NHS England High-Cost Tariff-Excluded Devices (HCTEDs) programme

Transcription

1 Provider Trust Frequently Asked Questions NHS England High-Cost Tariff-Excluded Devices (HCTEDs) programme V7.0 August 2017 This document has been developed to address Frequently Asked Questions (FAQs) raised by Provider Trusts around the NHS England High-Cost Tariff-Excluded Devices (HCTEDs) programme. FAQs are separated into five themes: Theme 1: Operation of the Financial Reconciliation Process (FRP) p2-8 Theme 2: Ownership of responsibilities p8-9 Theme 3: Scope & timings of the HCTED programme p9-17 Theme 4: Operation of the HCTED programme p17-27 Theme 5: Contract obligations p27 Please note: New and updated FAQs are indicated at the end of the questions throughout this document. Common acronyms to note: - Zero Cost Model (ZCM) - High-Cost Tariff-Excluded Devices (HCTEDs) - Financial Reconciliation Process (FRP) - Minimum Data Set (MDS) - Aggregate Contract Monitoring (ACM) - Bone Conducting Hearing Implants (BCHIs) - Information Rules (IRs) 1

2 Theme 1: Operation of the FRP Q1.1: How will Trusts need to process and reconcile purchases made under the new model and how will this work alongside the processing of stock purchased prior to migration i.e. Trust-owned stock? (Updated) A: This is outlined in the new FRP. For the official document that outlines the process, please contact your Trust s NHS England Supplier Manager. Q1.2: How do we treat current stock levels in the new financial year? Are we able to charge NHS England for stock? As a Trust we need to avoid write offs. (New) A: Stock that has been purchased and paid for by the Trust prior to migration to the ZCM will flow through the current device MDS/ACM, with the cost being recovered via pass-through payment as the items are used. HCTEDs ordered through the ZCM will still be owned by the Trust but NHS England will pay for them directly via NHS Supply Chain, with the value of any items held in stock at month end shown on the Balance Sheet of NHS England. Q1.3: Does the 5% mark-up for private patients not pass on a cost pressure to the Trust unless we consider it possible to raise our prices. How is this being justified? (New) A: For all HCTEDs, the cost shown in the FRP templates is the cost of the device only. There will be a 1.51% mark-up (reviewed annually) on all HCTEDs including NHS England devices which are charged to local specialised hubs. This is to recover the running cost of our partners, NHS Supply Chain. Originally, this procurement was intended to cover NHS England patients only. However NHS Providers advised that it was impractical for them to operate separate ordering systems and therefore it was agreed providers could order all devices via this route. This means an additional admin burden for NHS England as we will need to track the non-nhs England patients in order to recharge the cost to the NHS Providers. Private patients will be able to benefit, in the longer term from reduced prices on the back of the NHS s buying power via the NHS England procurement route and therefore reduced prices overall; should the NHS provider wish to pass on this saving to the patient. The 5% reflects both the running cost of the ZCM and the additional cost of administration for private patients. We would absolutely expect Trusts to pass the cost on, including any additional handling charge that Trusts may wish to apply. Providers are not obliged to order devices for non-nhs England patients via the ZCM, if they choose to, then there is a 5% mark up for private patients with charges for cross-border and other charge-exempt patients remaining at the same price charged for NHS England as detailed above. We do not think that an additional 3.49% is unreasonable but please do feed back if this presents an issue with regard to your current costing model for private patients. Please note that to enable us to consider any issues fully we would need to understand the current charging arrangements and mark-up currently in place. Q1.4: Do most Trusts have systems in place to already provide baseline data and pricing information? Where a Trust doesn't have a system in place, will there be guidance/advice on how to get all the information required or will best 2

3 practice be shared? The completion of this reconciliation could be an admin burden. (New) A: Providers should already be completing the current MDS/ ACM with patient level information. The new FRP template actually requires less information to be entered by Trusts. This is because this is a different operating model and we need to work together to ensure that (i) payments made to NHS Supply Chain reflect orders made by Trusts (ii) any HCTEDs used on non-nhs England patients can be recovered (iii) stock, damages and expired items can be properly accounted for (iv) there is a "back-check" process in place to ensure there is no additional costs to the NHS as a whole. We recognise that the current MDS is poorly completed by some Trusts, mainly due to the inability to easily enter the product details (e.g. product code and description). As these details will be pre-populated in the template by NHS England, the data being added by Trusts should be easier to complete (e.g. if the item has been used and if so on which patient). Early conversations with Trusts have indicated that the template looks relatively straight-forward to complete, but internal processes may need to be adapted. As month 11 was the first month the FRP was introduced, there may well be issues raised which we will need to address as they arise. Trusts that are struggling to complete the information should discuss this with their local specialised commissioning hub as soon as possible so we can identify a way forward. Q1.5: How will changes, amendments and/or additions associated with the FRP be communicated to Trusts? (New) A: The FRP has been designed to be as open and transparent as possible. The HCTED templates have been separated into "tracking categories". Category A covers the actual device and is to be tracked at an individual patient level. Category B covers high cost ancillary products and is also tracked at individual level. If one of these items was returned and credited in full, then the item will be netted off. If an item subsequently receives a partial credit due to a price change then this will be shown on a separate tab in the template together with any rebates received from suppliers. Credits and rebates are included in the template for information only and Trusts are not required to enter any further details. Other lower cost ancillary products are included at a summary level only. Category C are medium cost ancillary products and the opening stock will automatically be reduced for any credits received. Category D covers low cost consumable items (e.g. BCHI batteries) which are not tracked. Any new columns added to the FRP will be pre-populated items requested by providers in order to support the completion of the file. Q1.6: Will the FRP file be cumulative such that any additional data entered will remain the following month? (New) A: Yes. Once the process is up and running, and assuming Trusts are able to meet the monthly timetable for returning the files to GEMCSU, any rows which were entered as "in stock" will be transferred to the following month's file. Similarly, rows where the patient details were unable to be validated by GEMCSU due to timing (e.g. because the patient hadn't been discharged), will be added to the following month's file. 3

4 Trusts will then be able to add any additional information rather than having to reenter data. GEMCSU will need to remove the NHS Number and replace it with a pseudonymised number, but each row has a unique ID, so Trusts will be able to link the row back to the previous month's file if required. Rows for devices or high cost ancillary products will continue to be transferred onto the current month's file until validated or written-off. Q1.7: For Sacral Neuro Modulation I understand that all ordering will be via NHS England, but will we then get a recharge for CCG commissioned devices that we have to charge onto CCG? (New) A: The contractual and payment responsibility for all spinal cord stimulator devices moves to NHS England from 1 April 2017 so there will not be any necessity to cross charge CCGs from This is a pragmatic solution aimed at removing some of the current issues in the system and moving to a consistent charging arrangement. It does not change the commissioning responsibility which remains with CCGs for regional pain management centres. There will be a requirement to recharge any SCS ordered via the ZCM and used before 31st March 2016 where the device has historically been charged to CCGs. Q1.8: Can you please define the Categories within the Tracking Category column of the FRP? (New) A: The tracking categories are relatively straight-forward as follows: Category A are the actual devices Category B are individual high cost ancillary products costing c 1,000+ (excludes ICD leads) Category C are medium cost ancillary products between c 200 and 1,000 plus ICD leads Category D are low cost ancillary products less than c 200 Category E are credits received from suppliers via NHS Supply Chain Category F are rebates received from suppliers via NHS Supply Chain Category A and B items are tracked through the FRP at individual patient level. Category C items are tracked at a summary level including identifying levels of month-end stock. Category D items are treated as consumables and are not tracked. They are only included so that any non-nhs costs can be identified and recovered. Category E & F are provided for information only. Whilst we have tried to appropriately allocate each product to a tracking category, please do feed back if you think an item has been incorrectly mapped. Q1.9: Should there be an option for 'did not receive' in the monthly drop down of the FRP? (New) A: If any delivery of a device or a product is missing, it needs to be reported as a discrepancy to NHS Supply Chain customer services. The reporting of missing devices is very important as it allows: NHS Supply Chain to reorder the devices so that the Trust is not left without stock to process a credit to NHS England to make sure the NHS isn t being charged for devices that aren t being delivered, ensure that payment for the device not delivered is not made to a suppliers, and; it allows the monitoring of supplier service levels for active management. 4

5 An additional option has been added to the drop-down list so that items not received can be identified. Column W now has four options as follows: Received, Not Received, Returned (damaged) and Returned (ordered in error). Q1.10: How would you ascertain the national threshold value for stock losses/damaged items? (New) A: We will aggregate the total cost of damages from all the individual provider FRP templates and the cost of stock losses by comparing the FRP returns with the physical stock take. An average will be calculated overall and then compared to each Trust. This will be on value of items not number. Early conversations with Trusts have indicated that items are damaged very rarely, so in reality, this may not be an issue, we do need to cover the eventuality in the FRP from the outset. Operating a threshold model was agreed as the most pragmatic approach. We need to ensure that damages and stock losses continue to be kept to an absolute minimum and are not impacted by the change to the operating model. Q1.11: How frequently will Providers receive the FRP file? (New) A: This is a monthly process. The February FRP templates were cumulative for all orders placed via the ZCM and delivered up to the end of February 2017 and the May FRP templates included orders delivered between March and May. Once established, Trusts will receive their FRP templates by working day five following the period end. Q1.12: How does the monthly process link with only requiring an annual stock take? It sounds like to complete the returns each month will require a monthly stock take which may not currently take place? The level of detail is far more than all our current areas would be working to. (New) A: We will need to agree a pragmatic approach. We are aware that some Trusts have already started to implement monthly stock checks for very high cost items in areas such as cardiac. In this case, the monthly FRP templates can be compared to ensure the number of individual rows without patient details (e.g. assumed to be in stock) are in line with actual levels of stock. The rows in the FRP template are not specific to an individual device. For example, if five Spinal Cord Stimulators all with the same product code have been ordered in the month and one was carried over from the previous month, then there will be six identical rows of data. If the Trust has procedure details for four, then the first four rows of data should be completed and it can be assumed that two are therefore held in stock at the month end. This can be cross-checked against the physical stock check when available. As this is a brand new way of working, if there are issues, then please do let us know so we can agree a way forward. Q1.13: If a device is used in March, but the patient isn't discharged until April or later, won't this give you an issue with stock valuation if you don't recognise the usage until the CSU can validate? (New) A: Historically, some providers have only charged for the device once the patient has been discharged, others have charged in the month of use and some have charged based on items paid for in the month from the Trust ledger. Where Trusts have been charging on discharge, the costs may have been included in the end of year WIP charge. We need to standardise the approach of when to recognise costs in I&E and this will be at the point of usage. Therefore we will adjust the charge from NHS 5

6 Supply Chain for items held in stock at each month end, but account for all other items. Items will remain on the monthly FRP until they have been validated by GEMCSU or agreed to be written off. Q1.14: Will Trusts be required to submit stock information per Trust? Will there be an opportunity for Trusts to submit stock information per site i.e. one Trust but two sites? (New) A: Trusts will be issued with a pre-populated stock-take sheet just prior to the formal stock-take on 31st March. Trusts can copy the sheet as required and complete separate sheets for different sites or categories if it is easier. It would be helpful if all the sheets are returned to the central team together but they can be collated at the centre. If Trusts wish to carry out any intermediate stock-takes, then pre-populated forms can be issued as required. Q1.15: Why is there a 5% on cost for private patients? Is NHS England proposing the 5% mark-up for devolved administrations? In addition, overseas (chargeable) must be charged at NHS rates, so presume the 5% does not relate to cross-border and overseas visitors? (New) A: Please also refer to Q1.3. The additional mark-up of 3.49% is only being applied to private patients. All other non-nhs England patients including cross-border and overseas visitors will be charged at the same mark-up of 1.51% that is applied to NHS England devices. This is to cover the running costs of our procurement partner, NHS Supply Chain. There should be no issues with cross-border commissioners as the cost charged onto them is the same as charged to NHS England commissioners. If Trusts do experience difficulties with cross-border organisations, these should be fed back to NHS England so they can be managed centrally. If there is a strong view that the 3.49% would be disproportionate for some of the very high cost items then we could look at reviewing this. Please discuss this with your local hub in the first instance. Q1.16: Is it possible to self-declare that we undertake no private or non- English work? (New) A: All tracking Category A (devices) and B (high cost ancillary products) need to be tracked at patient level irrespective of whether they are all NHS England costs or not. There is likely to be c 0.5bn spent via the ACM once it has been fully implemented and we need to be assured that the cost being reimbursed to NHS Supply Chain is in line with items ordered. We also need a "back-check" process to ensure that we have fully accounted for the costs and we are not adding costs to the system as a whole. Therefore it will not be necessary to self-declare this status as the patient level data will provide this information accordingly. Q1.17: Charges for out of England or private patients must have to be on discharge, not on date of procedure (currently NHS England is only recharged on discharge)? (New) A: Please also refer to Q1.13. Trusts do not currently operate the same process for when an item is charged onto commissioners. Some economies have historic arrangements to only invoice on discharge as this is when the patient detail can be validated. The new operating model means that NHS England is now paying for the device at the point of order rather than use, so we need to account for the total cost but transfer the value of stock to the balance sheet. Historically, Trusts would have been incurring the cost of devices at the point of use even if the commissioner was 6

7 being charged at the point of discharge, so there should be no financial impact on providers if NHS England charges all patients at the end of each month based on usage rather than discharge. Q1.18: Regarding the FRP document, rib fixation plates are usually only used for MT patients with IS score>9, so wouldn t these all be NHS England s responsibility? (New) A: This is a new category of HCTEDs, so we need to be pragmatic. Any costs previously charged to commissioners would have been agreed locally and from discussions with a few Trusts where this has happened, the charge has been to NHS England. Therefore it is most likely that the costs have either been passed on to NHS England or included in the MT tariff charges. In future, we will liaise with the NHS pricing team to understand the reasoning behind any proposed changes to the list and where costs would have previously been included (if at all). Q1.19: Can you please explain section 10 of the FRP "Charging providers for damaged/expired items and stock losses"? It is not an overhead in reference costs, they are excluded. (New) A: Technically, you are correct and Trusts should be absorbing the cost of damaged items. As we have started to migrate Trusts over to the new ZCM, it is becoming apparent that there is a variety of charging arrangements in place. Some Trusts are recovering the cost of damaged items or stock losses either indirectly or directly from commissioners and some are absorbing the cost. We are looking to standardise the process and make this more transparent and fair across the board within an efficient process. At the moment, we don't know what the overall cost to the NHS as a whole is and our primary concern is to ensure that Trusts continue to manage stock in line with current best practice and that the overall cost to the NHS does not increase. Q1.20: How should we deal with NHS patients who don't want their information sharing i.e. where we can't pass on their NHS number? (New) A: Where the NHS number cannot be provided, a local ID can be entered instead as GEMCSU will still be able to validate against the number. If it is not possible to include any patient ID, then providers should use the Provider comment box to explain. Q1.21: It was our understanding that we would receive catalogues every six months, with pricing, so that Trusts can recharge appropriately for private patients, for example? (New) A: The original plan was indeed to issue a priced catalogue every six months to enable the quotation of non NHS England patient procedures and enable stock evaluation for insurance purposes etc. as the cost of the devices would be 0 to NHS Trusts. In refining the FRP process that has changed and the decision has been made to include the actual purchase price for devices within the FRP documentation which is sent monthly to Provider Trusts. This means the need to provide a priced catalogue is redundant as the Trust will have the actual and most up to date device price, available to them on a monthly basis - a more timely solution that was originally planned. Q1.22: Where within the Trust, will the FRP form be sent through for completion? (New) 7

8 A: NHS Trusts should provide an address to their local NHS Specialised Commissioners. This will then be used to forward the file to by working day five each month. Q1.23: Are you expecting Trusts to charge a margin? If so, will NHS England also take the margin for non-nhs England patients? (New) A: Devices orders via the ZCM are only charged onto Trusts for non-nhs England patients so the costs can be recovered. The margin included in the cost is effectively part of the cost of the device and will be passed on to Trusts who should in turn also pass the cost on. The margin covers the cost of NHS England's partners, NHS Supply Chain, as they are not an NHS organisation. NHS England covers the costs for NHS England patients, although once the programme is fully operational, it is expected that the savings driven via the central procurement model will more than compensate for the additional margin (see Q1.3). Q1.24: Does lost stock include stock that has expired? (New) A: Lost stock and expired stock are being recorded separately but are treated the same in terms financial accountability. Under the old system, the value of stock losses and expired stock across the whole of the NHS was unknown. The new process provides an opportunity to compare Trusts and look at where best practice in terms of stock management could be shared. It is unlikely that we will see any expired or lost items until at least the end of 2017/18 as this is a new process. Q1.25: If Trusts exceed the 5% threshold for losses or damages on what commercial basis will they be charged? NHS England contracted price or list price? (New) A: Any charges back to Trusts for costs exceeding the 5% threshold will be based on the prices paid via the ZCM. We are expecting Trusts to continue with good stock management processes which include stock swapping for items approaching expiry dates. There is an opportunity to work together to look at how we can manage stock as effectively and efficiently as possible across the NHS. Q1.26: Can the HCTED expiry date be included on the FRP? (New) A: At the moment this isn't possible as this information isn't held by NHS Supply Chain. We are looking at adding the serial number if it can be provided by the individual suppliers and if this is possible we can look at the possibility of adding the expiry date too. Theme 2: Ownership of responsibilities Q2.1: To avoid extra administrative burdens on Trusts, can prices be included on the FRP file? This will enable Trusts to accrue for the costs of devices relating to non-nhs England patients (e.g. private or cross-border patients) without having to cross reference with the six-monthly price list that is to be sent out and removes the risk of new products not being on that list and so not knowing what prices are. (New) A: Following early feedback we have amended the final template slightly. A final "Example Provider Reconciliation File" has been established and distribute so providers who have not yet migrated can see what the final template will look like (available on request). The individual tabs still include the cost of the device (excluding mark-up) but we have also included a Summary page, which includes a calculation to show the total cost of recharges (including mark-up) back to the Trust for non-nhs patients. Trusts can see the formulae and therefore the mark-up added. 8

9 Q2.2: Which department is responsible for managing the FRP at the Trust? (New) A: How the FRP is completed is up to each individual Trust. The FRP contains the Requisition Point, so could be shared internally with each department completing their own section. There does need to be a single co-ordinator with each Trust to receive the file from NHS England and then send onto GEMCSU once complete. Q2.3: Can you please confirm that providers are not expected to complete columns AM-AP on the step 3 Cat A&B spreadsheet? (New) A: Columns AM-AP (now AV-BA due to additional pre-populated columns being added) are for GEMCSU to complete rather than Trusts. Q2.4: Who will be liable for damaged or stolen devices? A: The liability for damaged or stolen devices is dependent on who owns the stock. Stock that Trusts currently own and will use until depleted, when they will then order from the new ZCM is the responsibility of the Trust. Ownership of the supplier-owned stock e.g. consignment, will be the responsibility of either the supplier or the Trust, dependent on the consignment agreement. Effective stock management is an important element of Trust operations and this will not change with the new arrangement. Theme 3: Scope and timings of the HCTED Programme Q3.1: Does the initiative include devices within the National Tariff or those commissioned by CCGs? (Updated) A: From , all HCTED categories have been nationally agreed as either the payment responsibility of NHS England Specialised or CCGs. The following table details which categories are NHS England Specialised and which are within the scope of the ZCM. Device Category Responsible Commissioner* Within Current Scope of ZCM ** 3 dimensional mapping and linear ablation catheters used for complex cardiac ablation procedures NHS England Yes (live) Aneurysm coils NHS England Yes Bespoke orthopaedic prostheses NHS England Yes Biological mesh, including synthetic equivalents CCGs N/A Bone Anchored Hearing Aids NHS England Yes (live) Bone Growth Stimulators NHS England No Carotid, iliac and renal stents NHS England Yes Lengthing nails for Limb Reconstruction and Circular external fixator frame NHS England Yes (live) 9

10 Consumables associated with per oral single operator cholangioscope Deep brain, vagal, sacral, spinal cord and occipital nerve stimulators Devices used in connection with pulmonary artery banding CCGs NHS England NHS England N/A Yes (live) No Drug-eluting peripheral angioplasty balloon NHS England No Endovascular stent graft NHS England Yes Flow diverters for intracranial aneurysms NHS England Yes ICD (Implantable Cardioverter-Defibrillator) NHS England Yes (live) ICD with CRT (Cardiac Resynchronisation Therapy) capability NHS England Yes (live) Insulin pumps and pump consumables CCGs N/A Intracranial stents NHS England Yes Intrathecal drug delivery pumps NHS England Yes (live) Maxillofacial bespoke prostheses NHS England Yes Occluder, Vascular, Appendage and Septal devices NHS England Yes (live) Pacemaker extraction sheaths CCGs N/A Percutaneous valve repair and replacement devices NHS England Yes (live) Peripheral vascular stents NHS England Yes (live) Radiofrequency, cryotherapy and microwave ablation probes and catheters NHS England Yes (live) Rib Fixation Plates NHS England No * NHS England means NHS England Specialised Commissioning and CCGs means CCGs, Health & Justice and Armed Forces ** As at 1st July 2017 Q3.2: Do we know if ICDs will be within or excluded from the National Tariff in 2016/17? (Updated) A: Whilst there was an initial view from the NHS Pricing team that ICDs should move back into tariff for 2016/17, this was not taken forward and ICDs continue to be a HCTED category. 10

11 Q3.3: What happens if the HCTEDs my Trust uses are no longer procured through the ZCM? A: The focus of the project from April 2017 is to maximise the benefits for the NHS from aggregating all its demand for the current range of high cost tariff excluded devices. Within this initial stage, we are not looking to reduce the current range of available devices, indeed one of the potential additional benefits from this project is the ability to facilitate the timely adoption of cost effective new device technology into the NHS. In the longer term when we have the data to gain a more granular national understanding of device usage it is reasonable to expect that we will, through industry, our clinical advisors and reference groups, review all potential options to deliver greater benefits for the NHS. Q3.4: Will we be able to order new products as they come to market? (Updated) A: Yes. The electronic catalogue, which is currently being validated by suppliers to ensure completeness, will be updated with new products on an on-going basis, where the new product introductions are in line with procurement process and commissioning policies. Q3.5: Does this arrangement cover non-specialised patients such as private patients or overseas patients? (Updated) A: It is only mandatory for devices which are in-scope of the ZCM and where NHS England is responsible for payment to be ordered via the ZCM. However it is recognised that for pragmatism, providers may wish to order all devices within scope via the ZCM. The recharging arrangements for non-nhs England patients (overseas, private, cross border etc.) are covered in the FRP (see Q1.3). Q3.6: Does this arrangement include all the products associated with a device that I currently purchase and recharge through the pass-through process? (Updated) A: Historic charging of devices via pass-through from providers to NHS England has been inconsistent. Some providers have charged each individual element of a device, some have charged an average or bundled price, and some have included accessories or associated items as an uplift. Other associated items have historically been provided by the device manufacturer as free of charge with the cost added to the cost of the device. NHS England and NHS Supply Chain are developing a process to ensure all items currently available/added to the ZCM catalogue are appropriately classified as HCTED items with a consistent application for all Trusts commissioned to provide each HCTED service. This will take some time to finalise as there is no standard definition of what is included in a HCTED category and some items are relatively new. We will communicate any changes as they are finalised. Q3.7: Does the new arrangement cover the stock already paid for by Trusts and if so will NHS England be buying this stock? (Updated) A: No. Existing stock purchased by Trusts should be charged to commissioners as it is used through the pass-through system following the existing reimbursement process. Once migrated over to the new system Provider Trusts should run this stock down and will continue to receive reimbursement by NHS England using this existing method. Provider Trusts should continue to record the value of stock on their balance sheet 11

12 as it reduces and until it has fully depleted. At this point, stock held in the Trust will have been replenished by the new transactional model and paid for at point of order by NHS England. The levels of stock held and products used will be understood through the new FRP. Q3.8: Is migration to the ZCM mandatory? A: Yes. All HCTEDs covered by the ZCM will be sourced through the centralised supply chain arrangement. The National Tariff and NHS Standard Contract guidance were changed in 2016/17 to provide the regulatory framework to facilitate this change. Non-compliance with the requirements of this initiative would ultimately result in a breach of contract and non-payment. This is a transformational initiative with NHS system-wide support and following dialogue with advisors and Trust colleagues, NHS England is implementing a phased process of collaborative transition. Trusts should expect to be contacted in advance of implementation by NHS Supply Chain. Trusts will be requested to nominate a lead contact point (Trust Champion) and arrange an introductory meeting with NHS Supply Chain. Through collaborative dialogue a bespoke implementation plan is then developed for each Trust based on existing contractual commitments and systems. Q3.9: What are the implications of the changes to the HCTED list proposed in the 2017/18 Tariff Engagement Document (TED)? A: The TED considers the removal of 11 high cost device categories from the excluded list. The Further Policy Development Document states that: We will look to ensure that changes to the high cost devices list are appropriately aligned with NHS England procurement policy The final published consultation document recommends that the nine categories outlined below that are covered by the centralised supply chain will remain on the high cost device list for 2017/18/19: 3D mapping and linear ablation catheters used for complex cardiac ablation procedures Aneurism coils Carotid, Iliac and renal stents Deep brain, vagal, sacral, spinal cord and occipital nerve stimulators Endovascular stent grafts Flow Diverters for intracranial aneurisms Intracranial stents Percutaneous valve repair and replacement devices Peripheral vascular stents Follow up note on bifurcated stents We introduced a new category of bifurcated stents onto the list for the TED, as we wanted this type of stent to remain on the high cost list, whilst removing others into the scope of tariff. As we are no longer moving stents into tariff, we do not need to separately identify bifurcated stents. Although the category will not appear, they will remain on the high cost list under stents. Q3.10: Why do I need to provide my Trust baseline data? A: Trusts baseline data has two important uses. Firstly, the provision of your Trust baseline usage and pricing data in a consistent, transparent and coordinated way will provide the visibility and understanding required to benchmark NHS national pricing, inform our procurements and develop an informed national savings road map. 12

13 Secondly it will help us ensure that we do not pay higher prices during the transition period prior to the completion of new national procurements. Q3.11: Can we have access to the list of products that will be available by supplier and device type under the new system? A: Yes. Please contact your Implementation Manager or for the latest copy. It should be noted that the catalogue is constantly evolving as new products become available. It should also be noted that the latest catalogue is signed off with each Trust prior to them going live as part of the implementation process to ensure service continuity. Q3.12: The commissioning intentions were published on 30 September 2015 and state that Provider liabilities for contractual volume commitments entered into prior to 1st October 2015 would be honoured as part of transition plans. This only appears to be one days notice, is that correct? (Updated) A: This is being confirmed by the HCTED programme team. Advice will follow as soon as it is available. Q3.13: What happens with contracts that were put in place before 30 September 2015 that run beyond 31 March 2016? A: In line with the commissioning intentions and the NHS Standard Contract 2016/17, NHS England will be honouring the terms of existing supply agreements entered into prior to 1 October 2015 pursuant to a lawful procurement process.* We understand that there may be some arrangements that do not fully meet all of the expected requirements but are based on what could be considered a legally binding agreement with a supplier. These should be discussed with the Implementation Team to ensure that we fully understand all future volume commitments that have been made. We also recognise the potential commercial sensitivity regarding the sharing of contractual arrangements. If a Trust has any issues with sharing this information with NHS Supply Chain then NHS England will liaise directly with the Trust to facilitate the required level of disclosure to enable the dispensing clauses in the National Tariff and NHS Standard Contract regarding existing contracts to be enacted. * The tender process should have followed relevant EU procurement legislation and show fair, transparent and equal treatment towards all suppliers. Depending on the value of the tender it should be searchable on Tenders Electronic Daily and/or Tenders Direct and have an OJEU reference number. Q3.14: Are all Trusts being transitioned to the new arrangement at the same time? (Updated) A: The initial plan was to migrate a first wave of 57 Trusts. These Trusts have the highest annual expenditure plans for HCTEDs and account for 91% of total expenditure. We have been approached by a number of wave two Trusts wanting to migrate quickly, and where this has been possible we have done this. NHS Supply Chain is engaged with all known NHS Provider Trusts commissioned by NHS England and is working to migrate all trusts and categories as soon as possible to the new HCTED operating model. Q3.15: Are all categories being transitioned to the ZCM at the same time? 13

14 A: This will depend on the categories of devices a Trust uses, when current contractual volume commitments end and the Trust specific implementation plan. In general terms it is expected that bespoke devices (see Q3.20) and outsourced arrangements (see Q4.7) will be transitioned later in the process. Q3.16: Does NHS England have a list of those suppliers happy to transfer to the ZCM? (New) A: Categorically all suppliers will support this programme. We've had extensive industry engagement going back to April 2016 when the announcement was made around the ZCM. All suppliers have to transfer to the ZCM in 2017, in line with the FRP going live 1st April The cardiology super tender will pick up 11 of the 17 areas under the ZCM. We believe we have a road map. Indeed, an element of the implementation managers' role, as part of their pre-implementation survey assessment is to work with the Trust Champion to map out a detailed OJEU specific scenario for each Trust. To be very clear, we re not talking about procuring under an OJEU reference, this is about exceptional procurement that has led to a contractual commitment with industry. It tends to be a little bit more complex in terms of making sure the commitment can be maintained under the NHS Supply Chain framework, essentially it relies on NHS England, the Trust in question, NHS Supply Chain and the originating procurement organisation to contract manage that scenario and ensure the contractual commitments are met. So effectively there are no barriers and there are no suppliers within industry that don t support this programme. Q3.17: Is Trust usage data being taken from the PPIB tool or expected separately as well? (New) A: The Purchase Price Index and Benchmarking (PPIB) tool is the tool introduced by NHS Improvement and accessed via NHS BSA and not NHS Supply Chain. It should be noted that NHS Supply Chain is required to obtain the specific Trust provided baseline data of the supplier 'invoiced prices', so that the savings can be calculated based upon that information, in accordance with the rules and guidance that outline NHS BSA as our regulator. Q3.18: Will all HCTEDs be included in the NHS Supply Chain catalogue? A: Yes, they are already visible within the NHS Supply Chain catalogue, and on our website, albeit at a price which is either the national framework or a Trust bespoke price if they currently purchase from NHS Supply Chain. The codes won't be visible yet at zero cost because they are switched on and during the implementation of an individual Trust and category so that we can make sure the change management aspect is completed correctly, Trusts don't start ordering products and continue to recharge NHS England too and that we feedback to NHS England details of Trust migration. If you would like to know which product lines are within each category we can provide that prior to or during your migration and this can be requested by ing implementation@supplychain.nhs.uk. During the implementation the baseline data provided is also used to ensure that any products which a Trust uses within a category, is setup and available prior to going live. That includes all ranges and sizes that may appear within a range etc. This is to make sure that when a category goes live, there isn t a possibility products required 14

15 not being available on the system. NHS Supply Chain works to ensure that a full and comprehensive catalogue is available prior to go live. If new ranges become available, for example through innovation, they can be set up as required. Q3.19: Can you confirm the deadline for migration? (New) A: The deadline for migration will be specific to each trust and each category subject to permitting circumstances i.e. if both parties agree there are no barriers to migration then a shorter timeline will be agreed accordingly. Equally where there may be instances where a longer timeline may be required this will be clearly signed up to by both parties. The expectations and agreements will be subject to the normal NHS Standard Contract guidance on contract management. We are mindful we need to manage the change process around the cutover to the new ways of working and therefore we would expect Trusts to be actively working towards the ZCM and to support the programme as part of the wider collaboration. Q3.20: Are bespoke devices included in the new arrangement? (Updated) A: Yes. We understand the complexity of the production, procurement and supply chain for bespoke orthopaedic and maxillofacial orthopaedic prostheses, and endovascular aneurysm repair devices (EVAR). It is our intention to work strategically with industry, clinical reference groups and Trusts to ensure these devices are effectively transitioned into the new arrangement and the scope of these very complex categories is fully understood Q3.21: Pending the transition of bespoke devices to the new arrangement, please confirm that we should continue to recharge the cost of bespoke devices to NHS England. When will the new arrangement for bespoke devices be in place? (New) A: Bespoke devices within orthopaedics and EVARs remain in scope and are part of the 17 HCTED categories. These devices are very complex with each Trust having a different way of ordering and each supplier having a different way of ordering, manufacturing, delivering and a separate pricing structure. As part of the engagement and implementation with Trusts, each process with suppliers is mapped. We are more advanced with some trusts than we are with others and more advanced with some suppliers than others. It is the intention to work strategically with industry, clinical reference groups and Trusts to ensure these devices are effectively transitioned into the new arrangement and a national solution for purchasing bespoke devices is created and implemented. While processes are finalised and Trusts are migrated, Trusts can continue to purchase as they are and recharge to NHS England in the legacy pass through method. Q3.22: When are we expecting to see the first wave of up to date pricing catalogues? (New) Trusts will be able to see the cost of items ordered via the FRP template which should be with Trusts by working day 5 once the FRP process is up and running. Catalogues can be requested from local supply chain implementation managers. Q3.23: Will BCHI maintenance agreements be honoured through the ZCM? (New) A: BCHI Maintenance Contracts are not a HCTED and Trusts should continue to order and recharge the costs back to commissioners as they have previously done. 15

16 However, it has become apparent that it may well make sense to include BCHI Maintenance Contracts and potentially BCHI repairs within the scope of the ZCM. This is currently being evaluated by NHS England. Further updates will be provided directly to BCHI commissioned providers in due course. Q3.24: There are 28 HCTED categories but why are only 17 in scope for ZCM? (New) A: Currently, the project only relates to specialised services. The IRs have changed for and devices are now either categorised as "Specialised" or "Non- Specialised". Four of the final 26 HCTED categories relate to Non- Specialised (Insulin Pumps, Biological Mesh, Consumables for Single Operator Cholangioscope and Pacemaker Sheaths). Aneurysm coils and flow diverters are covered by one category in the ZCM. There are 3 devices which remain specialised but currently out of scope of the project (Bone Growth Stimulators, Pulmonary Artery Banding devices and Drug Eluting Angioplasty Balloons) and the final category of Rib Fixation Plates was a new addition to the list in and is under consideration. Q3.25: Where Trusts try to refurbish certain devices, can we have agreement to continue with this practice and charge NHS England (as Trusts currently do) through the pass-through route given this won't be possible through the ZCM? (New) A: The policy for the refurbished HCTEDs is currently under review by the NHS England National HCTEDs Programme Team. Advice will follow as soon as it is available. Please continue with current recharging arrangements until notified. Q3.26: Is there a clear policy over recharging for lost aids? (New) A: The policy for the recharging for lost aids is currently under review by the NHS England National HCTEDs Programme Team. Advice will follow as soon as it is available. Q3.27: My supplier tells me that because of the HCTED program they are going to remove consignment stock, is this true? (New) A: The policy for consignment stock is currently under review by the NHS England National HCTEDs Programme Team. Advice will follow as soon as it is available. In the interim, the current arrangement of consignment stock should not change as suppliers have committed to continue to provide consignment stock, as they always have, until the national review of consignment stock is complete. Q3.28: What is NHS England's policy on managed services in relation to the ZCM? (New) A: The policy for managed services is currently under review by the NHS England National HCTEDs Programme Team. Advice will follow as soon as it is available. Where there are managed services already in place, current arrangements for charging costs to NHS England should continue. Q.3.29: Can sale or return or supplier stock boxes be used? (New) A: Yes. Supplier sale or return and stock boxes can be used and the process of how to order will be discussed with a trust as part of their implementation. The process works very similarly to how Trusts operate now, with an order for a box of kit being made "off system", devices used, the box returned and a system order 16

17 raised to invoice for the goods used out of the box. The order is referred to as an "INVOICE ONLY" order as no delivery is required to replenish any stock on shelves. Theme 4: Operation of the HCTED programme Q4.1: What guidance is there to support the implementation of the new arrangement? A: Six months formal notice of the new arrangement was given in the commissioning intentions published on 30 September This has been reflected in the 2016/17 National Tariff Payment System and the NHS Standard Contract 2016/17. The 2016/17 National Tariff Payment System sets the price payable for devices based on the new arrangement and the NHS Standard Contract 2016/17 contractually mandates the new arrangement. Q4.2: What happens during the transition period before the new model is implemented? A: Devices should be ordered under the current arrangements whilst providers are transitioned onto the new arrangement. The cost paid for these devices will be reimbursed under the pass-through process as per the 2016/17 National Tariff Payment System. Any Providers experiencing any issues operating their current supply arrangements during the transition, please contact us and we will support your discussions with suppliers if required. Q4.3: Will I still be reimbursed for devices used if I am out of contract and awaiting implementation to the new model? A: Yes. If you experience any issues in sourcing devices during the transition period please contact your NHS Supply Chain implementation manager and we will support your discussions with suppliers if required. Q4.4: What will NHS England do with the savings generated from this arrangement? A: The current and expected growth in expenditure on high cost tariff excluded devices far exceeds the growth in the NHS budget. This arrangement is an important part of the arrangements being put in place to sustainably meet the requirements of our patients within available resources. The expected savings from this arrangement have been incorporated into our financial plans to support the improvement of services in 2016/17 and beyond. Q4.5: Will the new arrangement impact on supplier rebate schemes? A: No. All suppliers who operate rebate schemes within their prices will be incorporated into the new arrangement. Where rebate schemes are incorporated into contracts that run past 31 March 2016 Trusts should continue to invoice NHS England for reimbursement of the cost of the product, any rebates and / or discounts received under the terms of that contract, and should be commercially neutral for suppliers and the NHS. Q4.6: Historically we have aggregated in-tariff and national tariff excluded devices spend from the same supplier and secured overarching financial benefits for our Trust. In some instances, these benefits are hard to then break 17

18 down and attribute to specific device categories e.g. where a rebate applies to the Trusts total spend. Isn t there a risk that these benefits to the NHS will be lost? A: NHS England is working closely with the NHS BSA to monitor all device prices including in-tariff devices that are not mandated to transfer over to the National NHS framework agreements (see Q4.13). We are aware during the transition period, until new frameworks are in place, there may be difficulties in maintaining complex benefits schemes. We want to work with Trusts and suppliers to ensure that the full value from these incentives are achieved where appropriate. This is particularly relevant in device categories such as ICDs where contract arrangements are generally more complex. In response to this we have taken a hybrid approach. Clearly, where we have available frameworks that can immediately offer improved value for the NHS, we will migrate Trusts straight away. Where a complex benefits scheme may offer better value we are working with Trusts, their suppliers and procurement partners to fully understand the options available. Where appropriate and possible we will look to migrate existing complex arrangements that add value into the ZCM when the new framework is implemented at the start of the 2017/18 financial year. Q4.7: Some suppliers have expressed concerns that NHS England will expect better prices for HCTEDs from aggregated demand whilst Trusts will expect to maintain the full range of benefits they received when they procured both intariff and tariff excluded devices. Is it possible for NHS England to clarify this situation? A: The answer to this question should be read in conjunction with Q4.6. NHS England is looking to improve the value that the NHS achieves from its significant annual investment in high cost devices by aggregating demand and wherever possible reducing the cost to supply the NHS. We will actively work with the market to develop national volume commitment, improve clinical effectiveness and adopt new effective technologies. NHS England does not want to see price reductions in tariff excluded devices being driven by price increases in in-tariff devices. NHS England understands that Trusts, procurement hubs and collaboratives will continue to drive value for the NHS from procurement activities for in-tariff devices. The expectation is that Trusts will continue to work with suppliers to balance commitment and value and this may include complex deals. In future these complex local deals should just relate to commodities that the Trusts are procuring. Importantly, understanding the detail and breakdown of your agreements, enabling complete transparency, will allow us to help you work this through with your suppliers. Q4.8: What if prices go up? A: The intention of this initiative is to maximise the buying power of the NHS for high cost tariff excluded devices. Our analysis shows that savings can be made by moving onto prices currently available under existing frameworks. When we have robust data we will put new frameworks in place which realise the benefit of aggregated NHS demand. This should further reduce the average price paid by the NHS. 18