Our strategic approach to fees for 2013 to 2016

Transcription

1 Our strategic approach to fees for 2013 to 2016 April 2013

2 1. Introduction The Care Quality Commission (CQC) is the independent regulator for health and adult social care in England. The Health and Social Care Act 2008 gives us powers to charge fees for regulatory activities in relation to: Applications to register. Grant or subsistence of registration. Applications to vary an existing registration. The government s policy is that all regulators should set fees to cover their costs. We started operating our system of regulation in Since then, new sectors have entered regulation. When the regulatory system is new, or a sector is new to regulation, initially we can only estimate costs. Our prudent approach is to start fees at 50% of estimated costs and move towards full costs year by year, as we develop reliable cost data. We are doing that quickly. In 2012/13 the cost of regulatory activities was 123 million, of which 93 million (76%) came from fees. We intend to reach full cost recovery by Cost recovery in 2012/13 NHS Adult social care Independent health Dentistry 88% 93% 75% 67% Since 1 April 2013, registration of NHS primary care means that all the main health and social care sectors have now entered regulation. When we reached this milestone, we published our overall strategic approach to the next phase of CQC s development. This document, in turn, sets out our strategic approach to how we will calculate fees to finance the next phase of regulation. Our strategic approach to fees for 2013 to

3 2. CQC s strategic approach to fees Our aim is to: Meet our requirements for generating income, fairly and appropriately; this includes cost recovery by Expose our costs to scrutiny, and therefore drive efficiency. Be innovative so that fees actively contribute to CQC s overall not just financial objectives. We have six guiding principles. Fees will: 1. Be fair based on appropriate proxies of cost and CQC s obligations for cost recovery. 2. Reflect costs based on evidence of CQC s costs, not providers ability to pay. 3. Contribute to our regulatory model designed to promote quality improvement, not only cost recovery. 4. Be simple using intuitive categories, clearly related to costs and efficiency. 5. Be transparent based on open information about costs, driven by stakeholder advice. 6. Be visionary, in evolutionary steps with high ambitions, such as creating fee incentives, broken down into manageable steps towards them each year. Section 4 of this document sets out how these are translated into priorities for 2013 to We have a Fees Advisory Panel to open up our costs and charges to scrutiny. The Panel will evolve, and continue to be essential to our strategic approach. Fees Advisory Panel A formal advisory group to ensure providers views are influential in CQC s fees policy. Contains membership organisations from all regulated sectors, committed to working constructively with CQC on fees for their members. 1 Promotes increasingly open information from CQC about costs, charges and efficiency. CQC is responsible for proposing fees, but will have regard to the Panel s advice. 1 Panel members come from Independent Healthcare Advisory Services, NHS Confederation, Foundation Trust Network, English Community Care Association, Registered Nursing Home Association, United Kingdom Home Care Association, National Council for Palliative Care, British Medical Association, British Dental Association. Our strategic approach to fees for 2013 to

4 3. How we developed our strategic approach to fees We compared our approach to fees with 15 other regulators in the UK and Ireland. We found that the approaches varied widely, so we focused on defining our fundamental principles and objectives and set up the Fees Advisory Panel to help guide us. We consulted on our approach and received 372 comments. The feedback was not straightforward: while the strategic direction was generally welcomed, the strongest message was that overall providers do not understand how and why we set fees and so do not accept their justification. In addition, some providers consider that CQC duplicates other assurance systems (so they essentially pay twice for the same thing); some providers think CQC s regulatory costs are not sensitive enough to their circumstances (in particular, during economic recession); and others think there are risks in our proposed approach (for example, potential administrative costs). However, involving representative organisations is seen as a key way to address these concerns. Our strategic approach to fees for 2013 to

5 4. Our priorities for fees for 2013 to 2016 Priority 1: Providers should understand how fees are calculated and what they get for them Greater involvement of providers We will have regard to the Fees Advisory Panel, to help guide our approach. Engagement will become ongoing instead of one-off formal consultations each year. Better information about costs and fees We will publish more information openly. By April 2016, we will have both transparent information about our costs, and a system of fees that fully recovers those costs, as far as possible and appropriate. Priority 2: Fees should be integral to CQC s regulatory model Fees designed to achieve regulatory as well as financial objectives The development of our regulatory methods will have explicit regard to costs; those who develop the methods will also develop the fee proposals to fund them. A variable element could be introduced within fees to create a closer connection between charges and regulatory activity. Making fees part of CQC s overall relationship with the sector We will develop our fee categories into a single set of groupings for mapping providers to our definitions of fees, registration categories, service types and locations. This could drive all our systems such as fees, standards, methods, inspection scheduling, information structures and publications. We will use the intelligence that we build up about the care market to review the design of fees with providers. This will focus on proxy indicators of cost (such as number of beds) and fee bands, to ensure that they are appropriate and achieve their aims. Priority 3: Fee-based incentives should help promote improvements in compliance Consideration of three types of incentive We could introduce discounts where less inspection cost is incurred (for example, by demonstrating compliance through accreditation, reducing the need for inspection by CQC). We could introduce discounts where less administrative cost is incurred (for example, by paying by direct debit). We could introduce discounts where providers help us improve efficiency and effectiveness (for example, by participating in pilots, providing specialist knowledge or data). Our strategic approach to fees for 2013 to

6 A cautious approach Any incentives will be introduced slowly and on a small scale. Any incentives will have thorough testing and development, by involving providers and using behavioural economics expertise. They will need to be evaluated. Any discounts are likely to be symbolic amounts, with the key value being from the public recognition that they demonstrate, rather than financial savings. Priority 4: CQC should be able to demonstrate efficiency in its costs When reviewing levels of charges CQC will also review costs Our evaluation programme will include costs and value for money. We will make information on costs and charges available to the Fees Advisory Panel and consider their feedback. We will work to a general principle of seeking to contain, and where appropriate minimise, direct and indirect costs to providers. Priority 5: CQC should achieve new standards of customer service for fee transactions Modern, user-friendly systems for transactions We will introduce modern payment options, such as online systems, direct debit and instalments. We will include fees within a move towards online accounts for registered providers, through which they can more easily manage their administrative relationship with CQC. Our strategic approach to fees for 2013 to

7 5. Implementing our strategic approach to fees This document describes our direction for fees over the next three years. Each year, we will set out plans to turn that direction into specific actions. We will do this through the consultations that are required for any changes to fees. From 2013 onwards, we will publish those consultations earlier in the year than we have in the past. This means that final decisions on any changes in fees should be published within, rather than after, the public sector business planning cycle. How to contact us Call us on: us at: Look at our website: Write to us at: Care Quality Commission Citygate Gallowgate Newcastle upon Tyne NE1 4PA Follow us on Please contact us if you would like a summary of this report in another language or format.