16 February 2004 nGMS and PMS FINANCE Michael Munt.

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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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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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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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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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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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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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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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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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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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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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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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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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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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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• 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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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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• 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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• 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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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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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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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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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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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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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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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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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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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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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

16 February 2004 nGMS and PMS FINANCE Michael Munt.

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