Community pharmacy funding webinar Mike Dent Director of Pharmacy Funding Harpreet Chana Head of Funding Strategy psnc.org.uk/fundingchanges #pharmacychanges @PSNCNews
Introduction • Details of the funding settlement imposition: – Quantum – Distribution – Establishment Payment – Quality Payment – Pharmacy Access Scheme • Outstanding questions • Planning for the future • Useful resources • Further reimbursement changes
Quantum of funding imposition • Total funding: 2016/17 £2.687 billion 2017/18 £2.592 billion • Smaller funding reduction for 2016/17 Was £28m * 6 (Oct – Mar) = £170m Now £28m * 4 (Dec – Mar) = £113m • No change to proposal for 2017/18 Cut of £170m plus £38m = £208m • No indication of funding settlements beyond 2017/18
Distribution • Single Activity Fee (SAF) ITEM FEE – 90p/item PRACTICE PAYMENT – max 52.2p/item REPEAT DISPENSING FEE- £1500/year EPS PAYMENT - £200/month • Balancing figure to distribute funding • EPS release 2 set up fee to cease from end March 2017 • 90 pharmacies haven’t claimed set up fee yet!
How was the SAF derived? Funding breakdown Years 1 and 2 Period Element (millions) Dec-Mar 16/17 2017/18 Underlying funding £885 £2,800 Proposed cuts £113 £208 Total Funding £772 £2,592 Notional margin £219 £800 Establishment payment £74 £167 Pharmacy access scheme £15 £25 Quality payment £0 £75 Additional fees (2A-F) £34 £103 Advanced services £39 £117 Amount remaining £391 £1,305 Forecast item volume £345 1,055 SAF (£ per item) £1.13 £1.24
Establishment Payment (EP) • Establishment Payment removal: changed phasing – 20% reduction from December 2016 – 40% reduction from April 2017 – Payments to cease by end 2019/20 • Revised figures are as follows: Month on Month Impact Yearly Impact 2016/17 Item Apr 16 - Dec 16 - % 2016/17 2016/17 % thresholds Nov 16 Mar 17 reduction underlying IMPOSED reduction 2500-2829 £1,940 £1,552 -20% £23,278 £21,726 -7% 2830-3149 £2,016 £1,613 -20% £24,190 £22,577 -7% 3150+ £2,092 £1,673 -20% £25,100 £23,427 -7% Month on Month Impact Yearly Impact 2017/18 Item Apr 17 - Apr 17 - % 2017/18 2017/18 % thresholds Mar 18 Mar 18 reduction underlying IMPOSED reduction 2500-2829 £1,940 £1,164 -40% £23,278 £13,967 -40% 2830-3149 £2,016 £1,210 -40% £24,190 £14,514 -40% 3150+ £2,092 £1,255 -40% £25,100 £15,060 -40%
Quality Payment (QP) • Revised budget of £75m (maximum £6,400/year ) • Implementation from December 2016 • Two review points: 1. April 2017 - £25 million available 2. November 2017 - £50 million available (More contractors likely to meet criteria by the second review point) • Payment comes out of the funding settlement for 2017/18 • Reconciliation payment late in 2017/18 to take account of any underspend
Pharmacy Access Scheme (PhAS) • Designed to protect patient access • DH model changed over time • Last minute amendment for ‘deprived areas’ 1,356 pharmacies 1%/3% efficiencies Quality payment taken into consideration • Payments are contractor specific and are calculated as follows: 2016/17 top up = (2015/16 remuneration * 0.99) - 2016/17 estimated remuneration 2017/18 top up = (2015/16 remuneration * 0.97) - 2017/18 estimated remuneration
PhAS – What does it mean for me? • Estimated remuneration assumes constant items and 100% quality payment • Payments are fixed for each period • Comes out of total funding settlement 2016/17 - c£15m (average c£2,900 per month) 2017/18 - c£25m (average c£1,500 per month) • Join Gordon Hockey - Director of Regulation and Support next Wed (16 th Nov) for more information
Outstanding questions There are a number of detailed points that will need to be clarified with the Department of Health: • VAT • Top up payments • Items that attract more than one fee • Threshold levels
Planning for the future
Indicative income: Essential Services April 2017 November 2016 December 2016 Indicative monthly income for national contract Essential Services Indicative monthly income for national contract Essential Services by by item band as at December 2016 (may decrease if a further Indicative monthly income for national contract Essential item band as at November 2016 reduction is made to Cat M) Services by item band as at April 2017 Total Total Total Indicative income Estimated Indicative income Estimated Indicative income from Estimated Items per total Items per from fees average total Items per from fees average total fees and average £ per item £ per item £ per item month income month and buying income month and buying income allowances buying profit pcm allowances profit pcm allowance profit pcm pcm pcm s pcm 1,000 £1,338 £759 £2,096 £2.10 1,000 £1,375 £635 £2,010 £2.01 1,000 £1,230 £635 £1,865 £1.87 2,000 £2,675 £1,517 £4,193 £2.10 2,000 £2,948 £1,270 £4,219 £2.11 2,000 £2,460 £1,270 £3,730 £1.87 2,500 £6,069 £1,588 £7,657 £3.06 2,500 £4,626 £1,588 £6,215 £2.49 2,500 £4,508 £1,896 £6,405 £2.56 2,830 £6,648 £1,798 £8,445 £2.98 2,830 £5,093 £1,798 £6,891 £2.43 2,830 £4,995 £2,147 £7,142 £2.52 3,150 £5,469 £2,389 £7,858 £2.49 3,150 £7,210 £2,001 £9,211 £2.92 3,150 £5,547 £2,001 £7,548 £2.40 4,000 £6,606 £3,034 £9,640 £2.41 4,000 £8,504 £2,541 £11,045 £2.76 4,000 £6,593 £2,541 £9,134 £2.28 5,000 £10,026 £3,176 £13,202 £2.64 5,000 £7,822 £3,176 £10,999 £2.20 5,000 £7,944 £3,793 £11,736 £2.35 6,000 £11,548 £3,811 £15,359 £2.56 6,000 £9,052 £3,811 £12,864 £2.14 6,000 £9,281 £4,551 £13,833 £2.31 7,000 £10,619 £5,310 £15,929 £2.28 7,000 £13,069 £4,447 £17,516 £2.50 7,000 £10,282 £4,447 £14,729 £2.10 8,000 £11,957 £6,068 £18,025 £2.25 8,000 £14,591 £5,082 £19,673 £2.46 8,000 £11,512 £5,082 £16,594 £2.07 9,000 £13,295 £6,827 £20,122 £2.24 9,000 £16,113 £5,717 £21,830 £2.43 9,000 £12,742 £5,717 £18,459 £2.05 10,000 £17,635 £6,352 £23,987 £2.40 10,000 £13,972 £6,352 £20,324 £2.03 10,000 £14,632 £7,586 £22,218 £2.22 11,000 £19,157 £6,988 £26,144 £2.38 11,000 £15,201 £6,988 £22,189 £2.02 11,000 £15,970 £8,344 £24,314 £2.21 13,000 £18,646 £9,861 £28,507 £2.19 13,000 £22,200 £8,258 £30,459 £2.34 13,000 £17,661 £8,258 £25,919 £1.99 15,000 £25,244 £9,529 £34,773 £2.32 15,000 £20,121 £9,529 £29,649 £1.98 15,000 £21,321 £11,378 £32,699 £2.18
Indicative income: fees/allowances November 2016 December 2016 Indicative monthly income from fees and allowances for Essential Services by item band as at November 2016 Indicative monthly income from fees and allowances for Essential Services by item band as at December 2016 Total Total income income Special fees Repeat Establish Special fees Items per Establishme Practice from fees Items per from fees Item fee and dispensing EPS £ per item SAF ment and £ per item month nt Payment Payment and month and allowances set up fee Payment allowances allowances allowances pcm pcm 1,000 £900 £0 £50 £100 £125 £200 £1,375 £1.37 1,000 £1,130 £0 £100 £1,230 £1.23 2,000 £1,800 £0 £624 £200 £125 £200 £2,948 £1.47 2,000 £2,260 £0 £200 £2,460 £1.23 2,500 £2,250 £1,940 £1,305 £250 £125 £200 £6,069 £2.43 2,500 £2,825 £1,552 £250 £4,626 £1.85 2,830 £2,547 £2,016 £1,477 £282 £125 £200 £6,648 £2.35 2,830 £3,198 £1,613 £282 £5,093 £1.80 3,150 £2,835 £2,092 £1,644 £314 £125 £200 £7,210 £2.29 3,150 £3,560 £1,673 £314 £5,547 £1.76 4,000 £3,600 £2,092 £2,088 £399 £125 £200 £8,504 £2.13 4,000 £4,520 £1,673 £399 £6,593 £1.65 5,000 £4,500 £2,092 £2,610 £499 £125 £200 £10,026 £2.01 5,000 £5,650 £1,673 £499 £7,822 £1.56 6,000 £5,400 £2,092 £3,132 £599 £125 £200 £11,548 £1.92 6,000 £6,780 £1,673 £599 £9,052 £1.51 7,000 £6,300 £2,092 £3,654 £699 £125 £200 £13,069 £1.87 7,000 £7,910 £1,673 £699 £10,282 £1.47 8,000 £7,200 £2,092 £4,176 £799 £125 £200 £14,591 £1.82 8,000 £9,040 £1,673 £799 £11,512 £1.44 9,000 £8,100 £2,092 £4,698 £898 £125 £200 £16,113 £1.79 9,000 £10,170 £1,673 £898 £12,742 £1.42 10,000 £9,000 £2,092 £5,220 £998 £125 £200 £17,635 £1.76 10,000 £11,300 £1,673 £998 £13,972 £1.40 11,000 £9,900 £2,092 £5,742 £1,098 £125 £200 £19,157 £1.74 11,000 £12,430 £1,673 £1,098 £15,201 £1.38 13,000 £11,700 £2,092 £6,786 £1,298 £125 £200 £22,200 £1.71 13,000 £14,690 £1,673 £1,298 £17,661 £1.36 15,000 £13,500 £2,092 £7,830 £1,497 £125 £200 £25,244 £1.68 15,000 £16,950 £1,673 £1,497 £20,121 £1.34
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