NHS representative bodies have expressed strong concerns about government plans to raise the bar provider objections must clear to block tariff proposals.

  • NHS Providers objects to DH plans to raise threshold for objections to national tariff pricing proposals
  • DH wants to raise proportion of providers that must object from 51 per cent to “between 66 and 75 per cent”
  • Representative body warns that NHS trusts and FTs make up only 62 per cent of relevant providers
  • NHS Confederation worried that plan “might indicate DH concern that tariff proposals might become increasingly unpopular”

NHS Providers has opposed Department of Health proposals to scrap the objection threshold for providers by share of supply and to raise the proportion of commissioners or providers that must object from 51 per cent to “between 66 per cent and 75 per cent”.

The tariff for this financial year was rejected by 37 per cent of providers that accounted for 75 per cent “share of supply” for the relevant services.

In its response to the consultation, NHS Confederation said the blocking of official pricing proposals – which meant prices had to be set through a last minute “voluntary” tariff – had an “unacceptable impact on local planning”.

NHS Providers chief executive Chris Hopson said the representative body would oppose the government plans, because the setting of national tariff prices for treatments was “crucial” to providing high quality care, and providers needed to have a “clear voice in a collaborative tariff setting process”.

He added: “The objection mechanism is one of the only formal channels available to NHS providers to raise concerns about their ability to deliver the right quality of care.

“The fact that the mechanism was triggered last year, in relation to the 2015-16 tariff, was not a symptom of the mechanism being wrong, but a reflection that the initial proposals were undeliverable and represented an unacceptable risk to the quality of patient care.

“Those concerns have been proved right. NHS providers will only be able to deliver the right quality of care by running up an unsustainable level of financial deficit this financial year, currently estimated at £2.1bn.

“The position would have been considerably worse had providers not objected to the tariff and, as a result, secured a series of changes, including injection of a further £500m funding for providers.”

Chris Hopson

Setting the national tariff prices for treatments is ‘crucial’ to providing high quality care’, Chris Hopson said

He said trusts were concerned by the proposal to raise the proportion of organisations that must object to trigger a review because NHS trusts and foundation trusts only made up 62 per cent of “relevant providers” able to object.  

He added: “This means that even if every single relevant NHS provider objected to the proposals, the threshold would not be met.”

NHS Confederation said it was “cautious” about the proposal to raise the objection threshold, which it said might “indicate a concern of the Department of Health that tariff proposals might become increasingly unpopular”.

It added that it was “keen to clarify how the engagement process will be improved alongside increasing the threshold to reassure our members that they will have a fair opportunity for their views to be heard”.

The response adds that the current process for setting prices has “at times been unfair and ineffective, which fails the objectives set out by the Department of Health”.

“National bodies have been set a near impossible task of sharing the risk of health funding lagging behind demand across the system,” it adds.

The organisation said raising the threshold to the upper level of 75 per cent would “effectively render the whole process meaningless”.

It adds: “A 66 per cent threshold may be a more appropriate level and within the range suggested”, but only if engagement with providers is improved.

On the proposal to remove the share of supply threshold, the response says: “Significant objections were legitimately raised by tertiary providers in 2015-16 as a result of late and unfair changes and arguably the share of supply mechanism was the only route to an improved outcome.”

However, it says it could support scrapping the share of supply threshold because it was having a “greater impact than was intended”.

It adds: “Providers should continue to have an opportunity to object to the tariff and make their concerns known, yet this should be on an equal footing with all providers and also commissioners. The share of supply threshold would seem to benefit a particular group of providers and therefore runs counter to this principle.”

Under current rules, a proposed tariff must be revised or referred to the Competition and Markets Authority for review if 51 per cent or more of commissioners or providers object to the planned method for setting prices. The same rules apply if it receives objections from providers responsible supplying more than 51 per cent of the relevant NHS services.

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