CCG have awarded new contracts for out of hospital community and mental health services. The intention is that the contracts will support a new clinical model for out of hospital services.

Similar proposals will be considered for approval by South Warwickshire CCG, which has a governing body meeting next week.

The model would effectively make the incumbent providers of community services in the region the lead contractors for out of hospital services via four outcomes based contracts.

Although the commissioners need to publish a notice in the Official Journal of the EU, the contracts will not be competitively tendered.

A joint governing body paper for the Coventry and Rugby and Warwickshire North CCGs said Coventry and Warwickshire Partnership Trust would be the lead provider for the Coventry contract, which is worth £21.7m for 2017-18. It is already the mental health provider for the entire patch and runs community services in the city.

South Warwickshire Foundation Trust, which already runs community services across the county, is proposed as the lead provider for three contracts covering South Warwickshire, North Warwickshire, and Nuneaton, Bedworth and Rugby.

These contracts would be worth a combined £35.7m for 2017-18.

The contracts will be signed in November and take effect in April 2018 under current timescales.

The contract values have been calculated using the current values of the services in scope.

Further details will be worked out with providers in the coming weeks. The CCGs have recommended creating a collaborative arrangement between commissioners and providers via a memorandum of understanding.

South Warwickshire CCG planned to competitively tender community services last year, before abandoning the proposals in favour of a more collaborative approach.

The two lead providers are expected to create two “single integrated points of access”, one covering Coventry and another for Warwickshire.

Under this will sit 10 local hubs and 29 “place based teams”, each managing a population of 30,000-50,000 people.

The hubs will act as a “hub of professionals” for multidisciplinary teams to access from any place based team.

The lead contractors will “be the point of central coordination for people across the system and will have an emphasis of improving the outcomes for patients”, an assessment of the plans published by commissioners said.

Although four contracts are proposed, “the clinical model and outcomes commissioned will be consistent across Coventry and Warwickshire”.

The lead providers will be able to organise other providers and subcontract services but could not decommission “material” subcontracted providers without CCG approval.

The change in contract model was in response to concerns about poor coordination between services and was causing “frustration and confusion” for patients.

“The current approach to commissioning the out of hospital services does not reflect the future service requirements or reflect the most efficient use of resources,” the board papers say.

The lengths of the contracts are yet to be determined, but planned payment structure suggests it will be at least three years. HSJ understands contract lengths of 7-10 years are under consideration.

Contracts will be outcome based with a base payment for managing a population and additional funding tied to performance.

In the first years, the performance payments will be related to “transformation milestones” but by year three they will be linked to improved population outcomes. These are yet to be detailed, but will spread across six domains, including people with long term conditions, young adults with complex disabilities, and high users of health and social care services.