1. nGMS and PMS EVENTS FINANCE Michael Munt

2. nGMS and PMS IMPLEMENTATION FINANCE Overview Financial Arrangements Contractors - Statement of Financial Entitlements Allocations to PCTs Contractor Budgets Financial Management and Monitoring Key Milestones

3. nGMS and PMS IMPLEMENTATION FINANCE Financial Arrangements - Headlines Spending on Primary Medical Services in the UK to increase from £6.1bn in 2002/03 to £8bn in 2005/06 Arrangements underpinned by Gross Investment Guarantee for the years 2003/04 to 2005/06 All allocations are now cash limited with some minor elements of dispensing remaining as non cash limited Link to Local Development Plan

4. nGMS and PMS IMPLEMENTATION FINANCE Gross Investment Guarantee (GIG) Mechanism to monitor overall spend on Primary Medical Services. Technical Sub Committee established comprising representatives of DH/NHSC/BMA to monitor arrangements. Component Parts GMS Non Cash Limited PCT Unified Allocation, GMS Cash Limited, Dispensing Drug costs Centrally Funded Initiatives New Monies Primarily For Quality

5. nGMS and PMS IMPLEMENTATION FINANCE EXPENDITURE TYPEEngland 2002/03 2003/04 2004/05 2005/06 GMS fees and allowances2,9903,100 - - GMS cash-limited payments 9881,086 - - Global sum payments 0 2,651 2,690 Quality payments 0 80 682 1,102 Enhanced primary care services 254 315 518 586 Premises 0 60 600 756 IT 0 60 108 108 Other PCT administered funds 0 332 354 Transitional protection 0 297 197 Other (R&R & OOH DF) 74 74 90 90 Demand Management 5 5 Dispensing 726 784 847 917 TOTAL SPEND5,0325,559 6,131 6,806

6. nGMS and PMS IMPLEMENTATION FINANCE Gross Investment Guarantee GIG is currently being revised to take account of : Outturn on 2002/03 fees and allowances Growth assumptions in GMS Cash Limited monies Increases in dispensing and drugs costs Changes in superannuation employers costs Projected over/underspend in 2003/04

7. nGMS and PMS IMPLEMENTATION FINANCE Contractor Entitlements SFE

8. nGMS and PMS IMPLEMENTATION FINANCE Contractor Entitlements Red Book replaced by the Statement of Financial Entitlement (SFE) Concept of Entitlement continues but not on the basis of individual Practitioner but on the basis of a Contractor Practice All payments under the old arrangements cease 31 March 2004 PCTs must make adequate provision for the accrual of outstanding amounts in their 2003/04 accounts

9. nGMS and PMS IMPLEMENTATION FINANCE Additional cash financing requirement will, if necessary be made available Any additional costs to be met by PCT The SFE gives Contractors certainty over the minimum level of entitlement Discretionary funds will be available to Contractors The SFE sets out 17 different types of entitlement

10. nGMS and PMS IMPLEMENTATION FINANCE Key Entitlements Global Sum Based on Formula - Carr Hill to establish allocation fair shares Formula is weighted at Contractor level to be updated every quarter for changes in Contractor characteristics and weighted population Indicative price is currently £50 per weighted patient

11. nGMS and PMS IMPLEMENTATION FINANCE Off formula adjustments for : A London weighting of £2.18 per registered patient not weighted Temporary patients adjustment to be calculated as part of a five year rolling average Additional Service and Out of Hour Opt outs

12. nGMS and PMS IMPLEMENTATION FINANCE Minimum Practice Income Guarantee To provided support to global Sum formula losers Income levels protected based on comparison of the Global Sum and Global Sum Equivalent Global sum Equivalent based on reference period July 2002 to June 2003 GSE to be adjusted to take account of changes in list size between reference period and 1st April 2004

13. nGMS and PMS IMPLEMENTATION FINANCE The initial MPIG is then amended to take account of the adjusted GSE MPIG is a one off calculation Uplifted only in line with Global sum No Global Sum uplift in 2005/06

14. nGMS and PMS IMPLEMENTATION FINANCE Quality payments Three payments under the quality heading: Quality Preparation Payments -2004/05 is the second and final year Quality Aspiration based on one third of the anticipated level of achievement at average £75 per point For 2005/06 For 2005/06 aspiration payments will be set at 60%

15. nGMS and PMS IMPLEMENTATION FINANCE Quality Achievement Achievement Payments will be based on achievement points multiplied by £75 for a Contractor with average list size Payable by end of April 2005 PCTs will need to provided for these amounts in their 2004/05 annual accounts

16. nGMS and PMS IMPLEMENTATION FINANCE Other entitlements will cover: Directed Enhanced Services Locum Payments Seniority payments Recruitment and Retention Initiatives Dispensing to be rolled forward but fee rates have been uprated Premises - Existing commitments brought forward Information Technology - Changes reflect new reimbursement arrangements

17. nGMS and PMS IMPLEMENTATION FINANCE Implications for Personal Medical Services Establish baseline 2003/04 allocation up to wave 5b Excludes Quality preparation and flu allocations Access to new funding streams Improved seniority pay and pensions Ability to opt out of OOH responsibility PMS to GMS movement potential MPIG equivalent based on local data or benchmark based GMS Global Sum Equivalent based on banded list size

18. nGMS and PMS IMPLEMENTATION FINANCE Conditions attaching to SFE payments: Provision of all necessary information not available to the PCT Must be Accurate to the best of the Contractors knowledge Provide up to date and accurate information for registration system purposes Breach will be subject to disputes resolution process Obligation to co-operate with investigation undertaken by auditors and counter fraud services

19. nGMS and PMS IMPLEMENTATION FINANCE Allocations

20. nGMS and PMS IMPLEMENTATION FINANCE Allocations to PCTs 2004/05 Cash Limited Primary Medical Services Ten separate funding streams but only one pot No separate target for primary care funding will be part of the overall Unified Budget determination Will need to be managed as part of the overall UB Will become incorporated into three year allocation process

21. nGMS and PMS IMPLEMENTATION FINANCE Not ring fenced except for Enhanced Services/OOH Local floor level to be set for Enhanced services Majority of funding to be allocated to PCTs Only minimal central budgets

22. nGMS and PMS IMPLEMENTATION FINANCE ALLOCATION ARRANGEMENTS Global sum MPIG Correction factor Enhanced services QOF PCO Administered Out of HoursPremises Dispensing & PA PMS allocation IT

23. nGMS and PMS IMPLEMENTATION FINANCE Allocation Arrangements Global Sum and MPIG Data to inform the calculations via a number of Allocation Working papers Practice populations from the Exeter system during April 2003 PCTs were asked to confirm the attribution of GPs to practices and practices to PCTs Adjusted for PMS practices in waves 5a and 5b Expenditure mapped on a cash payments basis from the reference period July 2002 to June 2003 to establish GSE

24. nGMS and PMS IMPLEMENTATION FINANCE Global sum covers 27 categories for expenditure previously paid via the NCL route Changes in configuration of practices Included were the implication of GP vacancies but NOT practice staffing Additions will be made to the £ per weighted registered list size for the increase in employers superannuation cost

25. nGMS and PMS IMPLEMENTATION FINANCE Agreed that the historical cost will be on formula. Superannuation adjustment will effect both GMS and PMS Further information will be provided once agreed

26. nGMS and PMS IMPLEMENTATION FINANCE Out Of Hours Funding There are four specific sources of funding to resource out of hours services: Existing Unified Budget for Out of Hours Development Additional recurring allocation of circa £46m A non recurrent sum of £28m over two years A transfer of 6% of a contractors Global sum excluding MPIG. The allocation methodology for the OODF will change to a capitation basis form 2005/06.

27. nGMS and PMS IMPLEMENTATION FINANCE Enhanced Services Most of the enhanced services has already been allocated to PCTs in their three year allocations HSC 2002/12 identified sums of £315m/394m/460mand a national floor 2004/05 additional funding will result from the transfer in of existing non cash limited payments. The national floor is to be replaced by a local PCT floor in 2004/05. Still to be agreed Planned spending needs to be signed off by the PEC in consultation with the local LMC

28. nGMS and PMS IMPLEMENTATION FINANCE Quality and Outcomes Framework Three funding elements for the QOF Quality Preparation - to be allocated in January 2004 Aspiration - allocation to be made to PCT in April 2004 Achievement - resource only to be allocated in year Financial provision to cover QOF indicatively sufficient to support 74% and 85% achievement in 2004/05 and 2005/06 NHS to manage the risk through the NHS Bank - policy still to be determined

29. nGMS and PMS IMPLEMENTATION FINANCE PCT Administered funds This will cover: Seniority Locum Payments Recruitment and Retention arrangements To be allocated mainly on an historical basis except recruitment and retention which will be held central to target Precise detail will be included in the Allocation statement

30. nGMS and PMS IMPLEMENTATION FINANCE Premises Funding Allocations will be based on Existing spend Agreed new premises developments contractually agreed by 30 September 2003 New premises developments including LiFT based on a weighted capitation approach The first two elements will be allocated to PCTs in main allocation followed by the third element going to the nominated lead PCT within the SHA area

31. nGMS and PMS IMPLEMENTATION FINANCE Information and Technology Historically funding for IMT part of the Cash limited GMS allocation Topped up by at least £20m to meet 100% costs of minor upgrades and maintenance. This will be made recurrent. Allocations to be mapped on the basis of historical spend Balance of funding will be held centrally within National Programme for IT PCTs will need to establish asset registers

32. nGMS and PMS IMPLEMENTATION FINANCE Contractor Budgets

33. nGMS and PMS IMPLEMENTATION FINANCE Establishing Contractor Budgets PCTs will receive ACTUAL Allocations which will include indicative budgets for contractors ACTION REQUIRED To establish indicative budgets one week after receipt of allocation To negotiate and provisionally agree by the end of February 2004 Contracts signed by 31 March 2004 Firm up Actual Contractor budgets during April/May 2004 Make first payment by the end of April 2004, agree a deduction for superannuation purposes

34. nGMS and PMS IMPLEMENTATION FINANCE Indicative Contractor Budgets Contractor Budget Spreadsheet distributed in December 2003 PCTs will need to adjust indicative global sum and MPIGs where appropriate for: Any changes in practice configuration since the reference period Changes in registered list size Temporary Patient adjustment to be updated for a five year average Any agreed staff vacancy factors Take account of any PMS returners

35. nGMS and PMS IMPLEMENTATION FINANCE Contractors Budgets post April 2004 Exeter system will automate the process Changes that will still need to be reflected by PCT are: Contractor movements between PMS/GMS Confirm registered populations are accurate Reflect any change in opt out arrangements Take account of contract terminations, withholding of monies, splits and mergers Start to record Temporary Patients numbers for future reference and allocation purposes

36. nGMS and PMS IMPLEMENTATION FINANCE Financial Management and Monitoring

37. nGMS and PMS IMPLEMENTATION FINANCE Monitoring Arrangements Need to change both National and Local Reporting arrangements. This will require: Changes to local expenditure coding structures Local Reporting and monitoring arrangements National Financial Information System Statutory Accounts Aim to produce one set of information that can meet all requirements

38. nGMS and PMS IMPLEMENTATION FINANCE Key Milestones

39. nGMS and PMS IMPLEMENTATION FINANCE Key Milestones 1. Mid-January 2004 The Department will have shared 2003/04 baselines for each funding stream 2.January 2004 PCTs started to complete the indicative contractor budget spreadsheet 3.First week in Feb 2004 DoH will have given notice of actual PCT allocations with estimated contractor global sums, GSEs and MPIGs

40. nGMS and PMS IMPLEMENTATION FINANCE 4. End of January 2004 PCTs prepared indicative financial risk management plan as they are finalising indicative contractor budgets; linked to their Local Delivery Plans 5. First week Feb 2004 DoH will have allocated the remaining premises money, for new developments, to lead PCTs 6. Feb 2004- One week after allocation recd PCTs will have calculated and shared indicative budgets with all GMS contractors

41. nGMS and PMS IMPLEMENTATION FINANCE 7. Early in 2004PCTs will have reviewed their financial ledger structure and new reporting requirements 8. End of February 2004PCTs will have been notified of changes to the Exeter system 9. End of February 2004PCTs and contractors will have agreed indicative budgets, reflecting discussions and provisional agreements about what services will be provided 10. End of March 2004PCTs will have encouraged GPs to submit claims under the Red Book

42. nGMS and PMS IMPLEMENTATION FINANCE 11. End of March 2004 The Department will have allocated the additional global sum monies to reflect the increase in employer superannuation contributions 12. From April 2004PCTs will have made monthly payments of new GMS funding to contractors 13. From April 2004PCTs will have provided FIMS returns on the new basis 14. April 2004PCTs will have made adequate year-end provision for old GMS sums in 2003/04 accounts 15. By the end May 2004PCTs will have calculated and agreed actual budgets with contractors