Payment by Results
Jonathan Storey15 October 2008
Agenda
1. What is PbR?
2. Why is PbR necessary?
3. How was it introduced?
4. How does PbR work?
5. What does it mean for commissioning?
6. What does the future hold for PbR?
What is PbR?
1. A transparent, rules-based system for paying Trusts and other providers– fair and consistent basis for provider funding– payments proportionate to activity levels and adjusted for case-
mix reward efficiency – encourages additional activity for sustainable waiting time
reductions – supports patient choice & promotes diversity of provision
2. A National Price tariff for the most common treatments together with set of rules prescribing how it is to be applied
3. Current scope of Admitted Patient Care (HRG3.5), Outpatients and A&E
Why is PbR necessary?
1. Situation prior to PbR was unsustainable – unregulated market ‘free for all’
2. International examples – similar systems in most other developed economies
3. Support for NHS Reforms – Access (Waiting times), Patient Choice and Plurality of Provision
4. Deliver benefits for patients, clinicians and commissioners and providers– Transparency– Equity– Efficiency– Incentives
How was it introduced?
1. Preparatory phase - 2003/04 - 2004/05 – Rebasing exercise 2005 to assess impact on commissioners &
providers
2. Transitional phase - 2005/06 - 2008/09– Purchaser parity & Provider transition adjustments (+/- 2% pa)– Market Forces Factor (MFF) with central payment by DH
3. Live operational phase - 2008/09 onwards with…
4. Major changes planned for 2009/10– New tariff structure based upon HRG4– MFF payments devolved to PCTs– Increased reliance on SUS
2004/05 2005/06 2006/07 2007/08 2008/09
Introduce Tariff [HRGv3.5]
Rebasing Exercise #1
Change Tariff [HRG4]
Payment by Results fully live
Provider impact 25% 50% 75% 100%
Transitional Phase
Introduction of PbR
Rebasing Exercise #2
2009/10
How does PbR work?
1. National Tariffs derived from actual cost data (annual provider ‘Reference Cost’ data collection exercise) adjusted for…
2. Market Forces Factor (MFF) – unavoidable cost differentials incurred by providers (in terms of excess manpower & estate costs)
3. Payment = Activity x Price + MFF
4. Additional complexity– Short stay – reduced tariffs– Long stay – excess bed day tariffs– Specialist top-ups – service specific uplifts
What is the scope of PbR?
1. General list of services not covered by tariff
– See lists of exclusions on next slide2. Separate tariffs published for:
– Admitted Patient Care - HRG spells• Elective• Short Stay Emergency (<2 days)• Non-Elective (>1 day)
– Outpatients - Attendances• First Attendance• Follow Up Attendance• Procedures (from 2006/07)
– Accident & Emergency – Attendances3. See lists of exclusions on next slide
What are PbR Exclusions?
General Exclusions
– List of general exclusionsAPC exclusions
– List of HRGsOutpatients exclusions
– List of SpecialtiesDrugs and appliance exclusions
– List of drugs and treatments
General PbR Exclusions
• Mental health services• Learning disabilities• Walk in Centres• Primary Care Services• Community services• Continuing/intermediate care• Respite care • Direct access radiology and
pathology • Ambulance services (≠ PTS)
• NSCAG commissioned specialised services
• Critical care - [apart from discrete Coronary Care Units]
• Renal dialysis• Chemotherapy• Radiotherapy• Rehabilitation in discrete
rehabilitation ward or unit (314)
• Private patients in NHS hospitals• Regular day/night attenders• Well babies
– All excluded services continue to be commissioned at locally agreed prices until such time as mandatory tariffs are introduced – Indicative tariff published for some areas
Admitted Patient Care Exclusions
D01 Lung Transplant
D17 Cystic Fibrosis
E01 Heart and Lung transplant
E02 Heart Transplant
F01 Oesophagus – Complex procedures
G01 Liver Transplant
G21 Pancreas – Complex Procedures
H07 Primary or Revisional Shoulder, Elbow, or Ankle Replacements
J13-J18 Major Burn > 29% TBSA with/without Significant Graft Procedure
J19 Other Burn with inhalation injury
J22 Other Burn with 1 significant graft procedures
J23-J25 Other Burn with multiple significant graft procedures
J28 Other Burn without significant graft procedures
L01 Kidney Transplant
P02 Cystic Fibrosis
R03 Decompression and Effusion for Degenerative Spinal Disorders
R07 Spinal cord injury with fusion or decompression
R10 Surgery for Scoliosis or Other Spinal Deformity
S09 Bone Marrow Graft
*98 Chemotherapy
Out Patient Exclusions
102 Transplantation Surgery
141 Restorative Dentistry
142 Paediatric Dentistry
150 Neurosurgery
170 Cardiothoracic Surgery
172 Cardiac Surgery
173 Thoracic Surgery
174 Cardiothoracic Transplantation
180 Accident and Emergency
305 Clinical Pharmacology
308 Bone Marrow Transplantation
309 Haemophilia
310 Audiological Medicine
311 Clinical Genetics
314 Rehabilitation
315 Palliative Medicine
316 Clinical Immunology
317 Allergy
319 Respite Care
330 Dermatology
350 Infectious Diseases
352 Tropical Medicine
361 Nephrology
400 Neurology
421 Paediatric Neurology
422 Neonatology
450 Dental Medicine Specialties
560 Midwife Episodes
822 Chemical Pathology
823 Haematology
824 Anti Coagulation Clinics
901 Occupational Medicine
982 Spinal Injuries
984-6 Cystic Fibrosis
987 HIV / AIDS
990 Family Planning Clinics
Drugs and Devices Exclusions
Drugs
AIDS/HIV antiretroviralsAntifungalsAntifibrinolytic drugs/ haemostatics blood productsBetaineCytokine InhibitorsDrugs affecting bone metabolismDrugs affecting the immune responseDrugs used in metabolic disordersDrugs used in neutropeniaGrowth hormone and growth hormone receptor antagonistsHyperuricaemia associated with cytotoxic drugsImmunomodulating drugsIntravenous/subcutaneous human normal immunoglobulinsSomatostatin analoguesTorsion Dystonias and other involuntary movementsVasodilator Antihypertensive drugs/ Primary Pulmonary Hypertension drugsViral Hepatitis (B & C) and Respiratory Syncytial VirusAllergen ImmunotherapyOcular diagnostic and peri-operative preparations and photodynamic treatment
Drugs and Devices Exclusions
Devices
Aortic stentsAneurysm coilsBespoke orthopaedic prosthesesBone anchored hearing aids (BAHA)Carotid, iliac and renal stentsCPAP/BiPAPDeep brain, vagal, sacral and spinal cord stimulatorsGliadel wafersImplantable defibrillators (ICD)Cardiac Resynchronisation Therapy (CRT)ICD with CRT capabilityIIlizarov framesInsulin pumps and pump consumablesIntrathecal drug delivery pumpsImplantable loop recorders3 dimensional navigation system mapping cathetersOccluder septal devices
Drugs and Devices Exclusions
Procedures/other:
Cleft lip and palateDynamic graciloplastyEndoprosthetic replacement for benign bone tumoursGastric bandingHead and neck cancer reconstructive surgeryPDT for wet Age Related Macular DegenerationPelvic reconstruction
A&E Tariff Calculation
Payment
High Cost
Standard
=
depends on
Minor
A&ETariff
V01, V02V03, V04
V07, V08V100MCV100MI
V05, V06and DOA
OP Tariff Calculation
PaymentAdult Tariff
Children’s Tariff
First Attendance
Adult FA Tariff
Follow Up Attendance
Adult FU Tariff
= OR
Child FA Tariff
Child FU Tariff
depends on
Procedure Tariff
OR
Eight Procedures
OP Procedure Tariffs
Procedure OPCS 4.3 CodesColposcopy P27.3, Q55.4Hysteroscopy Q18.1,Q18.8, Q18.9Flexible Sigmoidoscopy H25.1, H25.8, H25.9Rigid Sigmoidoscopy H28.1, H28.8, H28.9Fine needle biopsy of breast B37.1, B32.1, B32.3Needle biopsy of prostate M70.1, M70.2, M70.3Laser Destruction of Lesion of Skin S09.1, S09.2Subcutaneous injection X38.1, X38.2, X38.3, X38.4, X38.5,
X38.6, X38.7,X38.8, X38.9
APC Tariff Calculation
Payment HRG TariffEmergency Short Stay Adjustment
Specialised /Children’s Adjustment
Long Stay Adjustment
Elective EL TariffNot
applicableTariff x
Specialised or
Children’s Supplement
%
LOS > trim[EL]:x days @ HRG Bedday Rate
Non Elective
NEL TariffLOS > trim[NEL]:
y days @ HRG Bedday Rate
= +x +
depends on and where applicable
Tariff [alos] 50% [2] 35% [3-4] 20% [5+]
What does it mean for commissioning?
1. Service level agreements are in the form of cost and volume contracts based on planned activity levels – now using the new standard NHS contract
2. Contract payments (made monthly ‘on account’) are subsequently adjusted (initially quarterly but now increasingly monthly) in order to reflect the volume and case-mix of treatments actually delivered
3. This calculation is increasingly being delivered through data submitted to the National Care Records Service (NCRS) - Secondary Uses Service (SUS). Single authoritative source from 2009/10.
What are the checks and balances?
1. Who Pays? - Establishing the Responsible Commissioner (from 2005/06 - revised Oct 2007)
2. PbR Code of Conduct (since 2005/06 - revised Feb 2008) – sets out expected behaviours of providers & commissioners
3. Clinical Coding Assurance (from 2007/08) – Audit Commission’s continuing targeted review of providers’ clinical coding standards
4. New Standard NHS Contract (from 2008/09) – mandates a consistent set of (legally enforceable) commissioning rules applicable to all providers
What does the future hold for PbR?
1. Large scale public consultation during Spring 2007 on the ‘Options for the Future of PbR’
2. Conclusions drawn:– Confirmed introduction of HRG4 tariffs from 2009/10– Established extensive network of PbR development
sites including: • Mental Health & Ambulance• Cardiac examples
3. Next Steps….HRG4
Features of HRG4
1. Updated procedure codes (OPCSv4.3, 4.4, 4.5…)
2. Improved procedure hierarchy
3. Introduction of diagnosis hierarchy (for non procedure driven HRGs)
4. Introduction of paediatric age splits
5. Improved grouper logic
6. Greater granularity and specificity
7. Better able to differentiate true resource variation
Impact on Chapter E
1. 72% more HRGs across two sub chapters– EA – Cardiac Procedures (46 from 14)
• Grouping based primarily on procedure – but also influenced by diagnosis
• No age splits or ccs– EB – Cardiac disorders (16 from 22)
• Grouping driven by primary diagnosis – removal of age 70 split
• Different levels of ccs dependent upon subsequent diagnoses
2. 98% of activity contained within new sub chapters
HRG4 Examples
Sub Chapter EAOPCS = K652 Catheterisation of right side of heart NEC
HRG35 = E14 Cardiac Catheterisation and Angiography without complications
HRG4 = EA36Z Catheter 19 years and over
Sub Chapter EBOPCS = R073 Other chest pain
HRG35 = E36 Chest Pain <70 w/o cc
HRG4 = EB01Z Non interventional acquired cardiac conditions 19 years and over
Sub Chapter EBOPCS = I210 Acute transmural myocardial infarction of anterior wall
HRG35 = E12 Acute Myocardial Infarction w/o cc
HRG4 = EB10Z Actual or Suspected Myocardial Infarction
Sources of further information
1. Department of Health www.dh.gov.uk/pbr– PbR Homepage– Costing Guidance– Reference Costs Collection
2. Connecting for Health– Clinical Interventions Coding systems (OPCS)– Summary Care Record Service (CRS)
3. Information Centre– Currencies (HRGs)– Secondary Uses Service (SUS)
4. Audit Commission