1. 16 February 2004 nGMS and PMS FINANCE Michael Munt

2. 16 February 2004 2 Participating Text – Activates the free text tools Pointer – Activates the pointer Only 1 tool can be active at a time Check Mark – on the whiteboard Additional options – on the whiteboard Clear Whiteboard

3. 16 February 20043 nGMS and PMS FINANCE Michael Munt

4. 16 February 2004 4 nGMS and PMS IMPLEMENTATION FINANCE Overview Financial Arrangements Contractors - Statement of Financial Entitlements Allocations to PCTs Contractor Budgets

5. 16 February 2004 5 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 Delivery Plan

6. 16 February 2004 6 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

7. 16 February 2004 7 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

8. 16 February 2004 8 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

9. 16 February 2004 9 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

10. 16 February 2004 10 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

11. 16 February 2004 11 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

12. 16 February 2004 12 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

13. 16 February 2004 13 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%

14. 16 February 2004 14 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

15. 16 February 2004 15 nGMS and PMS IMPLEMENTATION FINANCE Other entitlements will cover: Directed Enhanced Services Locum Payments Seniority payments (delayed retirement) 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

16. 16 February 2004 16 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

17. 16 February 2004 17 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

18. 16 February 2004 18 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

19. 16 February 2004 19 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

20. 16 February 2004 20 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

21. 16 February 2004 21 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

22. 16 February 2004 22 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.

23. 16 February 2004 23 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. Planned spending needs to be signed off by the PEC. Need to discuss with the local LMC

24. 16 February 2004 24 nGMS and PMS IMPLEMENTATION FINANCE Quality and Outcomes Framework Three funding elements for the QOF Quality Preparation - to be allocated in Main Allocations 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

25. 16 February 2004 25 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

26. 16 February 2004 26 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

27. 16 February 2004 27 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

28. 16 February 2004 28 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 budgets 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

29. 16 February 2004 29 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

30. 16 February 2004 30 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

31. 16 February 2004 31 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