EXECUTIVE COMMITTEE PAPER HERTFORDSHIRE & SOUTH MIDLAND FOOTPRINT OF CENTRAL MIDLANDS PERSONAL MEDICAL SERVICES (PMS) REVIEWS

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1 EXECUTIVE COMMITTEE PAPER HERTFORDSHIRE & SOUTH MIDLAND FOOTPRINT OF CENTRAL MIDLANDS PERSONAL MEDICAL SERVICES (PMS) REVIEWS LEAD DIRECTOR: Dominic Cox, Commissioning Director AUTHORS: Lynn Dalton, GP Contract Manager DATE: April Introduction and Executive Summary: NHS England directed Area Teams to undertake a programme to review all local Personal Medical Services (PMS) contracts and complete the review process by March 2016 at the latest. One of the purposes of this national review is for NHS England to consider how to apply the principles of equitable funding to PMS resources. The national data collection exercise identified that the premium element of PMS expenditure nationally is 325 million. That is the value of how far PMS expenditure exceeds the equivalent items of General Medical Services (GMS) expenditure. This means that NHS England pays, on average, a premium of for patients registered with PMS practices. The premium will reduce to around 235 million over the seven years to 2021/22, as the GMS Minimum Practice Income Guarantee (MPIG) is gradually phased out. This reduces the average premium per registered PMS patient to It is essential, that the principles of equitable funding are followed by moving towards a position where it can be demonstrated that all practices (whether on GMS, PMS or Alternative Provider of Medical Services (APMS)) receive the same core funding for providing the core services expected of all GP practices. Any additional funding above this must be clearly linked to enhanced quality of services or the specific needs of a local population, and practices should have an equal opportunity to earn premium funding if they meet the necessary criteria. A further purpose of the review is to seek to secure best value from future investment of the premium element of PMS funding by ensuring available resources for investment are deployed in line with the reinvestment criteria which should be agreed between NHS England, Central Midlands and its Clinical Commissioning Groups (CCG s) as part of anticipated co commissioning arrangements. Hertfordshire and South Midlands (HSM) footprint have 99 PMS practices Appendix 1 provides details of PMS Practice funding by CCG and locality in HSM. 1

2 In principle the criteria should be that any additional investment in general practice services that go beyond core national requirements should: reflect joint Clinical Commissioning Groups /Central Midlands strategic plans for primary care; secure services or outcomes that go beyond what is expected of core general practice or improve primary care premises; help reduce health inequalities; give equality of opportunity to all GP practices; Supports fairer distribution of funding at a locality level. The latest national guidance from NHS England (September 2014) sets out the following key principles that should underpin the PMS review process: Joint decision making relating to the future use of PMS funding are agreed jointly with CCGs as part of joint or influencing co commissioning arrangements; The joint decision making should be done with full engagement with the Local Medical Committees (LMC s) A case by case review of all affected practices to ensure that they are not serving special populations that merit continued additional funding and that they would not be unfairly disadvantaged by the changes; Any proposals to reduce current levels of PMS funding for any practices should reflect decisions on how the money freed up will be redeployed, including proposals for reinvestment of resources from Central Midlands to CCGs to support local improvement and innovation in primary care. This is to ensure that changes to practice funding reflect the overall net impact of any change, and practices don t have to manage a reduction of funding, before subsequent reinvestment; There is a need to engage with patients where changes to services are proposed which result in different services being available to patients; Any resources freed up from PMS reviews should always be reinvested in general practice services (the new guidance also enables this to be invested where agreed in general practice premises developments). This funding will be available to all practices (GMS, PMS, and APMS providers); Except with the agreement of all the CCGs involved, PMS resources should not be redeployed outside the current CCG. (i.e. the CCG of which the PMS practice is a member); The pace of change for redeployment of funding arising from PMS reviews, unless there are compelling reasons otherwise should redeploy freed up resources over a minimum four year period it was anticipated with year one being 2014/15. The national guidance is intended to ensure a fully collaborative approach with CCGs and Local Medical Committees (LMC s) that any changes arising from local reviews are managed at a pace that does not unduly destabilize any practices. 2. Proposal and Next Steps: Prior to finalising this paper we have engaged and consulted with our seven CCG s and four LMC s to ensure we have captured their views on our proposals for PMS reviews. Engagement, consultation and support from our colleagues are fundamental to the PMS review programme. 2

3 We have also aligned the proposed PMS Review process with that already applied across the Leicestershire/Lincolnshire footprint in order to gain consistency of approach for the Central Midlands geography. Following Executive Committee approval to progress with the PMS reviews, a task and finish group(s) will be set up with each CCG or, where CCGs agree, working jointly. The suggested membership of the group is to comprise of representatives from the LMC s, CCGs, Central Midlands Primary Care Commissioning and Finance teams. 2.1 Contractual options are as follows: The two options that are already available to PMS practices are captured below (Options 1 and 2). The third option (Transitional Offer) is a choice that has been offered to PMS practices in Leicestershire/Lincolnshire and other areas of the country. Option 1 Return to General Medical Services (GMS): PMS practices have always retained the contractual right to revert/return to a GMS contract following NHS England's standard operating Procedures on 3 months notice. If a practice exercises its right, it is not entitled to a correction factor payment such as the Minimum Income Guarantee (MPIG) and PMS growth/premium income would be removed with immediate effect on return to GMS. For the majority of PMS practices such a move would make no financial sense. Option 2 Remain in Personal Medical Services (PMS): Practices can choose to remain on a PMS contract and participate in the PMS review with the expectation that they will be subject to a full review and renegotiation of their contract. PMS contracts will be locally negotiated with the contractor, CCG and Central Midlands who will jointly agree what services they want to commission from the PMS contractor. The review and renegotiation will remove any premium/growth funding that cannot be directly related to services provided over and above core General Medical Services (GMS) contract. The pace of change for the removal of funding for services that the CCG/Central Midlands do not wish to commission will be over a minimum of 4 years. The first year being 2015/16 following completion of the review with equal instalments being enacted over the 4 year period. There has been a perceived work load risk for Primary Care and CCG colleagues jointly undertaking the reviews. However early indications from Leicestershire and Lincolnshire have identified the number of practices selecting this option are lower than had been anticipated. This is helpful to note and could be reflected in the HSM footprint, which has similar number of PMS contractors. Leicestershire 48 PMS practice of which 2 have selected to remain in PMS contract Lincolnshire 49 PMS contracts of which 4 have selected to remain in PMS contracts Option 3 Transition Offer PMS practices return to GMS with transitional support: PMS Practices can opt to revert to a GMS Contract and access transitional support (please note it is recommended this is not a separate bidding process). This should be a one off, time limited offer. Under this option, recognising the current risks and issues impacting on local practices, Central Midlands will provide transitional support over the remaining MPIG period of 6 years This would have 3

4 been shown in Appendix 2 (but is currently being refreshed by finance to show list size change in April 2015, DDRB uplift for 2015/16 and prepared showing current budgets, option 1 and 3). The rationale for this option being: Impact will commence in this financial year following change to GMS contract Provides an opportunity for practices and CCGs to understand the impact and where required undertake patient and stakeholder consultation; The approach is reasonable in that the ground work can be done this year to support practices and avoid destabilising practices. If the MPIG timescale is supported the target contract value at the end of the period will be the equivalent to the GMS contract value without any MPIG (the seven year endpoint). If practices request to revert from PMS to GMS under option 3, the following will occur: The practice s PMS premium is calculated as the difference between the PMS baseline and estimated GMS endpoint (from NHSE in their letter re GMS from December 2013) of 78.33; On return to GMS, the practice s PMS Premium will be converted to transitional funding (there will be no efficiency saving from practice income); Once in GMS, the transitional funding gradually reduces on a monthly basis over a 6 year period. 2.4 Pace of Change Finance modelling the summary position (appendix 3) for PMS reviews shows: The deduction of the PMS premium in equal instalments; The model is by CCG and splits the practices between the practices will lose over 6 years. The methodology assumes PMS premium reduction from 2015/16 and over the same period as MPIG reduction. The model also assumes that Global sum will increase by 0.55 per patient each year due to MPIG reduction and list size will increase by 0.8% each year which is in line with central NHS England assumptions; No assumptions around inflation have been included in the model or any changes to Quality Outcome Framework (QOF), Enhanced Services (EHS) or Seniority. 3. Mechanism for agreeing re investment criteria The proposed PMS task and finish group will work with individual CCG, LMC s to agree a criteria for how redeployed funding should be utilised. This will be for agreeing the reinvestment of Recycled monies (net of new money i.e. excluding any Enhanced Services and QOF funding) PMS resources should not be redeployed outside the current CCG. (I.e. the CCG of which the PMS practice is a member). A case by case review of all affected practices to ensure that they are not serving special populations that merit continued additional funding and that they would not be unfairly disadvantaged by the changes. It is suggested that the MPIG outlier criteria are applied to identify and support affected practices. 4

5 4. Application process for redeployed funding The process to access redeployed funding will need to be in place before funding is reduced. The detailed process will be developed through the PMS Review Task and Finish Group. 5. Communications Plan: A joint communication will go to practices to update them on the PMS review and the process. Practices will be written to advising them the PMS reviews have commenced it will outline the 3 contractual options open to them. Practices will require an opportunity to review and consider their options with their financial accountants prior to submitting their Expression of Interest on their preferred contractual option. The minimum period a response can be requested is 28 days; in view of the need to obtain financial advice (and the learning from the Leicestershire/Lincolnshire process) it is recommended that practices are given 60 days to submit their Expression of Interest. If we assume the PMS review programme will commence in May 2015, this will give the practices until the end of July to submit their Expression of Interest (EOI) on their preferred contractual option. This will be followed by joint CCG and Central Midlands review of baseline requests and where there is ambiguity practices will require a face to face meeting and a final formal declaration of intention by the end of July/August This will leave Central Midlands and our CCG colleagues with 7/8 months in which to complete the PMS review process. 6. Risks The PMS review process should aim to ensure it does not inadvertently destabilise a practice. This will be done through the PMS task and finish group 6.1 Capacity It is clear that the capacity required to successfully deliver the PMS reviews for our PMS practices may not be secured with the existing staff complement of Central Midlands staff and will require supplementary personnel with primary care experience from our CCG colleagues and/or external support. However, if the number of PMS practices that choose Option 3 (Transition Offer) is the same level as in Leicestershire and Lincolnshire, then the number of PMS reviews required could be low, hence manageable. It is the workload associated with the pre PMS Review stage that will be resource intensive. 6.2 Expertise Reviewing PMS contracting arrangements requires a detailed knowledge of GP contracts including financial and legal expertise to distinguish the difference between GMS and PMS arrangements. Delivering successful outcomes from the negotiations will require high level project management skills and the maintenance of audit trails to ensure challenges against individual decision s or processes can be properly defended. 5

6 6.3 Sharing budget information In order to have an open and transparent process Central Midlands will have to seek individual practice approval to share their budgetary information with their CCGs and LMC s this may not be feasible in all cases and may create additional risk. It is proposed this approval will be requested at the time of seeking practices expression of interest. 7. The Executive Committee is asked to: Approve the PMS review proposals 3 options including: o The retained right of PMS contractors to return to GMS (without correction factor or transitional support) o Remain in a PMS contract and be subject to a full review o Return to GMS contract with a one off, time limited offer of transitional support consistent with the MPIG timescales. Approve the recommendation to set up a Task and Finish Group with CCG and LMC colleagues to oversee the PMS review process Approve the approach that PMS funding is redeployed in line with national PMS review guidance. Recognise the sensitivity surrounding the redeployment of the PMS funding and the management of communications with stakeholders; Recognise that there may be a risk regarding capacity of Central Midlands (Primary Care and Finance) and CCG colleagues to undertake PMS reviews within the national timescale of completion by 31 st March The full effect of this will not be known until Expressions of Interests are received on their preferred contracting option. Appendix 1 PMS Funding Hertfordshire and South Midlands by CCGs and locality Appendix 2 Currently being refreshed by finance. To show the list size change as of April 2015, and applying the new 2015/16 DDRB uplift to PMS contracts. This will be finalised in May ready to circulate to GP practices with the communication plan. 6

7 Appendix 1 PMS Funding Hertfordshire and South Midlands Funding split by CCG and locality NB it should be noted the way in which previous PCT s calculated their PMS monies varied slightly. This is reflected in the summary, which has been reviewed to ensure accuracy. 7

8 Appendix 2 PMS Financial Modelling currently being refreshed to show budgets for 2015/16, based on April list size, uplift and PMS options 1 return to GMS with no financial support to do so. Option 3 practices who wish to accept the time limited transitional option 3. Budgets for option 2 will be done on a practice by practice basis depending on the services the CCG and Central Midlands commission from the practice. 8