CCG FINANCE MONTHLY REPORT GUIDE January 2014

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1 CCG FINANCE MONTHLY REPORT GUIDE January 2014

2 Contents Page INTRODUCTION 3 Example CCG Finance report 4 1. ACUTE COMMISSIONING 6 Payment by Results (PBR) 6 Market Forces Factor (MFF) 7 Contract Adjustments 8 Hotline challenges 8 Non-Payment by Results (Non-PBR) 8 2. NON-ACUTE COMMISSIONING 9 HCT PRIMARY HEALTHCARE OTHER Locality Management Support Further suggested reading 14 Appendix 1 15 CCG Finance Team January

3 Introduction It is intended that this guidance will enable easier understanding of the financial reports issued by the CCG Finance team. If you find the information contained within this guide misleading or unclear please let us know. The purpose of this guide is to explain the CCG finance report and each locality s financial performance, what the different sections mean and how we allocate costs per line of the report. The reports are issued on a monthly basis. The time lag of the reports is broadly two months, due to the collection of data necessary to be input into the reports i.e. acute SUS data, prescribing PPA data etc. The aim is that CCG leaders and users of these guides are confident and fully understand the data sources and methodology of allocating costs. Attribution of costs Locality allocations in 2012/13 were calculated using the PBC toolkit giving each locality a fair share of the total allocation to the CCG. Two options were considered for 2013/14. The first option was to give each Locality the same uplift (2.22%) on their 2012/13 allocation, after adjustment for the items transferring into and out of the CCG allocation. A standard uplift is consistent with NHS England s decision to give each CCG the same uplift, without recognising relative opening funding positions compared to fair shares or changes in population size. The second option was to update the fair shares calculation used in 2012/13 to reflect list sizes at 1 st January This resulted in differential growth across localities, ranging from 1.86% to 3.2%, because of changes in population size and structure since last year. The options were discussed at the meeting held on 28 th March and option 1 was agreed and approved by The Governing Body at its meeting held on 25 th April There were three options suggested for allocating funds to practices: 1) The 2012/13 allocations uplifted by 2.22%. 2) A movement of 50% from historic method to Fair Shares. 3) Fair Shares. 3

4 The following methods were chosen by localities. Locality North Herts 50:50 move to Fair share 50:50 move to Fair share Stort Valley & Villages 50:50 move to Fair share Fair share/capitation Lower lea Valley 50:50 move to Fair share Fair share/capitation Stevenage Fair share/capitation Fair share/capitation Welhat 50:50 move to Fair share Baseline % Upper Lea Valley Fair share/capitation Fair share/capitation Example CCG Finance report An example of a CCG finance report is included on the next page, page 5. The example illustrates 5 practices, of different sizes, within one locality. The first row of % s shows the locality s fair share within CCG. The second row shows the practice s weighted capitation share of their locality. The headings on the left hand side of the page show headings used in CCG monthly reports for localities. Appendix 1, on page 15, details the apportionment methods used against each heading in CCG monthly reports. 4

5 Example of CCG Finance Report Year to Month 6 This Month - September YTD Actual Practice Locality Total Locality fair share 7.50% Practice fair share 11.50% 12.36% 36.46% 28.74% 10.94% % Line Ref: 000's 000's 000's 000's 000's 000's Acute Services 1 Ist Outpatient attendances and procedures ,551 2 Follow-up outpatient attendances ,879 3 Elective admissions 602 1,636 2,045 1, ,078 4 Non-elective admissions 713 2,015 2,631 1, ,467 5 Non contract activity (NCAs) A&E ,148 7 Maternity ,977 8 Urgent Care Centres Market Forces Factor (pro rata to pbr) , , Threshold (41) (107) (147) (90) (25) (411) 11 Readmissions (41) (111) (150) (92) (26) (421) 12 Contract Adjustments (21) (16) 8 (5) 13 Hotline challenges Total PBR 2,401 6,570 8,214 5,372 1,536 24, Non Payment by Results 472 1,179 1,534 1, , CQUIN Ambulance , IVF SLAs Reserves Winter pressures funding Futher savings required/ funding available ,603 Sub-total Acute 3,389 8,972 11,294 7,406 2,084 33,146 Non-acute commissioning 21 MH/LD Contracts and NCAs 800 1,847 2,331 1, , Community Services , Continuing Care , Intermediate Care Reablement (0) (0) (0) (0) (0) (0) 26 Hospices Other Non Acute HCT in contract ,845 Sub-total Non-acute commissioning 1,565 3,612 4,558 2, ,355 Primary Healthcare 29 GP prescribed drugs 1,270 1,919 2,320 1, , Centrally charged drugs Scriptswitch Home oxygen Out of hours services GP IT Enhanced Services - LES Herts Eye Counselling & Physio Stevenage Community Secondary Care in PMS setting Sub-total primary healthcare 1,405 2,189 2,664 1, , Running costs Reserve: Contingency in scope Recharges NHS Property Services Ltd Transformation reserve Planned underspend Total 6,360 14,772 18,516 12,025 3,241 54,914 5

6 1. ACUTE COMMISSIONING This is activity carried out mainly in acute trusts, some non-nhs & Independent Sector providers. This activity is known as secondary care activity and is largely covered by Service Level Agreements (SLA s) with individual local providers. This activity includes contracted activity, non-contracted activity, PBR and non-pbr activity are shown separately. Payment by Results (PBR) is a payment mechanism where the activity is grouped by Healthcare Resource Groups (HRG) and a national tariff is applied. The background to the PBR system can be found at: dplanning/nhsfinancialreforms/index.htm PBR expenditure includes inpatient spells (elective and non-elective), day-cases, outpatient attendances (first and follow ups) and Outpatient procedures. A breakdown of this information is available in the PBR report that CCG Support Managers can access. It is important to note that this file and the figures in the CCG report will not reconcile to MedeAnalytics. This is because the latter is constantly being updated and moves with time, but does not reflect contract adjustments not made in SUS, e.g. the credit for the non elective threshold For lines 1 to 13 below, the sum of all the practices budget figures on each line are set at agreed contract levels with providers (affordable levels) for the year. The affordability limit for each contract has then been allocated to practices on the basis of their usage last year. Payment by Results (PBR): Line 1 1 st Outpatient attendances and procedures The activity recorded on this line include 1 st Outpatient attendances and Outpatient procedures. The activity for 1 st Outpatient attendances will be the first (in a series) or only appointment. The referral source will usually be a GP but the activity does include non GP-referred attendances. The actual monthly data is taken from SUS data that has been adjusted for any obvious errors. Activity for Outpatient procedures is defined by the PBR rules and typically includes minor operations for skin procedures, endoscopies, etc. The actual data is taken from the adjusted SUS data, as above. Line 2 Follow-up outpatient attendances The activity recorded on this line includes any number of follow-up appointments related to a first outpatient appointment for one condition. The actual data is taken from the adjusted SUS data, as above. 6

7 Line 3 Elective admissions Activity included on this line is for planned operations and procedures. The actual data is taken from the adjusted SUS data, as above. Line 4 Non-elective admissions This activity is unplanned/emergency admissions, (activity which is difficult to influence or redirect). The actual data is taken from the adjusted SUS data, as above. Line 5 Non contract activity (NCAs) Activity on this line picks up activity at providers with whom CCG does not have a contract. These were formerly known as out of area treatments e.g. when Hertfordshire residents are on holiday and seek treatment outside the county this may then charged against this line. We are billed on an individual basis through PBR or non PBR tariffs. Therefore costs are assigned on an actual usage basis. Lines 6 A&E The actual spend for this line is based on usage and is directly taken from the SUS activity. Line 7 Maternity The costs shown for maternity are as per the Trust s report and allocated on the budget basis. Line 8 Urgent Care Centres The actual spend for this line is taken from the Trust reports and is attributed on a capitation basis, which matches budget apportionment. Line 9 Market Forces Factor (pro rata to pbr) For the purpose of MFF charges to practices and localities, the market forces factor as applied to individual providers is not used, instead the total MFF is calculated and this is applied to practices and localities directly in proportion to their respective spend on PBR activity. Effectively the MFF rate applied to a practice / locality is the average for the (old) PCT. (This is to avoid price being a factor when GPs are making referrals and patients are exercising their right to choice of provider. Line 10 Threshold The marginal rate rule sets a baseline value ( ) for emergency admissions at a provider based on 2008/9 level. A provider is then paid 30% of the national price for any increases in the value of emergency admissions above this baseline. The threshold credits for providers are taken from their Trust Report and apportioned as per usage of non-elective activity at their Trust. Line 11 Readmissions Readmissions are avoidable unplanned readmissions within 30 days of discharge. The readmissions credits for providers are taken from their Trust Report and apportioned as per usage of non-elective activity at their Trust. Line 12 Contract Adjustments 7

8 All acute providers submit their PBR activity data through SUS (Secondary User Services) Adjustments to SUS are sometimes made by the information team to account for local payment arrangements and known errors e.g. some day case procedures have now been re-classified as outpatient activity, which attracts a lower rate and will be paid accordingly, however this is not reflected in SUS. We also ensure that the actual spend reflects the charges as per the Trust Report which is used to pay trusts for the service agreements. The adjustments allow us to ensure that accrual and timing issues are reflected in this line. Line 13 Hotline challenges This line shows credits received from Trusts relating to challenges made. The credits are specific to practices and their challenges. Line 14 Non Payment by Results (Non-PBR) Non-PBR consists of activity which is not covered by PBR; therefore, no national tariff applies. Prices are negotiated locally by Commissioner and the Trust. As there is no standard price or contract each Trust tends to be different. Data submissions tend to be patchy and vary greatly. This means data collected is difficult to standardise and upload into MedeAnalytics. Non PBR spend is therefore shared across localities as fairly as possible, using historic shares based on a sample in 2011/12. In turn practices share of these costs are done on a capitation basis. There will be ongoing analysis of non PBR and refinements will be made in future months on its apportionment across localities. A review is currently being undertaken to assess what can be done to improve reporting and controllability. Some areas of expenditure may be allocated on a capitation basis if they are high risk and uncontrollable and therefore a risk share arrangement is sensible. However, some areas may be quite easy to standardise and allocate directly to registered GP. Types of services covered under non-pbr are as follows: Inpatients and outpatients not in PBR Ward Attenders Critical Care PBR excluded Drugs & Devices Pathology Radiology (plain film and x-ray only) Other e.g. Rehab (Stroke and Elderly) Other Direct Access Block services (inc Therapies, Comm Midwifery & Comm Paeds) PTS/CQUIN/ Other (i.e. cytology screening) The above is not a comprehensive list but shows the main type of expenditure. There is a need improve the data we get from providers to ensure a standardised format so that reporting for non-pbr can be improved. Providers have been 8

9 requested to provide Non-PBR activity data in a consistent format however response to this varies. Line 15 CQUIN This is taken directly from the Trust report as this doesn t come through SUS. The planned CQUIN is 2.5% of the agreed contract. Payments are made according to the achievement of actual targets. Line 16 Ambulance The actual spend for this line is attributed on a capitation basis. Line 17 IVF SLAs Costs are taken from providers reports and allocated on fair share basis. Line 18 Reserves This line helps to reduce any overspends. This is a share of the total acute reserve (different from the contingency reserve) which was not allocated to individual Trusts at the start of the year when contracts were initially agreed. This will be reviewed on a monthly basis to see whether it would be better to now assign it to individual Trusts and patient type. Line 19 Winter pressures funding This is shown centrally in Unattributable as this will be passed straight to the Trust, E&N Herts Trust. Line 20 Further savings required/ funding available The line Contingency/further Savings Plans required, last year 2012/13 shown towards the end of the report is now included within the Acute section and described as Further savings required/ funding available. This line is the difference between the total sum allocated to each practice and the sum of individual budgets calculated on historic spend. If the amount is negative ( ) this means further savings have to be made, beyond the budgets set, in order to achieve financial balance; if the sum is positive, this means that there is funding available over and above the budgets shown. The movement of the line to the Acute section is based on the assumption that any further savings required will most likely be made within secondary care and likewise, any funding available will be used to offset any overspend in secondary care. 2. NON-ACUTE COMMISSIONING Line 21 MH/LD Contracts and NCAs The largest expenditure within Non-acute commissioning is the provision of care delivered through the Joint Commissioning Partnership Executive (JCPE) for mental health services and learning disabilities, which are in the scope of CCG as per the Department of Health guidance. Costs and budgets are currently split by locality capitation. 9

10 Line 22 Community Services Commissioned Community Services budgets are derived from existing contracts and reflect as far as possible the shares by main provider to the locality. However where it has not been established that a distinction based on activity would give a fair reflection of costs, both the budgets and expenditure are split by capitation. Line 23 Continuing Care Continuing Health services include Continuing Care and Funded Nursing Care services. Costs and budgets are currently attributed to localities on a capitation basis. Lines 24 to 26 Both the budgets and expenditure are attributed on a capitation basis. Line 27 Other Non Acute This line includes the following services: Patient Transport, Carers and Partnership funding/voluntary sector. Budgets and costs are attributed on a capitation basis. Line 28 HCT in contract This line relates to the community services provided by Hertfordshire Community Trust. The budget for HCT is as per the agreed Service level agreement for 2013/14. The agreement is currently a block contract, apart from the minor injury unit which is cost per case basis. It is charged to localities on a historic basis. 3. PRIMARY HEALTHCARE This section relates to all the CCG expenditure which occurs in Primary Care. Line 29 GP prescribed drugs This line relates to all drugs prescribed in general practice. The information is from the Business Services Authority (BS) monthly reports and reflects the actual spend by practice within the locality. Prescribing budgets are generally set by applying an uplift to the locality s previous year s outturn and then set for each practice according to the methodology agreed within each locality. Line 30 Centrally charged drugs Costs are attributed based on prescribed drugs split. Line 31 Scriptswitch Information provided by Pharmacy & Medicines Optimisation Team. Costs are attributed based on budget split. Line 32 Home oxygen Budgets are set based on the previous year s outturn and actual monthly costs are allocated to practices and localities based on monthly Oxygen Financial Monitor. 10

11 Line 33 Out of hours services Budgets and costs are attributed on a capitation basis. Line 34 GP IT The budget and costs are held centrally. Line 35 Enhanced Services - LES Expenditure for these services is taken directly from the General Ledger (consists of actual and accrued expenditure) and allocated directly to practices and localities on an actual basis as far as possible. It is imperative that CCG leads and the CCG Support Managers ensure that invoices are passed through on a timely basis and that the necessary accruals are made to ensure a correct and up to date position. Local Enhanced Services include: Nursing Homes Phlebotomy Treatment Room Vasectomy Homeless Minor Injury Anti-Coagulation Near Patient Testing Line 36 Herts Eye Budgets are set based on the previous year s outturn 2012/13 and monthly expenditure is taken directly from the General Ledger (consists of actual and accrued expenditure) and allocated directly to practices and localities based on budget split. Line 37 Counselling & Physio Budgets are set based on the previous year s outturn 2012/13 and monthly expenditure is taken directly from the General Ledger (consists of actual and accrued expenditure) and allocated directly to practices and localities based on budget split. Line 38 Stevenage Community Expenditure for these services is taken directly from the General Ledger (consists of actual and accrued expenditure) and allocated directly to practices on a capitation basis. Line 39 Secondary Care in PMS setting Expenditure for these services is taken directly from the General Ledger (consists of actual and accrued expenditure) and allocated directly to practices on an actual basis. 11

12 4. OTHER Line 40 Running costs Running costs are costs relating to corporate costs, pay and non-pay. These costs are held centrally at CCG level and not apportioned to individual localities. Line 41 Reserve: Contingency in scope This represents the ENCCG s contingency reserve. Line 42 Recharges NHS Property Services Ltd These are charges relating to Charter House and other CCG sites. These costs are held centrally at CCG level and not apportioned to individual localities. Line 43 Transformation reserve A reserve has been allocated to fund specific programmes and projects, ie. Acute in Hours and the Falls project. These are held centrally at CCG level and not apportioned to individual localities. Future changes to CCG locality and practice budgets CCG budgets change from month to month as allocations change and virements are agreed. It is likely that CCG allocations will change and budgets will change to match. In most cases this will be cost-neutral. 12

13 5. Locality Management Support In the first instance all queries should be addressed to your Locality Support Manager. Please see contact details below: Locality Contact details Welhat Lower Lea Valley Locality Manager Helen O Keefe Helen.O'Keefe@enhertsccg.nhs.uk Assistant Director Nicky Poulain Nicky.Poulain@enhertsccg.nhs.uk Stevenage North Herts Locality Manager Amila Wickramage Amila.Wickramage@enhertsccg.nhs.uk Assistant Director Jacqui Bunce Jacqui.Bunce@enhertsccg.nhs.uk Stort Valley & Villages Upper Lea Valley Locality Manager Tracey Waterfall Tracey.Waterfall@enhertsccg.nhs.uk Assistant Director Dee Boardman Denise.Boardman@enhertsccg.nhs.uk

14 6. Further Suggested Reading (i) Payment by Results (ii) Payment by Results (PbR) tariff for payment of healthcare providers over 2013 to (iii) Payment by Results in the NHS: additional guidance for 2013 to

15 Appendix 1 Report line Apportionment method Line Ref: Acute Services 1 Ist Outpatient attendances and procedures SUS 2 Follow-up outpatient attendances SUS 3 Elective admissions SUS 4 Non-elective admissions SUS 5 Non contract activity (NCAs) SUS 6 A&E SUS 7 Maternity Trust report and SUS 8 Urgent Care Centres Trust report and FS 9 Market Forces Factor (pro rata to pbr) SUS 10 Threshold SUS Non Electives 11 Readmissions SUS Non Electives 12 Contract Adjustments SUS by Trust by total usage 13 Hotline challenges specific challenges by practice 14 Non Payment by Results Trust by budget apportionment 15 CQUIN split by budget apportionment, PBR allocated on SUS activity and Non-PBR by Trust budget 16 Ambulance Trust by FS 17 IVF SLAs FS 18 Reserves FS 19 Winter pressures funding held centrally 20 Futher savings required/ funding available budget setting line Non-acute commissioning 21 MH/LD Contracts and NCAs FS 22 Community Services FS 23 Continuing Care FS 24 Intermediate Care FS 25 Reablement FS 26 Hospices FS 27 Other Non Acute FS 28 HCT in contract budget split Primary Healthcare 29 GP prescribed drugs actual usage from PPA 30 Centrally charged drugs based on above line 31 Scriptswitch budget split 32 Home oxygen actual usage from Financial Oxygen Monitor 33 Out of hours services budget split 34 GP IT held centrally 35 Enhanced Services - LES ISFE locality totals apportioned to practices on FS basis 36 Herts Eye budget split 37 Counselling & Physio budget split 38 Stevenage Community FS 39 Secondary Care in PMS setting budget split 40 Running costs held centrally 41 Reserve: Contingency in scope FS 42 Recharges NHS Property Services Ltd held centrally 43 Transformation reserve held centrally 44 Planned underspend held centrally *FS (Fair share ) 15

Governing Body Meeting in Public

Agenda Item No: Item 7 of Meeting: Thursday 30 th March 2017 Governing Body Meeting in Public Paper Title: Finance Report Month 10 2016/17 Decision Discussion Information Follow up from last meeting Report