Programme / Workstream

Programme / workstream

Primary Care Commissioning

Document Name

Review of PMS Contracts

Project

PMS review

/ Version /

Project Director

/ Alan Campbell /

Status

Programme Lead

Richard Freeman

Project Manager

Lindsey Bowes

Author

Lindsey Bowes

REVIEW OF PMS CONTRACTS – UPDATE

PROJECT INITIATION DOCUMENT

DOCUMENT HISTORY

Document Name
Organisation/
Further Information/
Additional Copies / Salford Primary Care Trust
St James’s House
Pendleton Way
Salford
M6 5FW
Tel No:
Fax No:
Email:
Document Owner
Document Client
Date of Issue
Date of Planned Closure
Supersedes Document
File Name / Location
© Salford Primary Care Trust, 2007

REVISION HISTORY

This document is only valid on date of printing. On receipt of a new version, please destroy all previous versions (unless a specified earlier version is in use throughout the project, eg as a baseline/benchmark)

Version No (eg) / Revision
Date / Summary of Changes / Amended By
Draft 01
Draft 02
Final 10

QUALITY ASSURANCE REVIEWERS

Name / Comment / Issue
Date / Version

APPROVALS REQUIRED: YES / NO (delete as appropriate)

This document requires the following approvals.

Name / Title/Responsibility / Signature / Issue
Date / Version
Programme Lead
Programme Director
Associate Director Commissioning Best Value Programme

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Salford Primary Care Trust

Review of nGMS & PMS Services in Primary Care

PROJECT INITIATON DOCUMENT

BACKGROUND

The best value review of PMS contracts commenced in 2007 to determine whether the increased level of investment delivered high quality, improved health outcomes, and value for money services for the residents of Salford.

The nGMS/PMS Contract represented a landmark in the development of General Practice and has provided and will continue to provide benefits to patients. The investment in Primary Care created a platform for a step-change in improved health and health service. It also provided greater flexibility for both PCTs and Healthcare Professionals to commission and provide a greater range of services.

The focus for change was to achieve:

Improved public health outcomes
Reduce inequalities
Reduce inconsistencies in funding
Value for money

PROJECT DEFINITION

PROJECT OBJECTIVES

Eliminate duplicate payments
Ensure that commissioning decisions are in line with PCT priorities and represent value for money
Ensure that health outcomes are being improved by the commissioning of services
Identify areas where efficiency gains could be made
Poorly performing practices will be identified and appropriately managed
Stretch existing targets
Identify poorly performing practices and appropriately manage them

History of work

Draft template developed
Two internal workshops to engage other directorates
Two external workshops with PMS practices
LMC involvement from the beginning
Expert advice from DH and NHS Primary Care Contracting
Areas reviewed that patients consider important

PROJECT SCOPE AND EXCLUSIONS

To review all contracting and commissioning routes for the delivery of Personal Medical Services (PMS).

The scope of this project will not cover work being undertaken to review other commissioning areas, ie secondary care services unless they are also provided in primary care.

PROJECT DELIVERABLES

The project will deliver an updated service specification with key performance indicators that PMS Practices will be able to aspire and achieve, these include:

Identification of patients with specific lifestyle problems to provide care
Stretch of existing targets to ensure improved performance for childhood immunisations, management of CHD, Diabetes, Hypertensions and COPD
Ensure compliance with the care of the dying pathway
Ensure list sizes are manageable
Ensure that business continuity and pandemic plans are implemented
Ensure that practices support education and training for their staff.

It will also provide a clear performance management tool to enable identification of those practices struggling to achieve targets.

The specification will be monitored via monthly or quarterly submissions of data by the Practice. Some data will be collected by the Data Quality Team. All data will be inputted into excel workbooks via the Primary Care Data Analyst. (excel workbook in development)

CONSTRAINTS

PMS Directions will still give regulatory constraint.
Workload capacity, given the pandemic must dos.
Financial constraints as per Primary Care Budget
Resistance to change

STAKEHOLDERS

PCT including public health staff
Patients (where appropriate)
General practitioners
Service Leads - Will be identified in the implementation plans
Provider Services
PBC Cluster Leads
Salford & Trafford Local Medical Committee
Head of GMS/PMS
Primary Care Commissioning Team, including medicines management; data quality team; FHS contracts
Finance (primary care accountant)

ASSUMPTIONS

No assumptions are made in commencing this project.

RESOURCE CAPABILITY AND CAPACITY

Workstream Manager – (Lindsey Bowes

Programme Lead – Richard Freeman

Information requirements will be from QMAS; Finance; Tier 2 Activity; Secondary care activity via TIS and in depth information will be required around all contract values; QoF finances and the monies allocated and spent on enhanced services.

Cost of the new contract

It is proposed that the following principles are adopted for costing the contract:

The new contract should be funded from existing budgets
There should be a basic payment for each registered patient based on the Carr-Hill weighting in order to reflect patient needs.
Given the additional benefits to the PCT of the contract (above GMS) there should be a small but significant premium for PMS costs per weighted patient compared with the corresponding GMS cost.
Enhanced service payments are outside of the scope of the contract costing
Where a practice opts out of additional services, the deduction will be based on the actual number of patients in the group that would receive the service.
All contractors would be required to opt out of Out of Hours Services
Payments to Practices will be based on weighted patient numbers at the end of the previous quarter, tolerances will no longer apply.
Payments for achieving key performance indicators should related to the group being served and should be sufficient to encourage practices to achieve the indicator
The current QOF points deduction for PMS Practices will not apply
There should be transitional relief for Practices that lose out and this should be phased out over a period of time.
PMS practices will continue to be entitled to separate payments for seniority, premises, sickness and special leave etc as per the regulations.
PMS Practices would be entitled to inflationary uplifts as per Department of Health Guidance following DDRB recommendations.

It should be noted that commissioners would have liked to offer the PMS contract to GMS Practices, although this is unlikely to be possible given the budgetary constraints.

It is proposed that the start date for the new contract will be 1st April 2010. Approval was gained at Commissioning Board in July therefore, contractors will be informed at the start of September as to their funding under the new contract then in effect the period from September to April 2010 would constitute more than 6 months of transitional relief. Transitional relief would be calculated in the following way:

Relief payments would be based on list size at end of September 2009
Relief payments would assume that the practice fully achieved all key performance indicators
The finance department will calculate what the practice would be entitled to under the old PMS contract for a full year and will calculate the maximum payment the practice would receive under the new contract for a full year.
Where a practice is due to receive a lower amount under the new contract it will receive the following transitional relief payments:
75% of the difference in 2010/11
25% of the difference in 2011/12
No relief after 2011/12
The transitional relief calculated will be an actual amount and will not be adjusted for inflation or for list size changes that occur after September 2009.

Financial Consequences

Based on financial costing the following option has been highlighted as the most appropriate

Recommended Option

Option 3 is the recommended option from the commissioning and finance perspective based on the following:

Option 3 will deliver £325k in recurrent cash releasing savings with non cash releasing efficiencies of £345k achieved through the key performance indicators; a total of £670k in recurrent best value savings. The £345k cost of the performance indicators, is the maximum payable so it is likely that there would be non recurrent slippage in year which could help fund transitional relief.
It will provide funding of essential and additional services across PMS on an equitable needs basis.
It provides a premium above the global sum payment as payments would be made at £64.80 x weighted list. The new global sum rate and gradual erosion of MPIG means that the average GMS rate is £64.79 per patient. So the average funding per weighted patient would be the same under PMS as under GMS (though under GMS there are still disparities on an individual practice basis).
Although the PMS contract doesn’t mandate services over and above the GMS contract it does provide a mechanism to performance manage contractors, achieve sign up to PCT policy and easier implementation of service enhancements by utilising the key performance indicators. In this respect the payment premium of £1.59 per weighted patient, 2.5% above the global sum rate of £63.21, could be considered a reasonable price.
Transitional relief could be funded up to 73% within the current financial envelope. It is recommended that transitional relief be proposed as follows to remain within the financial envelope: Year 1 - 70%, Year 2 - 35% and Year 3 - 0%.
It is the primary care commissioners preferred option.
The stretch performance measures recommended by the National Support Team have been incorporated into the specification.

The table below shows the financial implications to the PCT in Years 1 to 4.

Table 14

Proposed Transitional Income Relief / Year 1 / Year 2 / Year 3 / Year 4
Total Value of Losers / £445,020 / £445,020 / £445,020 / £445,020
Cash Releasing savings available to fund non recurrent costs / £325,296 / £325,296 / £325,296 / £325,296
% Relief The PCT can fund within Cash Released Savings / 73% / 73% / 73% / 73%
Transitional Relief Payment to Practices / 70% / 50% / 30% / 0%
£311,514 / £222,510 / £133,506 / £0
Net Cost to PCT (Positive = saving – Negative = non recurrent cost) / £13,782 / £102,786 / £191,790 / £325,296
Cost borne by PMS Contractors / 30% / 50% / 70% / 100%
£133,506 / £222,510 / £311,514 / £445,020

The impact on practices in Year 1 after adjusting for income relief is shown in the table below.

Table 15

Impact on Individual Practices of Option 3 / Current PMS Baseline Contract Value / Baseline Income Reduction/Increase / Year 1 Impact on Practice after transitional relief
Highest Value Loser / £569,190 / £127,501 / £38,250 loss
Highest % loser / £140,691 / £33,916 / £10,175 loss
Highest Gainer / £996,191 / £29,982 / £29,982 gain

Whilst 7 practices would gain under this option (if achieving maximum under the KPIs); 12 PMS contractors would lose income under this option. However it is recognised by primary medical contractors that the current system isn’t equitable and that some contracts don’t deliver value for money. Option 3 could then be seen as a very positive option.

The major disadvantage in this option is that the identified KPIs would only be delivered under PMS and this will create some inequities. It should be noted that the majority of KPIs in the contract are based on data collection rather than improved quality/targets; however commissioners consider that collection of patient data is critical to identification of disease or risk of disease and is also important for auditing that practices are providing equality of access to services and for targeting interventions

The finances have been prepared in considerable detail by type of payment and at practice level. This is to ensure that finance could provide individual practices with a clearly auditable methodology, which can be scrutinised in the principles of transparency and equity. Finance will also provide contractors with detailed financial information to show the financial impact on the individual contractor.

Assuming that all Practices achieve ‘Excellent’ on all indicators, the PCT will make a saving of £325k per year at the end of the transitional relief period.

COMMUNICATION/ENGAGEMENT PLAN

Small task and finish groups

Liason with General Practices.

Liaison with LMC

Regular monthly update and GP Commissioning Group meetings/Primary Care Divisional meetings

APPENDICES

Finance options paper prepared by Joanne Camilleri, Head of Commissioning Finance – 29th May 2009.
PMS Paper prepared by Richard Freeman, Associate Director, Primary Care.

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