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Consultation for the proposed 2025/26 NHS Payment Scheme is open in England
On January 30, 2025, NHS England published its proposed NHS Payment Scheme (NHSPS) for the 2025/26 financial year and launched a consultation, with a deadline for comments on February 28, 2025.
The proposed NHSPS will cover one financial year, starting on April 1, 2025, compared to the previous two-year scheme. One of its key objectives is to encourage shifting healthcare services to less intensive settings (day case/outpatient).
Payment Mechanisms
No major changes have been made to the overall payment structure. The four existing payment mechanisms will remain in place:
- Aligned Payment and Incentives (API): This remains the primary approach, consisting of fixed (global budget) and variable (activity/quality-based) components. Elective care will continue to be reimbursed via the variable component using HRG (DRG) tariffs;
- Low Volume Activity (LVA) Block Payments: Nationally set values will apply, covering almost all NHS provider-commissioner relationships with an annual value under £1.5m;
- Activity-Based Payments: Services delivered by non-NHS providers will be reimbursed using HRG tariffs;
- Local Payment Arrangements: Locally determined payment methods for services not covered by the other mechanisms.
While the overall structure remains, the changes are proposed in the following areas.
Elective and activity-based payments
- It is proposed that commissioners will be required to set a payment limit for elective services and all services paid for on an activity basis, where the planned value of an activity is above £0.1m. The payment limit would be the value of activity above which the commissioner is not required to make further payments;
- This will apply to both NHS and independent sector providers, including Community Diagnostic Centres.
Specialised services
Specialist top-ups will be incorporated into the API’s fixed payment from NHS England to specialised care providers, eliminating variable top-up payments.
Community Diagnostic Centres (CDCs)
Tariffs will be established for activities performed at CDCs, covering services such as endoscopy, diagnostic imaging, physiology examinations, and pathology (e.g., point-of-care tests).
Most CDC activities will be mapped to existing HRGs, though some (e.g., point-of-care tests) do not have corresponding HRGs. The national CDC programme, now in its third year, has approved 170 sites across England. CDCs are critical to expanding access to diagnostic services, offering patients greater flexibility in test location and timing, as outlined in the Elective Care Reform Plan.
High Cost Device List
The current payment mechanism will remain unchanged, and no new devices will be added to the list.
MedTech Funding Mandate products
The payment mechanism remains unchanged, with no new products proposed for inclusion. Spectra Optia is proposed for removal, with a price increase for Automated Red Cell Exchange (HRG SA41Z) to reflect delivery costs.
Best Practice Tariffs (BPT)
A new BPT, Right Procedure Right Place (RPRP), will be introduced to incentivize shifting suitable procedures from day case or elective settings to outpatient settings. This change aims to enhance efficiency, productivity, and cost reduction.
- Applicable procedures will be in dermatology, ophthalmology, orthopedics, men’s health, and gynecology areas.
HRG tariffs
HRG tariffs will be updated to reflect a 4.15% cost uplift and a 2.0% efficiency factor. Manual price adjustments are proposed in the following areas: A&E (18%), maternity (11%), non-elective services (12%), selected gynecology and ENT services (15%), selected upper gastrointestinal tract and specialised services.
See the full details here.
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