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COVID-19 – guidance on NHS contracting and payment arrangements

Details

NHS England/NHS Improvement have issued guidance on arrangements for contracting and payment, both within the NHS and with independent sector providers, during the COVID-19 pandemic. The guidance follows on from the letter sent to NHS bodies by Sir Simon Stevens and Amanda Pritchard on 17 March. The intention of the guidance is to provide certainty that payments for services under the NHS standard contract will continue to be paid during a designated period of April to July 2020; and to enable staff focus on the pandemic response by minimising the burden of formal contract documentation and contract management. 

Arrangements between NHS commissioners and NHS trusts/foundation trusts

The guidance applies to the period from April to July 2020, with further guidance on contracting and payment post- 31 July 2020 to be issued ‘in due course’.

NHSE/I indicate that they will issue further guidance to cover specific arrangements for providers of particular services.

Contracting

Instead of requiring commissioners and trusts/foundation trusts to sign contracts for 2020/21, the NHS National Contract 2020/21 will apply from 1 April 2020, and variations to this are not permitted. Accordingly, the national deadline of 27 March for signing contracts, and mediation/arbitration arrangements for unsigned contracts, no longer applies.

If commissioners and trusts have already agreed a new contract/financial deal for 2020/21, this should not apply from April – July 2020. If a multi-year contract is in place, payment will nonetheless be made on a block basis (see below) rather than in accordance with that contract.

Payments

In accordance with the Stevens/Pritchard letter, payments will be made on a monthly block basis from April to July 2020. NHSE/I are notifying providers of the specific amounts to be paid. Further detailed guidance on making block payments and the methodology for calculating these was published on 13 April 2020. 

The operation of the Commissioning for Quality and Innovation Framework (CQUIN) is suspended from April to July 2020, with block payments deemed to include CQUIN payments. This means that providers need not carry out CQUIN audits or submit CQUIN performance data.

High cost drugs and devices (HCCD)

In respect of HCCD payments:

  • CCGs – payments will be included within block payments
  • NHSE specialised services – payments to be included in the block payment, with top-ups being made ‘as required’

Contract management

In respect of contract management processes, the guidance confirms:

  • Timely/complete/accurate compliance with COVID-19 reporting is expected
  • Other national reporting requirements should also be complied with unless otherwise notified, albeit further guidance will be issued on which requirements should be prioritised
  • Trusts must do all they can to comply with national service requirements, but commissioners must recognise that it may not be possible to achieve these during the pandemic period
  • Contractual sanctions are suspended until further notice – commissioners must not withhold funding on this basis
  • Normal contract management meetings and processes should be suspended. Commissioners should instead focus on supporting trust responses to COVID-19 and relax non-business critical local reporting requirements

Departure from the 2020/21 national tariff

While the new national tariff will be released, as the block payments approach departs from this, commissioners will need to use a simple template document to confirm these arrangements.

Arrangements with non-NHS providers (other than primary care)

Independent sector hospitals

The guidance takes into account the national agreement, running for 14 weeks from 23 March 2020, with independent sector (IS) acute hospitals to contribute to the COVID-19 response. In light of this, other CCG or NHS England contracts/any sub-contracts with NHS providers, will be set aside.

The guidance provides further details of how these contracts should be reactivated once the national agreement has ended.

Other non-NHS providers commissioned under the NHS Standard Contract

The guidance notes that different non-NHS providers will be affected in different ways by the pandemic. Some will have a direct role to play in the response, while others will either change their services, or need to put these on hold. In respect of these provider bodies, not covered by national prices, the guidance directs that written contracts for 2020/21 must be concluded as soon as possible with commissioners exercising local discretion on terms, based on the following principles:

  • Contracts must be on the NHS Standard Contract 2020/21 but should not be complex, for example the shorter form may be appropriate
  • A block payment approach is not compulsory, but may be appropriate
  • If the provider is providing COVID-19 essential services, a block payment approach based on historic income should be agreed. Examples of these services include community nursing, end of life care, mental health services, and patient transport
  • If the provider is contracted on an any qualified provider basis, and their activity is liable to be reduced during the pandemic, an appropriate payment basis is likely to be per activity
  • Contracts should be for core services, with separate arrangements made for additional costs incurred as a result of COVID-19
  • Overriding all of this, it is essential that contracting processes do not impede or delay the COVID-19 response

If we can be of any assistance in guiding you through this difficult and unprecedented period of uncertainty please contact us to discuss further.

For further updates and other articles discussing the impact of the coronavirus please view our coronavirus hub.

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