Payment by results suspended

The announcement, made in an urgent system letter from Sir Simon Stevens and Amanda Pritchard, confirms the operational planning process for 2020-21 has been cancelled due to the coronavirus outbreak. It adds that all trusts will move to a system of block contracts next month, with mechanisms for reimbursement if costs exceed the agreed amount.

The letter also states there will be unfettered financial support for all costs associated with coronavirus, as was suggested by the chancellor Rishi Sunak last week.

All trusts will move to block contract payments “on account” for an initial period from April to the end of July 2020.

The letter says: “The value of this payment will be calculated nationally for each CCG/provider relationship. This figure will be based on the average monthly expenditure implied by the provider figures in the M9 agreement of balances return plus an uplift that allows for the impact of inflation (including pay uplifts and CNST) but excluding the tariff efficiency factor. It will not include activity growth.”

Trusts could also get top-up payments where their monthly costs over the three months to January 2020 were higher than the nine-month average.

Providers will also be able to claim for additional costs where the block payments do not equal actual costs to reflect “genuine and reasonable additional marginal costs due to COVID-19”.

The financial recovery fund has also been shelved.

Last week senior healthcare leaders called on ministers to scrap their financial and efficiency targets.

Meanwhile, the letter says the NHS is “deferring publication of the NHS People Plan [previously due in March after multiple delays] and the clinical review of standards recommendations to later this year”. Publication of the NHS long-term plan implementation framework is delayed to “autumn” and it is recommended systems “do the same for your local plans”.