EY NHS National Tariff 2017/19 briefing

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2017/18 to 2018/19
National Tariff
NHS Sector Briefing
December 2016

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Page
Section 1 Executive summary 3
Section 2 Tariff design 13
Section 3 Tariff scope 23
Section 3.1 High-cost drugs and devices 28
Section 3.2 Best practice tariffs 31
Section 3.3 Innovation and technology tariff 39
Section 4 References and further reading 44
Contents
Disclaimer: The information in this pack is intended to
provide only a general outline of the subjects covered. It
should not be regarded as comprehensive or sufficient for
making decisions, nor should it be used in place of
professional advice. Accordingly, Ernst & Young LLP
accepts no responsibility for loss arising from any action
taken or not taken by anyone using this pack.
1

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Key Contacts
2017/19 National Tariff Payment System briefing 2
Pete
Shanahan
Pete is a former NHS Director of Finance and Chief
Executive and is now Executive Director in EY’s
Health Advisory practice.
The former Finance Director and Interim Chief
Executive of West Midlands Strategic Health
Authority, Pete is a qualified accountant with a
degree in Economics. He has been a professional
advisor to a number of national bodies, including the
Department of Health and Monitor.
George
Agathangelou
George is a Director in EY’s Economic Advisory
practice, leading on Health Economics. George is
highly knowledgeable and experienced in healthcare
pricing, spearheading our work highlighting the
impact of inaccurate reference cost submissions on
the funding of specialist providers.
George has led projects with NHS England, Monitor
and local health and social care economies on
innovative payment models, such as Gain and Loss
Sharing, Capitation and Three-Part Payment.
Bill
Shields
Bill has over 28 years’ experience in NHS finance
across providers and commissioners. He has
extensive experience in local healthcare pricing and
specialist commissioning.
As a leader in the NHS, Bill has held CEO and CFO
roles in a large teaching trust and Strategic Health
Authority, and is now Executive Director in EY’s
Health Advisory practice.
Matt
Knight
Matt is a Senior Consultant in EY’s Health Advisory
practice. A qualified accountant with a degree in
Economics, Matt has extensive experience working in
healthcare costing and pricing.
The lead author of this briefing, Matt has delivered
workshops with NHS providers and commissioners
supporting the introduction of innovative payment
models in conjunction with NHS England and Monitor.
Tel: + 44 7836 239 725
Email: pshanahan@uk.ey.com
Tel: + 44 7769 710 906
Email: bshields@uk.ey.com
Tel: + 44 7717 618 746
Email: gagathangelou@uk.ey.com
Tel: + 44 7552 270 575
Email: mknight@uk.ey.com
Executive Director
Director
Executive Director
Senior Consultant

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Section 1
Executive summary

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Introduction and context
On 2 August 2016, NHS Improvement (NHSI) and NHS England (NHSE) launched their policy proposals for the 2017/18 and 2018/19 National Tariff Payment
System (2017/19 NTPS) and associated engagement round. This allowed providers and commissioners to feed back their views on the proposals and their
potential impact prior to the final tariff being released later in the year. The statutory engagement was launched on 8 November 2016 following NHSI’s release
of feedback from the sector and corresponding revisions to the proposed tariff.
The proposed changes to the national tariff are intended to set desirable incentives for the health system as a whole, allowing both providers and
commissioners to pursue their respective objectives in such a way that is sustainable for the wider health economy. The proposed tariff is signalling that care
provision should take place in the most appropriate setting, avoiding the attraction of unnecessary costs whilst incentivising best practice and clinical quality.
NHSI and NHSE have made it clear that they are aiming for the NTPS to be cost-reflective in order to support the effective allocation of healthcare resources.
The move to phase 3 of HRG version 4+ as the currency for admitted patient care activity is intended to align the prices trusts receive for activity with the costs
of providing that care. The additional layers of granularity for complications and comorbidities ensure that provision of more complex and costly care attracts a
suitably increased price, ensuring the sustainability of more specialised services for providers. As such, providers with a less complex casemix may find the
proposed tariff design places an increased pressure on income as corresponding prices decrease.
Commissioning budgets will change to reflect these shifts, with specialised commissioning seeing the largest increases in funding in the near future. However,
commissioners would be vigilant to ensure that any changes in coding practice encouraged by these changes reflect an improvement in data quality and
completeness and are an accurate reflection of patient acuity rather than simply a lever for income maximisation for providers. NHSI has signalled that it does
not believe systematic ‘up-coding’ of activity by providers will be a significant risk1. However, NHSI will be responsive to any evidence it is presented and make
appropriate changes to policy thereafter.
The implementation of a two-year tariff will deliver the sector a degree of stability up until April 2019. This will allow both providers and commissioners an
opportunity to formulate robust two-year financial plans without relying upon assumptions for tariff income in 2018/19. Providers will be better able to plan for
their efficiency requirements, with commissioners and trusts both able to substantially agree contracts for the full two year period. However, both providers
and commissioners will need to understand the potential impact on their finances if the planning assumptions for inflation are materially different in the second
year of the tariff and how they might address this.
Purpose of this document
This briefing seeks to summarise the proposed changes to the national tariff and highlight the behaviours that the tariff is incentivising. It also supports
providers and commissioners to identify actions they might take to ensure that their respective financial positions are strengthened whilst maintaining the
overall stability of the local healthcare system and the wellbeing of patients.
This document is not intended to replace trusts’ or CCGs’ detailed reviews of the full tariff proposals, impact assessments and any other supporting analysis or
information.
Introduction and purpose of this document
1NHS Improvement & NHS England — 2017/18 and 2018/19 National Tariff Payment System: A consultation notice, p17

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We have presented some indicative analyses and insights of the implications of the proposed tariff, using NHSI’s own analysis where stated. Further detail is
included in subsequent sections of this briefing.
Implications of the proposed tariff
Theme Topic Current Proposed Comment and possible action
NHSI assessment of the
overall impact of the
proposals on provider
revenue and
commissioner spending
in 2017/18
Source: NHS Improvement -
Impact assessment: National
Tariff Payment System
Consultation Notice, pp7, 50
All NHS providers: For 2017/18, 70% of providers in
NHSI’s analysis will see revenues change by less than ±1%
and 93% will see revenues change by less than ±2%
The proposed tariff seeks to ensure that care is delivered in the most
appropriate way and by the most appropriate providers. Most
providers will see their income increase or decrease by up to 1%, with
a smaller number seeing greater changes.
Analysis of the potential revenue impacts of the proposed tariff —
filtering clinical activity data through the engagement grouper that
NHS Digital have made available — would allow providers to identify
the most significant areas of risk. For providers who use Service Line
Reporting (SLR) as a management tool, it is important that service
lines understand the impact of the 2017/19 tariff on their positions
as distinct from any other cost reduction or income growth
initiatives.
Working together, providers and commissioners can ensure that care
is being delivered in the right place and unnecessary costs are
avoided. The impact of changes to the underlying tariff on any
innovative payment approaches — e.g. plans to move to capitated
budgets or gain-share arrangements — could also be considered.
Acute trusts: 69% of providers will see revenues change
by ±1% and 95% will see revenues change by ±2%
Non-acute providers and teaching trusts: 71% of
providers will see revenues change by ±1% and 88% will
see revenues change by ±2%
Specialist trusts: 39% of providers will see revenues
change by ±1% and 61% will see revenues change by ±2%.
33% of providers will see revenues change by more than
±2.5%
Commissioners: CCG spending will increase by circa 0.3%
of their funding allocations. NHS England spending will
increase by around 2.9% of its nationally-priced direct
commissioning spend
Move from HRG 4 to
HRG4+ (phase 3) for
admitted patient care
Source: NHS Improvement -
Annex B1: 2017/18 and
2018/19 National Tariff:
currencies and prices, sheet
1a
Number of HRG roots in
682 867 The number of HRGs is going to almost double, with much of this
increase providing greater granularity to reflect complexity of care.
The difference in price from the lowest to the highest in a root HRG
will change significantly, increasing for 307 HRG roots and
decreasing for 86, where the HRG root exists in both HRG4 and 4+.
Review of the engagement grouper will allow providers to understand
both the quality of their depth of coding as well as how their income
may relate to their cost base given their existing acuity casemix.
Total number of HRGs for
1,283 2,303
Average % tariff uplift for
complexity
Non-elective and combined
elective/daycase tariffs
87% 164%

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Implications of the proposed tariff (cont’d)
Top-up payments for
specialised
commissioning
Source: NHS Improvement &
NHS England — 2017/18 and
2018/19 National Tariff
Payment System: A
consultation notice, pp68-70
and
NHS Improvement - Impact
assessment: 2017/18 and
Payment System consultation
notice, pp26-39
Total spend for specialised
services top-ups
£303m 2017/18:
£414m*
2018/19:
£417m*
By
2021/22:
£478m
NHSI anticipates that funding for specialised services top-ups will
need to increase to around £478m per annum. This will be phased in
over four tariff periods to minimise disruption. This would ensure that
top-ups are applied using the most up-to-date definitions of
Prescribed Specialised Services (PSS).
It is intended that this increase will be offset by corresponding
decreases in the base mandatory tariff prices. NHS spend, therefore,
remains unchanged with respect to these services overall.
Working with the central bodies, commissioners can ensure changes
in budget are reflective of changes in cost. Commissioners would
continue to commission services from the most clinically appropriate
provider.
*Differences between 17/18 and 18/19 top-up amounts are driven by
changes in underlying prices rather than the proposed top-up rates, which
remain identical between the two years
Specialised services top-
ups for providers
N/A Increased
revenue for
specialist
providers by
an average
of 0.5%
The move to defining specialised services under the PSS list will see
top-ups introduced for four new areas: cancer, respiratory, cardiac
and other. Changes to the funding formula will have the greatest
impact on specialist trusts.
The desire to make payments more cost-reflective will see three
cardiac specialist providers have the greatest increases in top-up
income of all providers. However, six providers of paediatric and/or
orthopaedic services will see the greatest reductions in top-up
revenue as a result of these changes.
Outpatient tariff
NHS England — 2017/18 and
Payment System: A
Consultant-led outpatient
follow-ups (OPFU)
Fixed 10%
transfer of
follow-up
costs into
first
attendances
Variable
transfer of
follow-up
costs, up to
a maximum
of 30%
NHSI is keen to improve system throughput by increasing outpatient
first attendances and disincentivise using this capacity for follow-ups
by increasing the price differential between them.
The current approach of transferring 10% of follow-up costs into first
attendances will be changed, with the transfer increasing to 30% for
surgical specialties and 20% for medical specialties. The transfer will
remain unchanged for paediatrics, oncology and haematology.

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Changes to the
maternity pathway
payment
NHS England — National tariff
proposals for 2017/18 and
2018/19, p17
and
NHS Improvement & NHS
England — 2017/18 and
Payment System: A
Casemix assumptions for
antenatal care*
Following their analysis of the latest Maternity Dataset in 2015, NHSI
propose revising the casemix assumptions underpinning the
antenatal care phase of the maternity pathway payment.
This will increase the price attracted by the intermediate and
intensive levels of care and reduce the standard price, whilst
maintaining the overall quantum of funding for antenatal care.
This approach will ensure that providers of more complex antenatal
pathways that incur significantly greater cost will be remunerated
with an increased price. This will encourage activity of a higher acuity
to be provided in a more specialised setting.
Evaluation of this change will enable lead providers to determine the
anticipated impact on casemix for themselves and other providers in
the pathway. Lead providers could then identify whether the change
in income associated with this will affect the ability of others in the
pathway to deliver this activity or whether pathway changes are
required in light of income pressures or growth.
Standard:
Intermediate:
Intensive:
65.5%
27.3%
7.1%
50.0%
38.7%
11.3%
*Casemixes may not add to 100% due to
rounding
Changes to the allocation of
HRGs in the delivery
pathway
N/A Eight
additional
HRGs
allocated to
the ‘With CC’
category
NHSI has allocated eight additional delivery pathway HRGs to the
‘With CC’ category. This was based on feedback from the sector
concerning caesarean section deliveries and postpartum
interventions being mapped to the lower payment level and
consequently underfunded.
This will mean that, since more deliveries will be mapped to the
higher level, less cost is attributed to the standard level. Provider
assessments of casemix would allow any risks within the delivery
pathway to be identified and mitigated in conjunction with
stakeholders to control costs of standard deliveries.

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New best practice
tariffs (BPTs)
Source:
assessment: National Tariff
Payment System Consultation
Notice, pp30-37
and
NHS Improvement — Annex
B1: 2017/18 and 208/19
National Tariff: currencies and
prices, sheet 6a
Datasets supporting new and
modified BPTs
N/A N/A Providers are already collecting data that will support all new and
modified BPTs, so may wish to ensure that these processes are
robust and the required changes reflected in them. The sector has
fed back to NHSI that there is likely to be increased administrative
burden associated with complying with new BPTs and increased
target rates in existing BPTs.
Commissioners will need to understand how they will analyse and
challenge BPT data to ensure BPTs are delivering their intended
benefits.
Chronic obstructive
pulmonary disease (COPD)
Timely access to specialist
input and discharge bundle
N/A Circa 10.6%
premium
applied to
HRG base
tariff
A mandatory BPT will be implemented, where providers must
demonstrate that 60% of primary diagnosis COPD admissions receive
specialist input within 24 hours of admission and receive a discharge
bundle prior to discharge to receive the tariff.
The move to continuous data collection in 2017 following the
development of a data collection tool by the Royal College of
Physicians (see ‘Further Reading’ section) is intended to minimise
any additional administrative burden on providers.
Non-ST segment elevation
myocardial infarction
(NSTEMI)
Timely access to coronary
angiography
N/A Circa 10.7%
premium
applied to
HRG base
tariff
Providers must demonstrate that 60% of NSTEMI admissions receive
coronary angioplasty within 72 hours of admission. This will include
transfers from other hospitals, with the clock beginning at the time of
the first admission.
Having to measure and validate patients’ time to angiography
following transfer may present administrative challenges initially,
especially where issues with the prior admitting hospital being out of
the control of the provider ultimately delivering the BPT criteria.
The National Institute for Cardiovascular Outcomes Research
(NICOR) will publish guidance to support validation of the BPT.

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We have presented some indicative analyses and insights of the implications of the proposed tariff, using NHI’s own analysis where stated. Further detail is
Amendments to existing
BPTs
Source:
assessment: National Tariff
Payment System Consultation
Notice, pp30-37
and
NHS Improvement — Annex
B1: 2017/18 and 208/19
National Tariff: currencies and
prices, sheet 6a
New daycase procedures — Circa 10.7%
premium
applied to
HRG base
tariff of new
procedures
In line with the British Association of Day Surgery (BADS) guidelines,
an additional 19 procedures have been added to the BPT daycase
procedures list. For all nineteen procedures, trusts will be required to
deliver target rates that are greater than the current average rates.
Trusts will need to understand the potential impact on bed utilisation
of increasing BADS compliance and agree with their commissioners
what should be done with the additional available capacity.
Changes to existing
daycase BPT achievement
rates —
Two additional procedures — those to manage female incontinence
and tympanoplasty — have had their target daycase rates increased
before trusts can claim BPTs.
Changes to the base tariffs in these — and new (see above) —
procedures could mean that trusts not making significant inroads to
delivering increased daycase provision in the BPT procedures could
face increasing cost pressures.
Female incontinence:
Tympanoplasty:
45%
50%
60%
65%
Fragility hip fracture —
replacement of three
performance measures
Three
measures
ceased
Three new
measures
proposed
The joint admission protocol and multidisciplinary team (MDT)
working measures are to be removed as measures for this BPT as
they are currently near 100% completion. The post-operative
abbreviated mental test is being removed from the BPT due to its
results being similar to the pre-operative test and it having no effect
on the BPT achievement.
These measures will be replaced the following three:
1. Nutritional assessment during admission
2. Delirium assessment during admission
3. Physiotherapy assessment the day following surgery
Trusts will need to be able to demonstrate that they are able to meet
these new measures and record them robustly to receive the BPT.

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We have presented some indicative analyses and insights of the implications of the proposed tariff, using NHS Improvement’s own analysis where stated.
Further detail is included in subsequent sections of this briefing.
BPTs (cont’d)
Primary hip & knee
replacement —
Prior to the summer engagement, there was a proposal to increase
the compliance rate for the submission of Patient Reported Outcome
Measures (PROMs) to the NJR from 85% to 95%. Feedback from the
sector highlighted concerns about validation of compliance rates,
variations in complexity of cases between trusts and the ability to
influence sub-contractor delivery of the target. Consequently, no
change to the PROMs capture target is being proposed.
Previously, the significance criterion was to be set at 95% — more
providers would fall outside the 95% confidence interval for a given
sample of health gain scores and be eligible for the BPT. However,
this will remain at the 99.8% level for a single year but 95% for two
consecutive years. This would potentially allow for a more gradual
move towards the more stringent confidence intervals.
National Joint Registry
(NJR) compliance rate:
85% 85%
Significance criteria for
health gain:
99.8% Single year:
99.8%
Two years:
95%
Same day emergency care
(SDEC)
N/A Addition of
seven
clinical
scenarios
Seven new conditions have been proposed for the SDEC BPT. These
would enable more patients to be treated in an ambulatory setting
and free up bed capacity for more high-need patients. These
scenarios are:
1. Abnormal liver function
2. Acutely hot painful joint
3. Chronic indwelling catheter-
related problems
4. Gastroenteritis
5. Transient ischemic attack
(TIA)
6. Urinary tract infection (UTI)
7. Upper gastrointestinal (GI)
haemorrhage
Trusts and CCGs may assess the costs of the additional ambulatory
care pathways required against the income/funding required for the
delivery of this BPT and agree how the additional bed capacity will be
used for more acutely unwell patients.

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BPTs (cont’d)
Acute stroke care —
revision of criteria
Revision to two of the three
existing criteria
The acute stroke care BPT has been modified to more closely align
with NHSE’s view of best practice — which is derived from NICE
guidance. The changes also more accurately reflect operational
reality and support robust measurement of performance against the
criteria.
The revised criteria seek to ensure that appropriate medical staff
review acute stroke patients’ care and brain imaging in a timely
manner.
Removal of BPTs Interventional radiology
procedures
£1,353 per
spell
Nil – price
incorporated
into HRG
base tariffs
The interventional radiology (IR) BPT will be removed from the
2017/19 NTPS as its purpose is now served by the structure of the
HRG4+ currency. The summer engagement raised concerns that
removal of the BPT could cause providers to revert to older, more
invasive and more costly surgical procedures. This could include such
areas as angiography, stenting for diabetic foot disease and uterine
artery embolism.
In these cases, commissioners would need to ensure that providers
are always putting the experience of the patient first whilst
supporting any pathway changes that could reduce unnecessary
costs being incurred to more closely align them with HRG4+ prices
absent of the BPT. Commissioners may need to assess which of their
providers undertake these procedures if they are unable to carry
them out via financially sustainable means without the BPT.
Providers might benefit from benchmarking their costs in HRGs with
interventional radiological components to understand the drivers of
increased costs. Reverting to older, more highly invasive procedures
is likely to drive additional unnecessary cost into the system,
contrary to the intentions of the whole 2017/19 NTPS. CCGs and
trusts may explore submitting local pricing arrangements to allow for
a phased transition to using the national tariff for IR procedures

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Innovation and
technology tariff (ITT)
Scope of ITT N/A Six
innovations
to be funded
by the ITT
The innovation and technology tariff seeks to accelerate the adoption
of new technologies, without requiring changes to the underlying
tariff.
To begin with the ITT will cover six separate innovations, typically
being paid for by local pricing agreements and funded by NHS
England. These will be:
1. Acute angle episiotomy
scissors to reduce obstetric
anal sphincter injuries
(OASIS)
2. Non-injectable arterial
connector to reduce bacterial
contamination and the
accidental administration of
medication
3. Ventilator-associated
pneumonia (VAP) prevention
systems
4. Web-based application for
the self-management of
COPD
5. Frozen faecal microbiota
transplantation for recurrent
Clostridium difficile infection
rates
6. Prostatic urethral lift
systems to treat lower
urinary tract symptoms of
benign prostatic hyperplasia
as a daycase
Funding N/A Estimation
not provided
by NHSI
Commissioner funding of the ITTs will come from NHS England rather
than a top-slice of existing national tariff prices.
Commissioners would undoubtedly be eager to work with their
providers to understand the degree to which the above procedures
are currently undertaken, and the quantum of costs that might be
removed in the current and future tariff periods.
Providers would need to undertake cost-benefit analyses to
determine which of the ITTs to uptake, factoring in any costs
associated with manual reporting of delivery to commissioners.

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Section 2
Tariff design

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Background to the new tariff proposals
The national tariff for 2016/17 was based upon reference cost collections for 2011/12 to determine prices under HRG4. In their consultation for the 2016/17
tariff, Monitor and NHSE had proposed moving to HRG4+ for admitted patient care (APC) activity. However, responses to the 2015 summer consultation
highlighted that whilst over 75% of providers who responded supported the introduction of HRG4+, 25% of all providers and commissioners surveyed felt unable
to model the impact of the new currency with the available data and time constraints. A decision was therefore taken to delay the introduction of HRG4+ to the
2017/18 financial year.
In the 2016 summer engagement round, 53% of respondents supported the introduction of the tariff for two-years, although concerns were highlighted with
respect to possible errors in underpinning reference cost assumptions and inflation projections being bound into the tariff for two years. Furthermore, concerns
around the unknown impact of the United Kingdom’s withdrawal from the European Union were raised. It was suggested by the sector that a formulaic approach
be taken to setting prices in 2018/19, allowing for parameters to be updated closer to the time. However, NHSI confirmed that existing legislation requires
specific prices to be consulted on and set.
Approach to determining prices in 2017/18 and 2018/192
The proposed prices are based on 2014/15 reference costs (uplifted to 16/17 levels) and Hospital Episode Statistics (HES) activity data from the same year.
NHSI have applied these to the HRG4+ (phase 3) currency. Manual adjustments to the pricing model have been made to arrive at prices for 2017/18. These are
rolled forward for the prevailing efficiency requirement, Clinical Negligence Scheme for Trusts premia and inflation to give prices for 2018/19.
It should be noted that the final prices for 2018/19 will be established in advance of 1 April 2017 — there is no vehicle to allow the method for 2018/19 prices
to be agreed through statutory consultation but publish final prices later, once inflation parameters are more easily estimated. As such, there will be no changes
to the scope of the national tariff or development of any aspects of tariff policies in the lead up to 2018/19. The next planned tariff consultation will be for the
2019/20 draft prices.
Introduction of a two-year tariff
Set prices to 2016/17 levels (current year)
2014/15
reference
costs
Determine price
relativities
Uplift using
15/16 and
16/17efficiency
requirement,
cost uplift and
CNST
Adjust
relativities
using expert
advice
Adjust
subchapters to
manage
volatility
Apply cost base
adjustment
2017/18
price
levels
Adjust using
2017/18
efficiency,
inflation and
CNST forecasts
2018/19
price
levels
Adjust using
2018/19
efficiency,
inflation and
CNST forecasts
2NHS Improvement & NHS England — 2017/18 and 2018/19 National Tariff Payment System: A consultation notice, pp123-128. This includes significantly more detail on the derivation of prices for
2017/19

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Impact of the two-year tariff
Having implemented a tariff up to and including 2018/19, NHSI and NHSE hope that the certainty associated with national prices over the two years will
outweigh any potential disadvantages associated with any unanticipated quirks the currency design (HRG4+) or the prevailing parameters based on current
estimates, such as inflation.
The certainty provided by such an approach is intended to allow NHS providers and commissioners to produce effective financial and operational plans at an
early stage and support stability, long-term planning and investment, offsetting the risks brought about by a changing external environment to which the tariff
cannot respond immediately.
Providers and commissioners will need to agree contracts covering the two years to March 2019 by the end of December 2016. The second year of planning will
be less reliant upon any assumptions on planning parameters such as inflation or the efficiency requirement, that will affect tariff income. Therefore, providers
and commissioners can more effectively plan for the immediate future, but will need to consider how they will build in contractual mechanisms — for example,
risk-share agreements — should these planning assumptions be materially different to reality. A more intense round of planning for two years in the lead up to
April 2017 may be more costly in the immediate term, but this might be outweighed by a significantly lesser requirement when planning for 2018/19,
particularly with contracts being substantially agreed in advance.
Introduction of a two-year tariff (cont’d)

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Basis of NHSI assessments
Along with its statutory consultation notice, NHSI has also provided its analyses of the potential impact of its 2017/19 NTPS proposals.3 This is a useful
starting point for providers and commissioners to begin to understand the possible impact on their organisation by being able to see the financial implications of
tariff changes on an actual quantum of activity.
However, NHSI have made it clear that their approach to this analysis has been to use the 2014/15 Hospital Episode Statistics (HES) data upon which the
2017/19 NTPS is based, and that the activity level is assumed to be constant.4 In actuality, many trusts and CCGs may have seen significant activity increases
since 2014/15, meaning that the impacts presented by NHSI may be understated for their particular organisation.
Likewise, NHSI have assumed that where the proposed HRG Grouper leads to a currency with a national tariff price, then this price is used. As such, it does not
assume any local pricing agreements are in place. Providers and commissioners will need to appraise any new or continuing local arrangements against the
tariff and ensure that these are submitted centrally in line with the prevailing mandated processes.
Impact on providers — 2017/18
NHSI has provided a view of the possible impact of its tariff proposals on different types of provider for the financial year 2017/18. These have been grouped
into acute (small, medium and large), specialist, teaching and non-acute. The charts on the following page show the anticipated distribution of the proposed
tariff’s impact on each type of provider’s revenues.
For the majority of providers, it is anticipated that the changes to tariff will cause a change in income of less than ±1%. Teaching and specialist trusts might
expect a higher likelihood of greater variation due to the changes to the underlying currency, with the distribution of income changes being slightly more
skewed to the positive side than the acute providers. Around 22% of specialist trusts could see income increase by more than 2%, reflecting the higher tariffs
and specialised services top-ups attracted by a more acute and complex casemix. Non-acute providers are highly clustered in the +0.0% to +0.5% bucket of
revenue change, with only a minority of providers (7%) expected to see incomes fall.
NHSI have split acute providers into small, medium and large groups in their analyses. Of small acutes, a third might expect revenues to fall from the new tariff,
but a small number (8%) could see revenues increase by over 2.5%. All large acute providers in NHSI’s analysis would see incomes change by ±2%, with over half
of these (62%) expecting revenue increases from the proposed tariff.
NHSI’s analysis at HRG subchapter level can help providers identify which areas will likely see income pressure or opportunity. A summary of this analysis and
supporting commentary is provided later in this section.
NHSI assessment of tariff proposals
3NHS Improvement — Impact assessment: 2017/18 and 2018/19 National Tariff Payment System consultation notice, pp7, 19-26
4The core analyses in the Impact Assessment (and those shown here) use NHSI’s ‘central scenario’ which assumes nil price elasticity of activity — i.e. activity remains unchanging in the face of price
increases. A ‘high’ and ‘low’ scenario are analysed by NHSI — the ‘low scenario’ sees activity decrease by 0.2% for every 1% increase in prices, whilst the ‘high scenario’ sees activity increase by 0.2% for
every 1% increase in prices from 2016/17 levels. These analyses are presented in NHSI’s Impact assessment.

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NHSI assessment of tariff proposals (cont’d)
2017/19 National Tariff Payment System briefing
445
99
32 2
34
10
6
4
4
2 3
1
3
3
10
6
5
5
21
5
10
15
20
25
30
> 2.5%2.0% to
2.5%
1.5% to
2.0%
1.0% to
1.5%
0.5% to
1.0%
0.0% to
0.5%
-0.5% to
0.0%
-1.0% to
-0.5%
-1.5% to
-1.0%
-2.0% to
-1.5%
-2.5% to
-2.0%
<
-2.5%
Numberofproviders
← Decreased revenue Change in revenue Increased revenue →
Revenue impact — Acute providers
Acute - small Acute - medium Acute - large
17
3
11
3
12223
4
47
11
22
5
10
15
20
25
30
> 2.5%2.0% to
2.5%
1.5% to
2.0%
1.0% to
1.5%
0.5% to
1.0%
0.0% to
0.5%
-0.5% to
0.0%
-1.0% to
-0.5%
-1.5% to
-1.0%
-2.0% to
-1.5%
-2.5% to
-2.0%
<
-2.5%
Numberofproviders
Revenue impact — Teaching & specialist providers
Teaching Specialist
65
27
3
5
10
15
20
25
30
> 2.5%2.0% to
2.5%
1.5% to
2.0%
1.0% to
1.5%
0.5% to
1.0%
0.0% to
0.5%
-0.5% to
0.0%
-1.0% to
-0.5%
-1.5% to
-1.0%
-2.0% to
-1.5%
-2.5% to
-2.0%
<
-2.5%
Numberofproviders
Revenue impact — Non-acute providers
Non-acute
79% of acute providers could see
revenue change by less than ±1%
77% of teaching and specialist
providers could see revenue increase
Specialist orthopaedic trusts are likely to
see significant revenue decreases
Non-acute providers likely to see
smaller variations in income
Source: NHS Improvement — Impact assessment: 2017/18 and 2018/19 National Tariff Payment System consultation notice, pp24, 50

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Background to introducing HRG4+ (phase 3)
The last time the national tariff underwent a major currency redesign was in the 2009/10 national prices. This saw the introduction from HRG3.5 — in use since
2003/04 — to HRG4.
Monitor had proposed in its consultation for the 2016/17 tariff that prices be based on HRG4+ (version 3). However, responses from the sector indicated that,
whilst there was overwhelming support for the introduction of a more granular currency, a significant number felt unable to plan effectively under the new
currency. Therefore, Monitor postponed the introduction of HRG4+ (phase 3) until the 2017/18 prices to allow the sector sufficient time to prepare.
Rationale for deploying HRG4+ (phase 3)
In setting prices for 2017/18 to 2018/19, NHSI and NHSE are keen to ensure that the currency of the tariff was able to group patients into similar cost groups,
are based on the most recently available datasets and was clinically supported, whilst also minimising disruption to the sector.
NHSI’s analysis has demonstrated that HRG4+ (phase 3) better explains overall variations in patient-level costs5 — within HRGs and between providers for each
HRG — than HRG4+ (phase 2) and HRG4, and is more closely aligned to current clinical practice than HRG 3.5. With HRG4+ (phase 3) having been announced in
the consultation for 2016/17 prices and subsequently postponed until 2017/18, this has allowed the sector to better prepare for the impacts of the new
currency, and reduce the disruption its introduction might bring.
Tariff currency change — introduction of HRG4+ (phase 3)
5NHS Improvement & NHS England — 2017/18 and 2018/19 National Tariff Payment System: A consultation notice, pp16-17

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Primary differences between HRG4 and HRG4+ (phase 3)
Where HRG4 built upon the design of HRG3.5, HRG4+ (phase 3) also looks to more closely align the pricing currency to clinical activity and drivers of cost. The
most notable difference between HRG4 and HRG4+ is that the latter allows much greater granularity in the designation of activity, especially in relation to
acuity.
This is most evident in the HRG ‘split’, particularly with complications and comorbidities (CC). HRG4 typically gives a binary with/without CC tariff (sometimes
subdividing into ‘major’ or ‘minor’ CCs), whereas HRG4+ will give an appropriate array based on CC score, with prices increasing with this score. For example,
when considering HRG AA24 (brain tumours) — under HRG4, there are two splits, compared to six under HRG4+.
Clearly, there is increased scope for variation in the allocation of specific patients between the 2016/17 tariff (under HRG4) and the 2017/18 tariff (under
HRG4+). Not only are the HRG splits and their prices materially different under HRG4+ to align more closely to the level (and cost) of care provided, the
associated trimpoints are also different. This means that provider income within HRGs will be more sensitive to casemix and depth and quality of clinical coding.
HRG Name HRG Split
HRG4 Price* (£)
2015/16
HRG4+ (proposed)* (£)
2017/18
AA24: Brain Tumours or Cerebral
Cysts
A: … with CC 3,243
N/A
B: … without CC 2,045
C: … with CC Score 11+
N/A
6,242
D: … with CC Score 8-10 4.170
E: … with CC Score 6-7 3,333
F: … with CC Score 4-5 2,874
G: … with CC Score 2-3 2,333
H: … with CC Score 0-1 1,873
*Non-elective spell tariff
Source: Monitor & NHS England — 2016/17 National Prices and National Tariff Workbook, sheet 1
NHS Improvement & NHS England — Annex B1: 2017/18 and 2018/19 National Tariff: currencies and prices, sheet 1a
Tariff currency change — introduction of HRG4+ (phase 3) (cont’d)
59% difference
233% difference

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Gross impact of price changes on HRG subchapters 16/17 to 17/18
NHSI’s analysis6 shows the total national impact on healthcare spending of the proposed prices at the HRG subchapter level from 2016/17 to 2017/18 — again
assuming that activity is at 2014/15 levels and tariff compliance is 100%. This will provide a foundation for trusts and CCGs in understanding the main drivers
of the financial changes that are likely to arise as contracts are worked up. Where activity is concentrated in the subchapters with the greatest swings,
providers and commissioners will need to work together to mitigate any financial instability that may arise. Large price reductions may require providers to
demonstrate pathway changes and removal of unnecessary costs, or for commissioners to consider transferring services to providers with a more appropriate
casemix and associated cost base.
NHSI’s intention is to ensure that the 2017/19 NTPS gives providers a strong incentive to be more cost-effective in delivering activity — increasing productive
efficiency — whilst also providing incentives for both providers and commissioners to determine the most cost-effective mix of services for their respective
populations — driving allocative efficiency.
Subchapters with net spend increases nationally
In absolute terms, the HRG subchapters with the largest spend increases would be:
• Subchapter NZ Obstetric medicine (maternity services) — £332m increase nationally (+13% of total spend in the subchapter)
• Subchapter VB Emergency medicine — £193m increase (+10%)
• Subchapter AA Nervous system procedures and disorders — £89m increase (+8%)
Subchapters with net spend decreases nationally
In absolute terms, the HRG subchapters with the largest national spend decreases would be:
• Subchapter WF Non-admitted consultations (outpatient attendances) — £199m decrease nationally (-4% of total spend in the subchapter)
• This will be likely mainly driven by changes to outpatient follow-up attendance prices (see Section 3). Since outpatient attendances account for around
£4.9b of nationally priced spending, NHSI have analysed the changes within this subchapter by Treatment Function Code (TFC). Of 56 TFCs, the proposed
prices would change spending by ±10% in 31, meaning there is significant scope for material movements. A summary of the largest movements are given
in Section 3.
• Subchapter EY Interventional cardiology for acquired conditions — £80m decrease (-8%)
• Subchapter BZ Eyes and periorbital procedures and disorders — £66m decrease (-9%)
6NHS Improvement — Impact assessment: 2017/18 and 2018/19 National Tariff Payment System consultation notice, pp19-23

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Key considerations for the introduction of HRG4+
Understand the possible risks (upside and downside) for the new currency
The 2017/18 prices have been based on reference cost submissions for 2014/15, which were based on HRG4+ (phase 3). Analysis can be undertaken on actual
activity outturn for 2015/16 (or planned/forecast outturn activity for 2016/17) uplifted as appropriate for preliminary activity assumptions for 2017/18 and
2018/19. Appropriate assumptions on casemix can be made on this activity set, where required, and the proposed prices applied to see the risks and/or
opportunities that are possible with the new prices.
Clinical coding
The use of HRG4+ as the new national tariff currency will undoubtedly increase the sensitivity with which provider income responds to the coding of patient
spells. The increased depth of coding to account for multiple levels of complication and co-morbidities (compared to the more restricted with/without levels
described in HRG4) will mean that trusts will have to demonstrate robust mechanisms for capturing CC scores within patient records to ensure spells are
allocated to the correct HRG split.
Providers will need to ensure clinicians are engaged to ensure they chart relevant complication and co-morbidity information to allow clinical coders to capture
appropriate detail to inform the allocation of HRGs to patients through the new HRG grouper. An audit of existing records may provide a view on the quality of
charting and coding against HRG4+ coding standards and highlight areas for improvement in the lead up to the new tariff being introduced.
It is possible that trusts could see an increase in the number of inpatient spells being invalid for grouping (attracting a ‘U-code’) and thus nil income. Running
existing activity datasets through the latest HRG grouper can identify whether there are any systemic deficiencies in clinical coding that trusts will need to
remedy prior to 1 April 2017. Communication with CCGs on the extent of these deficiencies and the moves to improve counting and coding can ensure that all
contract parties are sighted on the possible impacts of the new tariff currency.
NHSI has stated that it does not believe that there will be a risk of provider ‘up-coding’ of activity to generate additional income, but that prices will better
reflect prevailing costs.
Anticipated impact of HRG4+
Providers who treat a relatively complex — or high acuity — APC casemix will undoubtedly benefit from the additional granularity afforded by the new currency.
With robust clinical coding, these providers will undoubtedly benefit from the higher per-spell tariffs and extended trimpoints within HRGs on the more complex
end of the CC spectrum.
Conversely, providers with a less complex casemix may find themselves under pressure with respect to spell income and be required to reduce average length of
stay where trimpoints are lower than those defined in the current HRG4 tariff. It may be that where a provider’s casemix contains a significant number of ‘minor
CC’ HRG activity, these will map to a lower-priced ‘CC score 0-1’ or ‘2-3’. This would reduce the income received for these spells, necessitating a length f stay
reduction to maintain margin relative to the existing tariff. Such providers would need to assess the engagement grouper to determine whether such risks exist
from 1 April 2017. Likewise, commissioners will need to be aware of these issues facing their providers to ensure that services can continue to deliver allocative
efficiency whilst maintaining clinical quality and safety.

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Proposed changes
Under the current payment approach, top-ups for specialised services are based upon four areas from the Specialised Services National Definitions Set
(SSNDS), with accompanying top-up rates. The move to HRG4+ as the currency for admitted patient care combined with a proposed move to the Prescribed
Specialist Services (PSS) flags means that specialised services top-ups will be changed. This will mean that four new areas will be added to the existing four —
these are cancer, respiratory, cardiac and other.7
The move to HRG4+ means that the tariff is better able to account for the higher acuity of patients that are likely to be treated in a specialised setting. As such,
NHSI have proposed that the rates applied for specialised services be reviewed. This was initially introduced in the consultation for the 2016/17 NTPS, when
HRG4+ was intended to be introduced.
Furthermore, the list of specialised services has been reviewed, and increases from the five codes in the SSNDS list to several dozen — across eight clinical
areas — in the PSS list8. This list provides greater granularity than does the SSNDS list. For example, where the SSNDS list proposed two specialised services
codes for children (one for ‘high’ and one for ‘low’) the PSS list has nine separate flags for different sub-specialties.
NHSI is proposing phasing in the new top-ups over four tariff periods in those areas where gross payments are significantly reduced — paediatrics and
orthopaedics. This will ensure that the transition to the new top-ups will not be destabilising to the sector. NHSI estimates that moving straight to PSS flags
would increase total top-ups from £320m to around £478m, with significant variation beneath that. Specialised services payments for 2017/18 will be around
£417m.
Key considerations
Review of specialised services activity will allow providers to understand at a specialty or sub-specialty level how that activity will map to the new PSS flags and
what top-up will apply to that activity, to understand the net risk — or opportunity — to specialised services income.
NHSI and NHSE intend that the proposed changes to specialised services top-ups do not affect net NHS spending, as increases in top-ups will be offset by
decreases in HRG4+ prices. Analysis of NHSE’s specialised services commissioning in their areas will allow commissioners to ascertain whether there would be
any significant net impact on their acute commissioning costs, particularly where there are a large number of providers and any concentrations of specialised
service provision.
Specialised services top-ups
8NHS Improvement & NHS England — National tariff proposals for 2017/18 and 2018/19, pp62-64

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Section 3
Tariff scope

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Summary of the proposed changes
The national tariff will cover four new areas9, providing mandatory prices across seven HRGs. NHSI and NHSE have confirmed that the scope of prices will not
change over the two-year period to March 2019 — i.e. there will be no new national prices before April 2019.
The mandatory national prices that are to be introduced from 2017/18 are as follows:
• Cochlear implants (CA41Z, CA42Z)
• Complex CT scans (RD28Z)
• Complex therapeutic endoscopic, upper or lower gastrointestinal procedures (FZ89Z)
• Photodynamic therapy (JC41Z, JC42A and JC42B)
These areas are being brought into the scope of national prices to provide greater consistency to commissioning arrangements for these services. Consultation
on introducing these national prices were considered for 2016/17, but were postponed until the introduction of HRG4+.
Key considerations
A review the new national prices for these HRGs will allow providers to compare against any existing local agreements to assess the impact of these
introductions. The introduction of a new currency for these procedures or therapies is also an opportunity to ensure that clinical coding is robust enough to
deliver activity to the respective HRGs. Trusts may wish to ensure that they are capturing and recording patient-level data with respect to the above procedures
to ensure that the correct prices are applied to them once they run through the payment grouper and ultimately through Secondary Uses Service (SUS) from 1
April 2017.
New inclusions to national prices
9NHS Improvement — 2017/18 and 2018/19 National Tariff Payment System: A consultation notice, pp18-19

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The summer engagement proposal for consultant-led outpatient follow-up (OPFU) prices was to remove all mandatory tariffs and allow a single payment to be
agreed between providers and commissioner, effectively mandating a block payment for this activity. The sector demonstrated its opposition to this proposal,
citing major concerns around:
• Being unable to agree sensible financial quanta for OPFU activity within the timeframe required for agreeing contracts — by the end of December 2016.
• The creation of incentives for inappropriate discharges back to primary care and generation of additional outpatient first attendances (OPFA). It might have
been that a proportion of these OPFAs would not be clinically appropriate for discharge and would have been best dealt with through ‘advice and guidance’
arrangements or attendance at an outpatient clinic.
• A lack of information regarding the impact of the proposal on its ability to reduce OPFU attendances.
There was support for the intent behind the proposal, however, prompting NHSI and NHSE to propose an alternative solution.
Instead of a block payment covering all OPFU attendances, the intention is to increase the price differential between outpatient first attendances (OPFA) and
OPFUs. The current approach is to transfer a fixed 10% of OPFU costs into OPFAs, to increase the price of the latter and provide incentives to see new patients
instead of more follow-ups. The proposal NHSI and NHSE are consulting on is to increase the transfer of costs to 30% for adult surgical and some adult medical
specialties and 20% for other adult medical specialties. Paediatric specialties, haematology, oncology and nephrology will remain unchanged at 10%, along with
areas where a best practice tariff (BPT) exist.
Key considerations
NHSI’s analysis10 suggests that the proposed prices would cause total spending on outpatient attendances (HRG subchapter WF) to decrease by £199m
annually, a fall of 4% on 2016/17 levels. This pricing change will have a material impact on income for many trusts.
The analysis undertaken by NHSI demonstrates the total impact on OPFU tariff spending at TFC level. The largest absolute changes (decreases and increases)
within this subchapter are:
Commissioners may wish to consider opportunities to consolidate services in providers where scale can drive efficiency in specialties under price pressure.
Where options to transfer services are not available, or where the alternative is more achievable, providers may be able to explore options to reduce
unnecessary costs by working with commissioners in redesigning outpatient care. This may include increased use of virtual and telephone clinics, group clinics
or utilising contractors or reducing clinically unnecessary OPFAs by increasing use of advice and guidance.
Changes to outpatient follow-up attendance tariffs
Treatment Function Code Income decrease % decrease Treatment Function Code Income increase % increase
301 Gastroenterology -£32m -16% 306 Hepatology +£12m +40%
110 Trauma & orthopaedics -£30m -4% 410 Rheumatology +£15m +7%
320 Cardiology -£29m -11% 800 Clinical oncology +£16m +11%
10NHS Improvement — Impact assessment: 2017/18 and 2018/19 National Tariff Payment System consultation notice, pp21-22, 91-92

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Pathway payments for maternity services were introduced in 2013/14, replacing episodic currencies that were used up until this time. The
pathway payment is split into three components — antenatal, delivery and postnatal. The ante- and post-natal phases were further subdivided into
standard, intermediate and intensive levels of care. The higher intensities, therefore, attract higher payments, reflecting the greater cost of
delivering the care. The delivery phase is based on the HRG derived from the intrapartum spell, grouped into ‘with’ or ‘without’ CCs.
Changes to the antenatal phase
The payments for intermediate and intensive levels of antenatal care were based on the National Maternity Data Set (NMDS) available at the time. In 2015,
NHSI collected updated casemix information that showed a higher proportion of antenatal cases were in the intermediate and intensive categories than were in
the original data set.
In updating the casemix assumptions for the antenatal stage of the maternity pathway, more activity will be allocated to the intermediate and intensive levels
and less to the standard level. This change to the activity weightings will cause the price of the standard level of antenatal care fall, whilst the price for
intermediate and intensive levels will increase. However, the total quantum of money allocated to the antenatal phase will not be affected — only the relative
prices are changing under the new tariff proposals.11
Changes to the delivery phase
Eight HRGs in the delivery pathway have been amended to include ‘with comorbidities and complications’.12 Caesarean section deliveries and postpartum
interventions were mapped to the lower payment level within the pathway, causing the sector to feedback that they were being underfunded.
The HRGs that will be mapped to the ‘with CC’ category from April 2017 are:
Changes to the maternity pathway payment
Antenatal phase Current casemix Proposed casemix Change
Standard 65.5% 50.0% -15.5%
Intermediate 27.3% 38.7% +11.4%
Intensive 7.1% 11.3% +4.2%
• NZ32C — Normal delivery, with epidural and induction, or with postpartum
surgical intervention, with CC score 0
• NZ33C — Normal delivery, with epidural or induction, and with postpartum
• NZ34C — Normal delivery, with epidural, induction and postpartum surgical
intervention, with CC score 0
• NZ42C — Assisted delivery, with epidural and induction, or with postpartum
• NZ43C — Assisted delivery, with epidural or induction, and with postpartum
• NZ44C — Assisted delivery, with epidural, induction and postpartum
• NZ50C — Planned caesarean section with CC score 0-1
• NZ51C — Emergency caesarean section with CC score 0-1
11NHS Improvement & NHS England — National tariff proposals for 2017/18 and 2018/19, pp17, 49
12NHS Improvement — Impact assessment: 2017/18 and 2018/19 National Tariff Payment System consultation notice, pp21-22, 91-92

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Key considerations
Providers could analyse their maternity pathway data, focusing on the antenatal component in order to understand their baseline complexity levels. Where
providers have relatively complex antenatal cases, there is an opportunity for additional income to be realised to reflect the high cost of providing the care.
There might also be analysis undertaken to understand the impact on other providers in the antenatal phase of the pathway — there may be additional income
available to expand the services provided, or cost pressures arising in less acute areas calling for a redesign of pathways and consolidation into fewer providers.
This would offer an opportunity to ensure that patient complexity data are robust to ensure that patients are being correctly allocated to the intermediate and
intensive pathways for payment, so that trusts’ incomes can be adequately matched to the costs incurred for the delivery of that care.
With respect to changes to the delivery phase, more deliveries will be mapped to the higher level, attracting a higher price, with less cost attributed to the
standard level. Providers undertaking a relatively large number of normal deliveries without epidural, inductions and postpartum surgical interventions and very
low comorbidities and complications could face significant cost pressures on their maternity incomes. Commissioners may wish to consolidate maternity
services to ensure suitable scale exists to maintain financial sustainability — as well as clinical sustainability — in light of these changes. The lead provider model
may allow trusts under pressure from these proposals to better allocate resources for the delivery pathway and ensure that each type of delivery is undertaken
by the most appropriate organisation from a clinical point of view.
Changes to the maternity pathway payment (cont’d)

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Section 3.1
High-cost drugs and
devices

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Drugs on the high-cost drugs list will continue to be paid for on a pass-through basis, with or without a mark-up agreed with commissioners — or through other
locally-negotiated means. NHSI and NHSE have updated the lists in response to requests from the sector and following advice received from the high cost drugs
steering group. The use of high-cost drugs and devices list allows new drugs to be funded without having to be incorporated into the tariff, the development of
which will inevitably lag behind innovations in pharmaceuticals and their administration.
There are a total of twelve new drugs added to the list:13 two new drugs have been added into existing categories and ten drugs are distributed across nine new
categories. One drug — fibrin sealants — has been removed from the list, the funding for which will come from national prices. The lists will remain unchanged for
the two years of the proposed tariff:
Key considerations
Provider review of current spend on the drugs added to the high-cost list would allow them to understand the total quantum of spend affected. Assessments
may be made to understand whether the addition of these drugs to the tariff exclusion list will materially increase usage and whether this will influence prices
paid for the drugs.
Trusts could explore opportunities to introduce or expand existing gain-share agreements where price reductions on high-cost drugs are negotiated so that
additional benefits may be exploited by providers, whilst simultaneously benefiting their commissioners.
The summer engagement round did highlight concerns that any new drugs licensed during the 2017/19 tariff could not be added to the high-cost drugs list.
Providers were concerned that if commissioners were unwilling to fund new drugs, trusts would have to rely on national tariff income to cover these costs. It
would be possible that these would be insufficient to cover these costs, meaning that either trusts would have to find the money to fund the drugs from other
cost reduction schemes or lose the clinical benefits of these drugs by utilising existing regimens. Providers and commissioners might benefit from designing a
robust drug assessment framework together. This could help them to make a combined clinical and financial case for the funding of new drugs and to help
inform future additions to the high-cost drugs list after 2018/19. NHS Improvement have stated that they will monitor the impact of this decision.
Changes to the high-cost drugs list
Drug category Drug name Drug category Drug name
AIDS/HIV Winfuran (KP 1461) Growth hormone and growth hormone
receptor antagonist
Albutropin
Central nervous system Cerliponase alfa Lysosomal storage disorder drugs Reveglucosidase alfa
Drugs affecting the immune response Dupilumab Malignant disease and immunosuppression Begelomab
Atacicept Multiple sclerosis (MS) Ceralifimod
Cobitolimod Musculoskeletal and joint diseases Halofuginone
Drugs used in metabolic disorders Chenodeoxycholic acid Neuromuscular disorders Eteplirsen
13NHS Improvement & NHS England — National tariff proposals for 2017/18 and 2018/19, p19 and
NHS Improvement & NHS England — Annex B1: 2017/18 and 2018/19 National Tariff: currencies and prices, sheet 13b

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The use of HRG4+ (phase 3) as the overriding currency for admitted patient care and will mean that many costs associated with high-cost devices will be
captured within the tariff itself. This means that there will be a reduced need for locally-agreed prices for devices on a high-cost list. The summer engagement
propsal14 saw the removal of ten categories of high-cost devices, with their costs being incorporated into the HRG prices. Following feedback from the sector,
there were concerns that by removing devices from the list, they would no longer be considered for the central procurement programme and reduce the scope
for economies of scale due to the need to procure locally.
Therefore, of the ten of 28 categories which were to be removed from the high-cost device list identified in the summer engagement proposals, only two will
now be removed.15 These are cochlear prostheses and consumables for robotic surgery.
NHSI and NHSE have made it clear that their intention is to reconsider the exclusion of other devices for the setting of the tariff from April 2019, meaning
trusts and commissioners may wish to develop protocols for procuring such devices cost effectively in future.
Key considerations
Clinical coding will become increasingly important to be able to capture the use of expensive devices in the provision of care. Accurate recording of procedure
codes will ensure that the correct HRGs are allocated to patients and will ensure that the costs associated with devices used during that care are recovered
through tariff income. Providers may benefit from an audit of the records of patients within the HRG (sub-)chapters affected to ensure that current charting and
coding practices will negate the income risk of devices moving under the scope of the tariff. In the first instance this would cover cochlear implants and robotic
procedures, with the HRGs containing the devices previously marked for exclusion being a lower priority.
Since these devices will no longer be funded on a pass-through basis, providers may be able to increase their margin by negotiating lower device prices with
suppliers. Where gain-share agreements exist with commissioners, providers may want to understand the impact of moving device income from pass-through
into tariff and that they will not be required to share price reductions with commissioners moving forwards. However, inclusion of these devices in HRG tariffs
should mean that commissioners face lower net device costs driving net benefit to the system as a whole.
Changes to the high-cost devices list
14NHS Improvement & NHS England — National tariff proposals for 2017/18 and 2018/19, p18

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Section 3.2
Best practice tariffs
(BPTs)

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Proposed changes
There are no proposed changes to the way best practice tariffs (BPTs) will operate through the national tariff — the BPT prices are intended to reflect the cost
of providing best-practice care. Where providers are able to demonstrate they are delivering best practice as prescribed by NHSI and NHSE, they will be eligible
for the BPT payment. NHSI have proposed existing datasets be used to capture compliance with each of the two new BPTs. This means that providers will not
have to overhaul data collection and recording to be able to attract additional BPT income. However, increased rigour in the application of some of these
datasets — in new BPTs or where performance criteria are increased — may create additional administrative burden for trusts in pursuit of best practice and the
associated income to reflect the costs of providing care.
From April 2017, two new mandatory BPTs are proposed and there will be changes to five existing BPTs and the removal of one BPT. There will be no further
changes to the make-up of BPTs until April 2019. Each new BPT is described below, with the key considerations for each also suggested:
*Two new BPTs proposed during the summer engagement round are available for commissioners and providers to agree under local pricing rules. These are:
• Straight-to-test for patients requiring lower gastrointestinal investigation via a nurse-led triage system — this would apply to colonoscopy and flexible
sigmoidoscopy HRGs.
• Cardiac rehabilitation for myocardial infarction within three days of an initiating event and before discharge for 45% of relevant admissions.
Changes to best practice tariffs
New BPTs* Amended BPTs Discontinued BPTs
1. Chronic obstructive pulmonary disease —
timely access to specialist input & discharge
bundle
1. New daycase procedures — addition of 19 new
daycase procedures & changes to achievement
rates for female incontinence and
tympanoplasty procedures
1. Interventional radiology
2. Non-ST segment elevation myocardial
infarction — timely access to coronary
angiography
2. Fragility hip fracture — replacement of three
performance measures
3. Primary hip & knee replacement — National
Joint Registry compliance rate & significance
criteria for health score gain
4. Same day emergency care
5. Acute stroke care – revision of criteria

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Proposed changes and key considerations
This BPT will be paid when a 60% of patients with a primary diagnosis of COPD receive specialist input to their care within 24 hours of admission and receive a
discharge bundle prior to discharge. The discharge bundle will seek to ensure patients can care for themselves post-discharge — such as review of medications
and correct use of inhalers, smoking cessation support, pulmonary rehabilitation offered where appropriate — and that they will follow-up with an outpatient
appointment — by phone or face-to-face — within 72 hours of discharge.16
This BPT aims to align clinical management of COPD with National Institute for Health and Care Excellence (NICE) guidance, leveraging the existing COPD audit
dataset. NHSI have stated that compliance rates for specialist input are currently so low that financial incentives are warranted to improve COPD care.
Compliance will be measured through the national COPD audit — commissioners and providers will need to use this dataset to demonstrate compliance.
Specialist input is defined as a “respiratory health professional deemed competent at reviewing and managing patients with acute exacerbation of COPD”, as
per the COPD audit. NHSI expect that achievement of the BPT will require a degree of up-front investment — see below.
Providers will need to ensure that they have sufficient respiratory specialist capacity to be able to input into the care plan of admitted patients within 24 hours.
Respiratory professionals will also require engagement to be able to inform the overall design of the discharge bundle and provide guidance on how this should
be used on a case-by-case basis. The senior clinical input required for the initial care input and discharge planning may require some up-front investment to be
able to design robust clinical protocols suitable for each provider.
Being able to provide robust data for the COPD audit allows trusts to demonstrate they are eligible for BPT income. They could use the results from previous
audits as a means to understanding deficiencies in performance against this BPT. Providers may also want to factor in that secondary care clinical audit will
move to continuous data collection in 2017, increasing the requirement to deliver quality clinical data. The Royal College of Physicians (RCP) is producing a new
tool to collect this data, meaning NHSI see recording and validating data for this BPT as being achievable.
New best practice tariffs
1. Chronic Obstructive Pulmonary Disorder (COPD)
Specialist input rate
Percentage of providers meeting criteria
— specialist input
Percentage of providers meeting criteria
— specialist input & discharge bundle
75% 11% 8%
70% 21% 16%
65% 26% 21%
60% (BPT target rate) 35% 28%

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A new BPT will be introduced to reduce the time between a patient being admitted for NSTEMI and receiving coronary angioplasty.17 To be eligible for the BPT a
target rate of 60% of NSTEMI patients should receive coronary angioplasty within 72 hours of admission. For inter-hospital transfers, coronary angioplasty must
be received within 72 hours of the first hospital admission. Current data show the rate of achievement of this standard is 55%, so NHSI are targeting marginal
improvement through this BPT.
Data will be collected through the Myocardial Ischaemia National Audit Project (MINAP) database which currently collects data on time from admission to
coronary angioplasty for NSTEMI patients. The National Institute of Cardiovascular Outcomes Research (NICOR) will publish guidance to support the validation
of the performance data (see ‘Further Reading’ section). The BPT will apply where the primary diagnosis is ICD10 code I214 — acute subendocardial myocardial
infarction and the HRG is one of four on the list given below:
• EY40 A to D: Complex percutaneous transluminal coronary angioplasty with CC score 12+ to 0-3
• EY41 A to D: Standard percutaneous transluminal coronary angioplasty with CC score 12+ to 0-3
• EY42 A to D: Complex cardiac catheterisation with CC score 7+ to 0-1
• EY43 A to F: Standard cardiac catheterisation with CC score 13+ to 0-1
Trusts will need to ensure there is sufficient headroom in acute catheterisation laboratory capacity to be able to manage an increased number of procedures
being required at short notice. The associated charting and coding of the patient spell, along with timestamps, will also be critical to ensure the correct patients
form part of the relevant population comprising the BPT.
New best practice tariffs (cont’d)
2. Non-ST segment elevation myocardial infarction (NSTEMI)

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Under the proposed tariff to March 2019, NHSI and NHSE have proposed changes to five existing BPTs:
New procedures will be added to the daycase BPT list, and the achievement rates for two existing daycase procedures increased:18
• New daycase procedures — in line with what the British Association of Day Surgery (BADS) considers achievable, 19 new procedures have been added to the
daycase BPT list. NHSI has assumed that the achievement rate for each procedure is cost-neutral, meaning a net-income opportunity exists on achievement
of daycase rates, along with increased bed throughput or savings associated with bed closures where total patient bed days are sufficiently reduced.
• Changes to achievement rates — two existing procedures (female incontinence and tympanoplasty) will see increased rates to be achieved prior to
attracting the BPT. NHSI has assumed that the achievement rate for each procedure is cost-neutral, meaning a net-income opportunity exists on
achievement of daycase rates, along with increased bed throughput or savings associated with bed closures where total patient bed days are sufficiently
reduced. The target rate for female incontinence will increase from 45% to 60%, whilst the rates for tympanoplasty will increase from 50% to 65%.
Trusts might benefit from baselining average lengths of stay for the new and modified procedures to determine the potential bed-day savings that could arise
from working towards the achievement of daycase rates. Where bed capacity is freed up, trusts should agree with CCGs how best to redeploy this or
decommission the beds.
In consultation with the National Hip Fracture Database team and Healthcare Quality Improvement Partnership NHSI have proposed that the three care
measures currently required to be met to achieve the BPT be removed and replaced with three new measures.19 These new measures are:
• Nutritional assessment during admission
• Delirium assessment during admission
• Physiotherapist assessment on the day following surgery
These measures seek to improve immediate outcomes, with NHSI also looking to encourage trusts to follow-up with patients within 120 days of discharge to
ensure bone treatment protocols are being complied with. This is likely to occur in a future BPT modification as NHSI look to overcome sector concerns
regarding flex and freeze dates.
Trusts will need to ensure that therapists are briefed and deployed appropriately to ensure the BPT measures are met for the patient spell. Presently, data
collection is often a manual process — trusts may need to develop new mechanisms of data collection to ensure maximum compliance can be demonstrated.
Orthopaedic leadership would need to be involved in the design of follow-up telephone clinics to deliver follow-ups within 120 days of discharge — whilst this is
not a mandatory criteria for the BPT, discussion with commissioners on designing such a pathway modification may deliver more favourable patient outcomes
and reduce total system costs, pending the completion of the appropriate analyses.
Changes to existing BPTs
1. Changes to daycase BPTs
2. Fragility hip fracture
18NHS Improvement & NHS England — National tariff proposals for 2017/18 and 2018/19, pp25-26, 55

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The rate of patient reported outcome measure (PROM) data to the National Joint Registry (NJR) will remain at 85% — having been previously proposed to
increase to 90-95% — following concerns around having to validate a higher number of cases and random variation as well as the level of variation in complexity
of procedures between trusts.
For health gain scores, outlier control limits will move from 99.8% to 95% significance across a consecutive two year period (remaining at the 99.8% for the
single year), reducing the number of providers eligible for the BPT.20 These changes should improve the information patients and their clinicians possess when
making decisions about their care. Providers will need to be aware that achievement of the health gain criterion will be more difficult over the two years of the
tariff. Orthopaedic services will need to engage with their patients and ensure that valid improvements in patient outcomes are recorded to ensure providers are
rewarded when delivering best practice.
Seven additional clinical scenarios will be added to the SDEC best practice tariff to target increased treatment in an appropriate ambulatory care setting. The
identified scenarios and achievement rates (derived from HES data for 2013/14) for BPT eligibility are:21
Changes to existing BPTs (cont’d)
3. Hip and knee replacements
4. Same day emergency care (SDEC)
Clinical scenario National average Upper quartile (target rate) Change
Abnormal liver function 22% 30% +8%
Acutely hot painful joint 55% 65% +10%
Chronic indwelling
catheter-related problems
55% 65% +10%
Gastroenteritis 26% 35% +9%
Transient ischemic attack 30% 40% +10%
Urinary tract infections 21% 30% +9%
Upper GI haemorrhage 50% 60% +10%

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Changes to the acute stroke care BPT were only announced in the consultation notice in November 2016.22 The amendments proposed are intended to align the
BPT more closely with NICE guidance. The changes proposed are to the criteria as follows:
• Patients should be admitted to an acute stroke unit directly from the ambulance service, accident & emergency or via brain imaging, and not be admitted to a
medical assessment unit — this remains unchanged from the previous criterion. A second criterion is added requiring patients to be seen by a consultant
stroke specialist within 14 hours of admission whilst spending most of their hospital stay on the acute stroke unit.
• As with the existing criterion, patients should receive brain imaging within 12 hours of being admitted to the stroke unit. Where previously the criteria
required that the scan be completed, interpreted and acted upon by a suitably qualified physician or radiologist, NHSI have recognised that radiological
reporting and associated clinical decision-taking are not routinely time-stamped and therefore cannot be accurately reported. Therefore as a proxy for this
criterion, the BPT wording now states that “reporting times are not defined but access to skilled radiological and clinical interpretation must be available 24
hours a day, 7 days a week to provide timely reporting of brain imaging”.
The revisions to the acute stroke care BPT criteria are intended to more closely align with operational reality rather than aspirational recording of all relevant
clinical activity as previously proposed. The BPT is seeking to achieve the same ends, but will be measuring achievement of these via different means. Since
trusts are already unable to record activities associated with reporting and decision-taking from brain scans, it would seem unlikely that the changes to the
criteria would have a material effect.
The clarification of the BPT criteria could, in some cases, mean that the need to provide 24/7 consultant radiologist and/or stroke physician cover may preclude
hospitals with emergency departments that close from achieving this BPT. It may be unlikely that such hospitals would have been eligible previously, but trusts
should ensure they are clear on any potential impact on their ability to achieve this BPT.
Changes to existing BPTs (cont’d)
5. Acute stroke care
22NHS Improvement & NHS England — 2017/18 and 2018/19 National tariff Payment System: A consultation notice, pp38-39

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Under the proposed tariff to March 2019, NHSI and NHSE have proposed removing one BPT:
The interventional radiology (IR) BPT of £1,353 per qualifying spell — which was introduced in 2011/12 — will now be withdrawn due to HRG4+ addressing the
issue that the BPT was introduced to relieve.23 NHSI’s tariff engagement document lists out all of the procedures that are affected by this change, as well as the
HRG codes to which they will map.24 Since the activity will be allocated through the grouper and income determined appropriately thereafter providers may
want to ensure that their general counting and coding processes are robust in preparation for the introduction of HRG4+ (phase 3).
The summer engagement did allow providers to express concerns around their ability to fund interventional radiology procedures through the national tariff.
The possibility of IR procedures being replaced by older, more expensive and more invasive procedures where HRG4+ prices do not cover areas funded by the
BPT was raised. This included angioplasty, stenting for diabetic foot disease and uterine artery embolism.
The possibility of reverting to more invasive procedures — and away from best practice — might be achieved through provider benchmarking of costs in IR HRGs
to understand the drivers of increased costs and how to deal with these. CCGs would be keen ensure that their providers do not allow patient experience or
outcomes and possibly safety to deteriorate by employing more invasive procedures in the absence of the BPT. Ensuring that IR procedures are carried out in
the most appropriate setting — such as those with adequate scale to support IR costs — could ensure that clinical behaviour is aligned to the intentions of the
2017/19 NTPS. An enabler of this could be to submit a local pricing variation in accordance with the prevailing rules to ensure seamless delivery of
interventional radiology from April 2017 as providers adjust to the new tariffs.
Removal of BPTs
1. Interventional radiology
23NHS Improvement & NHS England — 2017/18 and 2018/19 National tariff Payment System: A consultation notice, p37

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Section 3.3
Innovation and
technology tariff
(ITT)

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Introducing the ITT
NHSI and NHSE are introducing an innovation and technology tariff (ITT) to incentivise the uptake of new technologies that benefit patients.25 NHS England
have assessed a number of innovations that have gone through the NHS Innovation Accelerator (NIA) process for their suitability for inclusion in the ITT. This
assessment considers whether the services using the innovations are in scope for the national tariff and whether they are suitable for pricing within the tariff.
The introduction of any innovations will need to be agreed between providers and commissioners prior to implementation. Some innovations will be reimbursed
as part of tariff or as a tariff exclusion with either a mandatory or non-mandatory price. Non-mandatory prices should be agreed between trusts and CCGs as
per the prevailing local pricing rules and incorporated into contracts.
NHS England will fund CCGs for the ITT separately from tariff — there will be no top-slicing of national prices. Successful implementation of these ITTs may be
able to significantly reduce net costs by reducing the need to unnecessarily treat patients. This may be reflected in lower prices in future NTPS proposals as a
result of further-refined reference cost submissions or known manual adjustments made to prices by the NHSI pricing team. Where trusts and CCGs are able to
measure the impact of ITT interventions, they may be able to anticipate potential tariff changes after 2018/19 through cost analysis of their ITT deployments.
Providers will need to undertake a cost-benefit analysis to determine whether they will adopt some or any of the ITTs, ensuring that they factor in any
investment required to capture the evidence of use of the innovations, particularly where these will not be submitted through SUS, on top of costs to change
clinical practice — including procurement, clinical engagement and clinician training.
In summary, the list of innovations included in the ITT, along with their respective non-mandatory prices (unless otherwise indicated), for 2017/19 are:
A new innovation and technology tariff (ITT)
ITT name Price26 Mandatory / non-
mandatory
Basis of price estimate
1.
Acute angle episiotomy scissors to reduce obstetric anal sphincter injuries
(OASIS)
£16 per patient use Non-mandatory
Estimated 20 uses &
national procurement
by NHS Supply Chain
2.
Non-injectable arterial connector to reduce bacterial contamination and the
accidental administration of medication
Current local purchase
cost
3. Ventilator-associated pneumonia prevention systems in critically ill patients £150 per patient use Non-mandatory
Current local purchase
price
4. Web-based application for the self-management of COPD
£20 per unique patient
registration
Non-mandatory Not stated
5.
Frozen faecal microbiota transplantation for recurrent Clostridium difficile
infection rates
Cost of service
provision
6.
Prostatic urethral lift systems to treat lower urinary tract symptoms of
benign prostatic hyperplasia as a daycase
£2,538 / £2,107 per
patient spell (via SUS)
Mandatory HRGs LB70C / LB70D
25NHS Improvement & NHS England — 2017/18 and 2018/19 National tariff Payment System: A consultation notice, pp39-43
26NHS Improvement & NHS England — 2017 to 2017 National Tariff: innovation and technology tariff (ITT)

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The Department of Health (DH) have centrally procured a number of acute angled episiotomy scissors, which have been made available to the NHS through NHS
Supply Chain. The use of these scissors can help clinicians performing episiotomies to achieve a cut of between 45 and 60 degrees — as per NICE guidance for
the procedure — and reduce the incidence obstetric anal sphincter injuries (OASIS). OASIS occur in around 25% of episiotomy cases at present, with 15% of all
births in England requiring an episiotomy in the first place.27 Making use of angled scissors should reduce the incidence of poor patient outcomes, resource-
consuming reconstructive surgery and costly litigation.
In determining the non-mandatory price of £20 per patient use — to be charged by the provider to the commissioner locally — NHS Improvement have estimated
20 uses. NHS Supply Chain will be able to provide these scissors to providers.
In preparing for the introduction of this innovation, trusts may wish to identify their current cost base associated with OASIS and associated repair —
engagement with senior obstetricians will help to ensure that these costings are clinically robust. Trusts would then be able to establish mechanisms to monitor
the clinical and financial impact of using the new episiotomy scissors. Commissioners could then propose a means of releasing funding from these complications
in subsequent contract negotiations — either partially, to support further provider improvement, or fully, to allocate resources elsewhere — to ensure the
benefits of this innovation can be felt across the system. It is possible that this would be phased over a time period of longer than the two year contracts being
agreed presently, due to the ‘sticky’ nature of provider costs and to allow the safe and sustainable reallocation of any funding.
Any arterial cannulation is associated with complication risk, including bacterial contamination, blood spillage and accidental intra-arterial injection of
medication. The use of one-way needle-free connectors can prevent the accidental administration of medication to the arterial line, as well as reducing the
incidence of blood spillages. Whilst wrong route drug administration is relatively rare, the clinical and cost implications can be significant, causing serious
damage to the vessel and surrounding tissue.28
A non-mandatory price of £2 per patient use has been suggested by NHSI and is based on the cost of a connector available locally from Papworth Hospital NHS
Foundation Trust. There is currently insufficient volume to justify a central procurement of this innovation, however usage will be monitored and the decision to
procure nationally will be reconsidered.
Trusts and CCGs could work to understand the number of additional spells relating to bacterial contamination from arterial cannulation or from wrongful
administration of medication that the new connector would aim to prevent. This would then provide a baseline of activity to cost up and allow a quantum of
avoidable cost to be identified and targeted for phased removal from the system.
Innovations included within the ITT
1. Acute angle episiotomy scissors
2. Non-injectable arterial connector

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Ventilator-associated pneumonia (VAP) is defined as pneumonia occurring 48-72 hours following endotracheal intubation. It is characterised by the presence of
a new or progressive infiltrate, signs of systemic infection such as elevated white cell count and/or fever, changes in sputum characteristics and detection of a
causative agent. VAP is a higher risk for patients at the beginning of their ventilation period.29 Around 100,000 patients require ventilation in critical care in the
UK each year, of whom an average of 10-20% of these will be diagnosed with VAP, with a mortality rate of around 30%. This amounts to between 3,000 and
6,000 patients a year in the UK. Each episode of VAP is estimated to cost between £10,000 and £20,000.
The use of a cuffed ventilation tube and an electronic cuff monitoring and inflation device can help to prevent VAP by preventing leakage of foreign substances
from the mouth and stomach to the lung. The ITT price of £150 per patient use is based on the purchase price of such a device, to be reimbursed locally, as with
critical care services generally. NHSI has stated that current volumes do not justify a national procurement, but that this decision may be subject to review once
volumes are sufficient.
Trusts could take the opportunity to analyse the number of critical care bed days lost to VAP as a way of baselining a quantum of cost to be targeted for
elimination as a result of adopting this ITT.
The NHS spends more than £1 billion each year in the management of COPD.30 Treatment of the condition is complex, for which there are numerous inhalers
and different uses thereof. Compliance with prescribed treatment regimens is generally low, with associated poor outcomes and wasted prescribing. The flare-
ups of the condition brought about by non-compliance with treatment protocols means that there are often unnecessary hospital admissions each year.
Recent studies suggest that disease-specific self-management can improve the health of patients and reduce hospital admissions in COPD populations. Studies
in COPD management have demonstrated that where patients are empowered to self-manage their condition, their knowledge and skills to treat it are improved.
Web-based desktop and mobile applications have been developed to help patients more effectively manage their condition, with the ability to link in with
hospital dashboards and enable the remote monitoring and management of patients, whether at an individual or population level. Furthermore, not only can
providers eliminate unnecessary costs associated with prescribing and non-elective admissions, commissioners can monitor populations to identify any issues
with healthcare inequalities in real time.
NHSI’s non-mandatory price associated with the implementation of such applications is £150 per unique registered user and should be procured locally. Trusts
could analyse their population of COPD patients — concurrently with their preparation for the COPD BPT — and ascertain the suitability of the population for its
receptiveness to a mobile application approach to self-management of their condition. Respiratory clinicians could help engage patients with the programme
and ensure that there is sufficient uptake and scale to cover any up-front investment in the deployment of such applications. Commissioners would want to work
with providers to design actionable outputs from the data collected from such a system.
Innovations included within the ITT (cont’d)
3. Prevention of ventilator-associated pneumonia in critically ill patients
4. Applications for the self-management of COPD
29NHS Improvement — Impact assessment: 2017/18 and 2018/19 National Tariff Payment System consultation notice, p118

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There are approximately 3,000 new cases of chronic Clostridium difficile infection (CDI) in England every year.31 CDI rates have been increasing in number and
severity, with the scope of susceptible patients expanding beyond those hospitalised patients receiving antibiotics. Faecal microbiota transplantation (FMT) has
been shown to be a safe and effective treatment for recurring CDI, probably due to the restoration of missing intestinal flora. FMT involves the provision of a
screened, specifically prepared stool, administered via a nasal tube into the intestine to restore gut bacteria. FMT is a recommended treatment for CDI by NICE,
and nine trusts have performed FMT on their own sites.
NHSI have proposed a non-mandatory price of £95 per patient use. This has been based on the cost of providing the innovation. Where usage volumes are
deemed sufficient to support a national procurement to support the administration of FMT, NHSI have stated the matter will be reconsidered.
Trusts will need to identify mechanisms to procure suitable faecal samples, whether these be from donors known to the patient and prepared specifically or
from samples held in stool banks. Microbiology units will need to establish processes and timelines for the timely screening of donor samples where these are
procured specifically — e.g. from known donors. Robust costing of these processes and subsequent administration of the donor stool should be compared
against the non-mandatory price as a benchmark before the contract price is agreed.
Benign prostatic hyperplasia (BPH) is a chronic condition whereby the prostate becomes enlarged, making it difficult for a man to pass urine. Consequently, this
can cause urinary tract infections, urinary retention or even renal failure. Existing treatment for BPH is transurethral resection of the prostate (TURP), which
involves cutting away or removing prostatic tissue. This requires a hospital stay of around three days and typically requires urethral catheterisation for many
days post surgery, both of which will involve some degree of clinical risk.32
The ITT involves the implantation of a permanent, adjustable lift implant which can list the prostate away from the urethra, thus allowing the free passage of
urine and alleviate lower urinary tract symptoms.
NHSI have included the cost of this ITT in the daycase tariff for the associated HRGs, allowing for reporting of use to be via patient spells in SUS. Trusts will
need to use procedure combination M678 — Other specified other therapeutic endoscopic operations on prostate + Y022 — Therapeutic endoscopic implantation
of prosthesis into prostate, which will be grouped into HRG root LB70 — Complex endoscopic, prostate or bladder neck procedures (male and female).
Where this innovation is deployed, trusts will need to ensure that clinicians and clinical coders are capturing the procedures accurately to ensure appropriate
funding via SUS. An assessment of the BPH population would help to understand the potential length of stay efficiencies associated with this diagnosis might be
and agreement with commissioners how this additional capacity might be deployed.
Innovations included within the ITT (cont’d)
5. Frozen faecal microbiota transplantation (FMT) for recurrent C. diff. infection rates
6. Treatment of benign urinary tract symptoms of benign prostatic hyperplasia as a daycase

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Section 4
References and
Further Reading

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This document provides a summary view of the proposed tariff changes starting in April 2017 and how trusts might wish to consider these proposals in
preparation for this date. NHSI and NHSE have published a number of documents to support the sector in gaining a deeper understanding of the tariff proposals
and the rationale that forms their foundation.
NHSI and NHSE official tariff publications
Consultation website — The statutory consultation website hosted by NHS Improvement contains all of the relevant documents for the 2017/19 tariff:
https://improvement.nhs.uk/resources/national-tariff-1719-consultation/
• 2017/18 and 2018/19 National tariff Payment System: a consultation notice — NHSI and NHSE’s formal tariff proposals for statutory consultation:
https://improvement.nhs.uk/uploads/documents/2017-2019_national_tariff_payment_system_-_A_consultation_notice.pdf
• Impact assessment: 2017/18 and 2018/19 National Tariff Payment System consultation notice — Analysis completed by NHSI to accompany the statutory
consultation: https://improvement.nhs.uk/uploads/documents/Impact_assessment_Nov_2016.pdf
• Annex B1: 2017/18 and 2018/19 National Tariff: currencies and prices — complete list of national currencies and prices that form the 2017/19 NTPS:
https://improvement.nhs.uk/uploads/documents/Annex_B1_-_national_tariff_workbook.xlsx
• 2017 to 2019 National Tariff: innovation and technology tariff — prices and descriptions of ITTs:
https://improvement.nhs.uk/uploads/documents/Innovation_and_technology_tariff_supporting_information.xlsx
• National tariff proposals for 2017/18 and 2018/19 — the tariff engagement document, published August 2016, outlining the initial tariff proposals:
https://improvement.nhs.uk/uploads/documents/TED_final_1.pdf
Other useful documents
• NHS Digital, HRG4+ 2017/18 Consultation Grouper — payment grouper to support the statutory consultation and supporting documentation hosted by NHS
Digital: http://content.digital.nhs.uk/article/7500/HRG4-201718-Consultation-Grouper
• Monitor, 2016/17 national tariff: Top-up payments for specialised services (archived) — details of the changes proposed for specialised services top-ups for
introduction in the 2016/17 tariff that were postponed to the 2017/19 tariff:
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/477498/Top-up_payments_for_specialised_services_finalwithcover.pdf
• Royal College of Physicians, National COPD Audit Programme: secondary care workstream — details of the clinical audit of patient care and organisation and
resourcing of COPD care and the proposed changes for 2017/19 COPD BPT: https://www.rcplondon.ac.uk/projects/national-copd-audit-programme-
secondary-care-workstream
• National Institute for Cardiovascular Outcomes Research — resources to support data collection for the NSTEMI BPT: https://www.ucl.ac.uk/nicor
• National Institute of Health and Care Excellence, Faecal microbiota transplant for recurrent Clostridium difficile infection — guidance pertaining to the faecal
microbiota transplantation ITT: https://www.nice.org.uk/guidance/ipg485
• National Institute of Health and Care Excellence, UroLift for treating lower urinary tract symptoms of benign prostatic hyperplasia — guidance on the medical
technology for prostatic urethral lift systems ITT: https://www.nice.org.uk/guidance/mtg26
References and further reading

EY-000008476-01
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