2020-21 National Tariff Payment System

1 2020/21 National Tariff Payment System November 2020 2 | 2020/21 National Tariff Payment System | Contents Contents 1. Introduction .. 4 The National Tariff and Covid-19 .. 5 2. Scope of the National Tariff .. 8 Public health services .. 8 Primary care services .. 9 Personal health budgets .. 9 Integrated health and social care .. 10 Contractual incentives and sanctions .. 11 Devolved administrations .. 11 Overseas visitors .. 13 3. Currencies with National prices .. 14 Classification, grouping and currency .. 15 Currencies for which there are National prices .. 17 High cost exclusions .. 28 The innovation and technology Tariff /innovation and technology Payment .

2 28 4. Method for determining National prices .. 30 Overall approach .. 30 The method for setting prices .. 32 Managing model inputs .. 34 Manual adjustments .. 36 Volatility .. 37 Cost base .. 38 Cost uplifts .. 39 Efficiency .. 46 5. National variations to National prices .. 48 3 | 2020/21 National Tariff Payment System | Contents Variations to reflect regional cost differences: the market forces factor .. 49 Variations to reflect patient complexity .. 51 Variations to support new Payment approaches .. 53 6. Locally determined prices .. 57 Principles applying to all local variations, local modifications and local prices .. 58 Local variations.

3 60 Local modifications .. 62 Local prices .. 67 7. Rules for services covered by blended payments .. 78 Blended Payment for emergency care .. 78 Blended Payment for outpatient attendances .. 83 Payment rules for maternity services .. 89 8. Payment rules .. 94 Billing and Payment .. 94 Activity reporting .. 94 4 | 2020/21 National Tariff Payment System | Introduction 1. Introduction 1. This is the National Tariff for the NHS in England. It specifies the following components that make up the National Tariff Payment System for 2020 to 2021 (the 2020/21 NTPS): currencies National prices the method for determining those prices the local pricing and Payment rules, including the rules for blended payments the methods for determining local modifications related guidance.

4 2. Since 1 April 2016, Monitor and the NHS Trust Development Authority have operated as a single integrated organisation known as NHS Improvement. Since 1 April 2019, NHS England and NHS Improvement have come together to act as a single organisation. This document is published in exercise of functions conferred on Monitor by section 116 of the Health and Social Care Act 2012 (the 2012 Act). The proposals which form the basis of this National Tariff were agreed between NHS England and Monitor under section 118 of the 2012 Act. In the rest of this document, NHS Improvement means Monitor, unless the context otherwise requires. 3. This 2020/21 NTPS has effect for the period beginning on the date of publication and ending on 31 March 2021, or the day before the next National Tariff published under section 116 of the 2012 Act has effect, whichever is the 1 If a replacement National Tariff was to be introduced before the end of the one-year period, this Tariff would cease to have effect when that new Tariff takes effect.

5 5 | 2020/21 National Tariff Payment System | Introduction The National Tariff and Covid-19 In response to the Covid-19 pandemic, the NHS adopted special Payment arrangements for 2020/21. Under these arrangements, most providers and commissioners moved to block contract payments on account . Contracting and Payment guidance to support this is available from the NHS England and NHS Improvement website. However, the National Tariff legislation and framework continues to apply. As the publication of the 2020/21 NTPS was delayed, the 19/20 NTPS has continued in effect for this financial year, up until the publication of this document. As the Covid-19 special Payment arrangements involve departures from the National prices, currencies and blended Payment arrangements specified in the NTPS, they involve local variations/departures agreed in accordance with the National Tariff rules set out in Sections 6 and 7 of the 2019/20 NTPS.

6 The contracting and Payment guidance referred to above included a template statement to be used by commissioners to record those variations/departures and to submit for publication in accordance with section 116(3) of the Health and Social Care Act 2012. In addition, the NTPS continues to apply for services outside the scope of the emergency Payment arrangements. This includes some activity delivered by independent sector providers. The NTPS prices also continue to be the basis on which charges for overseas visitors are calculated (see Section below). To note that the NTPS prices which applied from 1 April 2020 until the publication of this document are those set out in the 2019/20 NTPS.

7 As part of the third phase of the NHS response to Covid-19, a revised financial framework applies during the latter part of 2020 This framework will retain simplified arrangements for Payment and contracting but with a greater focus on System partnership and the restoration of elective services. 3 The local variations and departures which underpin these arrangements will continue in effect under the rules in Sections 6 and 7 of this document. 2 3 6 | 2020/21 National Tariff Payment System | Introduction 4. The document is split into the following sections: Section 2: the scope of the Tariff Section 3: the currencies used to set National prices Section 4: the method for determining National prices Section 5: National variations to National prices Section 6: locally determined prices Section 7: rules for blended payments Section 8: Payment rules.

8 5. There are seven annexes , listed in Table 1. Table 1: 2020/21 NTPS annexes 6. The National Tariff is also supported by documents containing guidance and other information, listed in Table 2. Table 2: Supporting documents to the 2020/21 NTPS 4 This workbook contains non-mandatory prices, including those for maternity and outpatient attendances that can be used to construct the blended payments for these services (see Sections and ) Annex Description A National Tariff workbook (including National prices and prices to be used for emergency care and outpatient attendance blended payments) B Guidance on currencies with National prices C Guidance on currencies with no National price D Guidance on best practice tariffs E Technical guidance for mental health clusters F Models used to calculate prices G Guidance on locally determined prices Title Non-mandatory prices workbook4 A guide to the market forces factor Guidance on blended payments (including detailed guidance on emergency care, maternity, outpatient attendances and adult mental health services) 7 | 2020/21 National Tariff Payment System | Introduction 7.

9 All annexes and supporting materials can be downloaded from the NHS England and NHS Improvement 8. The National Tariff forms part of a set of materials that inform planning and Payment of healthcare services. Related materials include the NHS Operational Planning and Contracting Guidance, the NHS Standard Contract and guidance on Commissioning for Quality and Innovation (CQUIN). The guidance on 2020/21 financial arrangements in response to the Covid-19 pandemic should also be referred to. 9. For an introduction to the National Tariff , please see the supporting document, Understanding and using the National Tariff . If you have any questions about the Tariff , please contact 5 Guidance on maternity pathway Payment Understanding and using the National Tariff 8 | 2020/21 National Tariff Payment System | Scope of the National Tariff 2.

10 Scope of the National Tariff 10. As set out in the 2012 Act, the National Tariff covers the pricing of healthcare services provided for the purposes of the NHS. Other than the exclusions described in Sections , this covers all forms of NHS healthcare provided to individuals, whether relating to physical or mental health and whether commissioned by clinical commissioning groups (CCGs), NHS England or local authorities acting on behalf of NHS commissioners under partnership arrangements. 11. Various healthcare services are, however, outside the scope of the National Tariff . The rest of this section explains these exclusions. Public health services 12. The National Tariff does not apply to public health services that are:6 provided or commissioned by local authorities or Public Health England commissioned by NHS England under its Section 7A public health functions agreement with the Secretary of State7 commissioned by NHS England or a CCG on behalf of a local authority pursuant to a partnership agreement under section 75 of the National Health Service Act 2006.