• The first of two judicial reviews against NHS England over its accountable care organisation contract was heard today
  • Claimants said NHS “cannot wind back the clock to block pricing”
  • NHS England said law did not prohibit other means of payment and pricing

A High Court was told the NHS “cannot wind back the clock to block pricing” in the first of two judicial review hearings over NHS England’s accountable care organisation contract. 

The challenge by the campaign group 999 Call for the NHS was heard by the High Court in Leeds today. The group alleges that the ACO contract breaches sections of the Health Act 2012 and claims that the way they propose to use whole population budgets is unlawful.

NHS England argues the ACO contract proposals do not breach the law, or national tariff rules, and would allow for some activity related payments. 

David Lock QC, representing 999 Call for the NHS, told the court the ACO contract “fails to set a price and fails to follow rules” of the 2012 Act in relation to tariff services.

He added: “The disadvantage [of the contract] is the commissioning board does not know how much it will be charged at the start of the year.

“Essentially, this case is about returning to a block payment scheme. Whether it is a lawful contract is a live issue.”

Mr Lock said budgets “could not be ascertained” at the start of each year and by definition could not be set annually as proposed. 

He added: “You can not wind back the clock to block pricing.”

Over the past 15 years, acute services have generally been paid for under the payment by results national tariff. 

The ACO contract proposes commissioners can give providers a budget for an area’s population on an annual basis under what it terms a whole population annual payment.

Fenella Morris QC, defending, said the “only question” to answer for the court was whether the proposed contract was lawful under the 2012 act.

Ms Morris told the court there were still aspects of the contract which would allow for further “activity” related payments outside of the annual budget set as a block payment.

She said: “The [contract] is not the entire story. It is not unshiftable as a binding document.”

She told the hearing the clinical commissioning groups would still be given the choice on whether to adopt the contracts and there would be “no compulsion” to do so.

Ms Morris added the contracts were still to be “populated” and there would be extensive consultation post-verdict of the judicial review by the NHS.

NHS England also argued in its written case to the court that the 2012 act did not prohibit payments being made on a non-episodic basis - for example for running a service or cluster of services. It also said block contracts and other non-PbR payment systems have been used commonly in the NHS in recent years.

Judge Tim Kerr told the court today he would issue his judgement at a later date, and indicated he would seek to do so before a second judicial review over the ACO contract is held next month.

The second judicial review has been brought by a group including the late cosmologist Professor Stephen Hawking, and is due to be heard in London on 23 and 24 May.

The judge today said: “I reserve my judgement, not for very long I hope.

“I know there is some urgency. I will have in my mind the date in London.”

Dudley and Manchester have been identified as the areas most likely to first implement the ACO contract. Both were set to award a contract for April this year. However commissioners in Dudley have postponed their plans pending an NHS England public consultation, while Manchester is still deciding whether to proceed.

Campaigners have argued the contract could lead to privatisation and limit access to NHS services. Some have also said it should be subject to more consultation and Parliamentary debate.

A spokesman for NHS England said the challenge was “a mistaken effort which would frustrate the move to more integrated care between hospitals, mental health and community services”.

He said: “The effect would be to fragment care and drive apart the very people who are now rightly trying to work more closely together on behalf of the patients they jointly serve.”

By agencies.