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Editor's blog Friday 18 February 2011: Flory's 'Dear Comrades' letter on tariff

Here's the David Flory letter

NHS Deputy Chief Executive
Richmond House
79 Whitehall

18 February 2011

Gateway ref: 15607

Dear Colleague

Publication of the final 2011-12 Payment by Results tariff package

I am writing to notify you that the final tariff for use from 1 April 2011 is published today on the Department of Health website.

Final guidance is also being published today which includes amendments following comments received as part of road testing the tariff. I hope these changes will help you in implementing Payment by Results in 2011-12.

I want to take this opportunity to re-state the intentions in relation to two specific policies - non-payment for emergency readmissions and the new flexibility to agree reductions in the published mandatory tariff price.

On emergency readmissions, we have taken advice from our clinical and managerial governance groups and have been persuaded that it is not possible to have certainty about which readmissions will or will not be related to the original admission. As part of these discussions we were, however, able to identify a number of services that could be excluded from the policy. Following feedback at road test, a small number of further exclusions have been added to the list and these are set out in the final guidance. Unless an emergency readmission falls into these categories, the new policy will apply.

There is no discretion about the use to which the savings from not paying for some emergency readmissions, accruing within PCTs, should be put. SHAs will be asked to monitor the progress of PCTs in identifying and using this money to develop services to support patients in the 30 day period following discharge. This responsibility will pass, along with the funding, to the acute sector from 1 April 2012 and both commissioners and providers will need to work together during the coming year to ensure that the transfer of responsibility can take place at that date.

The Operating Framework for 2011-12 introduced a flexibility, first signalled in the Operating Framework for 2010-11, which will create the opportunity for providers to offer services to commissioners at less than the published mandatory tariff price. I want to stress that this flexibility is not intended to signal a move to price competition. The final guidance therefore makes clear that use of this flexibility must be agreed by both commissioners and

The flexibility cannot be imposed through a competitive tender process, and the overriding requirement is that, the quality of service to the patient should not be diminished, in any way. Commissioners will be responsible for ensuring that the quality of services purchased using this flexibility is at least equal to, if not better than, services purchased at full tariff price. Commissioners must seek SHA approval before any variations to tariff can be implemented.

Our consultation on the tariff and draft guidance has resulted in some presentational changes being made to the tariff information spreadsheet. There have been a small number of changes to the prices and exclusions lists that were shared at road test. These changes are summarised in the table at Annex A, with more comprehensive details contained in the tariff information spreadsheet.

Yours sincerely

David Flory
NHS Deputy Chief Executive