16 february 2004 ngms and pms finance
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16 February 2004
nGMS and PMS FINANCE
Michael Munt
16 February 2004 2
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nGMS and PMS FINANCE
Michael Munt
16 February 2004 4
nGMS and PMS IMPLEMENTATIONFINANCE
Overview
• Financial Arrangements
• Contractors - Statement of Financial Entitlements
• Allocations to PCT’s
• Contractor Budgets
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nGMS and PMS IMPLEMENTATIONFINANCE
Financial Arrangements - Headlines
• Spending on Primary Medical Services in the UK to increase from £6.1bn in 2002/03 to £8bn in 2005/06
• Arrangements underpinned by Gross Investment Guarantee for the years 2003/04 to 2005/06
• All allocations are now cash limited with some minor elements of dispensing remaining as non cash limited
• Link to Local Delivery Plan
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nGMS and PMS IMPLEMENTATIONFINANCE
Gross Investment Guarantee (GIG)• Mechanism to monitor overall spend on Primary
Medical Services.• Technical Sub Committee established comprising
representatives of DH/NHSC/BMA to monitor arrangements.
• Component Parts
• GMS Non Cash Limited
• PCT Unified Allocation, GMS Cash Limited,
Dispensing Drug costs
• Centrally Funded Initiatives
• New Monies Primarily For Quality
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nGMS and PMS IMPLEMENTATIONFINANCE
Contractor Entitlements
• Red Book replaced by the Statement of Financial Entitlement (SFE)
• Concept of Entitlement continues but not on the basis of individual Practitioner but on the basis of a Contractor Practice
• All payments under the old arrangements cease 31 March 2004
• PCT’s must make adequate provision for the accrual of outstanding amounts in their 2003/04 accounts
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nGMS and PMS IMPLEMENTATIONFINANCE
• Additional cash financing requirement will, if necessary be made available
• Any additional costs to be met by PCT
• The SFE gives Contractors certainty over the minimum level of entitlement
• Discretionary funds will be available to Contractors
• The SFE sets out 17 different types of entitlement
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nGMS and PMS IMPLEMENTATIONFINANCE
Key EntitlementsGlobal Sum
• Based on Formula - Carr Hill to establish allocation fair shares
• Formula is weighted at Contractor level To be updated every quarter for changes in Contractor characteristics and weighted population
• Indicative price is currently £50 per weighted patient
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nGMS and PMS IMPLEMENTATIONFINANCE
Off formula adjustments for :
• A London weighting of £2.18 per registered patient not weighted
• Temporary patients adjustment to be calculated as part of a five year rolling average
• Additional Service and Out of Hour Opt outs
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nGMS and PMS IMPLEMENTATIONFINANCE
Minimum Practice Income Guarantee
• To provided support to global Sum formula losers
• Income levels protected based on comparison of the Global Sum and Global Sum Equivalent
• Global sum Equivalent based on reference period July 2002 to June 2003
• GSE to be adjusted to take account of changes in list size between reference period and 1st April 2004
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nGMS and PMS IMPLEMENTATIONFINANCE
The initial MPIG is then amended to take account of the adjusted GSE
MPIG is a one off calculation
Uplifted only in line with Global sum
No Global Sum uplift in 2005/06
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nGMS and PMS IMPLEMENTATIONFINANCE
Quality payments
Three payments under the quality heading:
• Quality Preparation Payments -2004/05 is the second and final year
• Quality Aspiration based on one third of the anticipated level of achievement at average £75 per point For 2005/06
• For 2005/06 aspiration payments will be set at 60%
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nGMS and PMS IMPLEMENTATIONFINANCE
Quality Achievement
• Achievement Payments will be based on achievement points
multiplied by £75 for a Contractor with average list size
• Payable by end of April 2005
• PCT’s will need to provided for these amounts in their 2004/05 annual accounts
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nGMS and PMS IMPLEMENTATIONFINANCE
Other entitlements will cover:
• Directed Enhanced Services
• Locum Payments
• Seniority payments (delayed retirement)
• Recruitment and Retention Initiatives
• Dispensing to be rolled forward but fee rates have been uprated
• Premises - Existing commitments brought forward
• Information Technology - Changes reflect new reimbursement arrangements
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nGMS and PMS IMPLEMENTATIONFINANCE
Implications for Personal Medical Services
• Establish baseline 2003/04 allocation up to wave 5b• Excludes Quality preparation and flu allocations• Access to new funding streams • Improved seniority pay and pensions• Ability to opt out of OOH responsibility• PMS to GMS movement• potential MPIG equivalent based on local data or benchmark based
GMS Global Sum Equivalent based on banded list size
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nGMS and PMS IMPLEMENTATIONFINANCE
Allocations to PCT’s
• 2004/05 Cash Limited Primary Medical Services
• Ten separate funding streams but only one “pot”
• No separate target for primary care funding will be part of the overall Unified Budget determination
• Will need to be managed as part of the overall UB Will become incorporated into three year allocation process
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nGMS and PMS IMPLEMENTATIONFINANCE
• Not ring fenced except for Enhanced Services/OOH
• Local floor level to be set for Enhanced services
• Majority of funding to be allocated to PCT’s
• Only minimal central budgets
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nGMS and PMS IMPLEMENTATIONFINANCE
Allocation Arrangements
Global Sum and MPIG
• Data to inform the calculations via a number of Allocation Working papers
• Practice populations from the Exeter system during April 2003
• PCT’s were asked to confirm the attribution of GP’s to practices and practices to PCT’s
• Adjusted for PMS practices in waves 5a and 5b
• Expenditure mapped on a cash payments basis from the reference period July 2002 to June 2003 to establish GSE
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nGMS and PMS IMPLEMENTATIONFINANCE
• Global sum covers 27 categories for expenditure previously paid via the NCL route
• Changes in configuration of practices
• Included were the implication of GP vacancies but NOT practice staffing
• Additions will be made to the £ per weighted registered list size for the increase in employers superannuation cost
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nGMS and PMS IMPLEMENTATIONFINANCE
• Agreed that the historical cost will be on formula.
• Superannuation adjustment will effect both GMS and PMS
• Further information will be provided once agreed
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nGMS and PMS IMPLEMENTATIONFINANCE
Out Of Hours Funding
There are four specific sources of funding to resource out of
hours services:
• Existing Unified Budget for Out of Hours Development • Additional recurring allocation of circa £46m• A non recurrent sum of £28m over two years • A transfer of 6% of a contractors Global sum excluding
MPIG.• The allocation methodology for the OODF will change to a
capitation basis form 2005/06.
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nGMS and PMS IMPLEMENTATIONFINANCE
Enhanced Services
• Most of the enhanced services has already been allocated to PCTs in their three year allocations
• HSC 2002/12 identified sums of £315m/394m/460mand a national floor
• 2004/05 additional funding will result from the transfer in of existing non cash limited payments.
• The national floor is to be replaced by a local PCT floor in 2004/05.
• Planned spending needs to be signed off by the PEC. Need to discuss with the local LMC
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nGMS and PMS IMPLEMENTATIONFINANCE
Quality and Outcomes Framework
Three funding elements for the QOF
• Quality Preparation - to be allocated in Main Allocations
• Aspiration - allocation to be made to PCT in April 2004
• Achievement - resource only to be allocated in year
• Financial provision to cover QOF indicatively sufficient to support 74% and 85% achievement in 2004/05 and 2005/06
• NHS to manage the risk through the NHS Bank - policy still to be
determined
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nGMS and PMS IMPLEMENTATIONFINANCE
PCT Administered funds
• This will cover:• Seniority• Locum Payments• Recruitment and Retention arrangements
To be allocated mainly on an historical basis except recruitment and retention which will be held central to target
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nGMS and PMS IMPLEMENTATIONFINANCE
Premises Funding
Allocations will be based on
• Existing spend• Agreed new premises developments contractually
agreed by 30 September 2003• New premises developments including LiFT based on
a weighted capitation approach
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nGMS and PMS IMPLEMENTATIONFINANCE
Information and Technology
• Historically funding for IMT part of the Cash limited GMS allocation
• Topped up by at least £20m to meet 100% costs of minor upgrades and maintenance. This will be made recurrent.
• Allocations to be mapped on the basis of historical spend
• Balance of funding will be held centrally within National Programme for IT
• PCT’s will need to establish asset registers
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nGMS and PMS IMPLEMENTATIONFINANCE
• Establishing Contractor BudgetsPCT’s will receive ACTUAL Allocations which will include indicative budgets for contractors
ACTION REQUIRED• To establish indicative budgets one week after receipt of allocation• To negotiate and provisionally agree budgets• Contracts signed by 31 March 2004• Firm up Actual Contractor budgets during April/May 2004• Make first payment by the end of April 2004, agree a deduction for
superannuation purposes
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nGMS and PMS IMPLEMENTATIONFINANCE
Indicative Contractor Budgets
Contractor Budget Spreadsheet distributed in December 2003
PCT’s will need to adjust indicative global sum and MPIG’s where appropriate for:
• Any changes in practice configuration since the reference period
• Changes in registered list size
• Temporary Patient adjustment to be updated for a five year average
• Any agreed staff vacancy factors
• Take account of any PMS returners
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nGMS and PMS IMPLEMENTATIONFINANCE
Contractors Budgets post April 2004
Exeter system will automate the process
Changes that will still need to be reflected by PCT are:
• Contractor movements between PMS/GMS
• Confirm registered populations are accurate
• Reflect any change in opt out arrangements
• Take account of contract terminations, withholding of monies, splits and mergers
• Start to record Temporary Patients numbers for future reference and allocation purposes
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nGMS and PMS IMPLEMENTATIONFINANCE
Monitoring Arrangements
Need to change both National and Local Reporting arrangements. This will require:
• Changes to local expenditure coding structures
• Local Reporting and monitoring arrangements
• National Financial Information System
• Statutory Accounts
Aim to produce one set of information that can meet all requirements