Monitor questions payment by results for mental health

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The mandatory rollout of a national payment by results tariff for mental healthcare providers in 2014-15 has been dropped by Monitor, HSJ has learned.

The market regulator also questioned the long-term future of a national payment by results tariff as it reviews payment systems across the NHS.

It said in a statement: “No decision has been made on whether setting national prices in mental health is appropriate in the longer term.”

Monitor also said it no longer used the phrase “payment by results”, which was a term developed by the Department of Health.

A mandatory tariff for mental health was originally planned for this year, but was delayed until April 2014. The idea has been dogged by concerns over data quality, particularly around the quality of the minimum mental health dataset which would be used to determine funding levels.

Under the plan, patients will be “clustered” into 21 categories based on severity of condition. There will be local prices agreed between providers and clinical commissioning groups, rather than a national price. However, many feared both the dataset and clustering were too unreliable to ensure payments were fair.

The regulator wants trusts to continue their work on clustering and improving the quality of data ahead of it making a final decision on payment systems across the NHS.

Monitor revealed its new policy after Stephen Dalton, chief executive of the Mental Health Network, said he believed the rush to implement such a system could be “dangerous”.

Mr Dalton said there needed to be a “reality check” on whether commissioners were really ready to use a tariff.

He said he feared commissioners were less ready now for a launch of a mandatory tariff than they had been before the disruption caused the health reforms brought about by the Health and Social Care Act 2012. The financial landscape had also made implementation more difficult, he added.

“At a time when both commissioners and providers are struggling with their finances the idea of rushing headlong into a policy which was something designed in a different time could be dangerous,” Mr Dalton said.

Mr Dalton said he was not opposed to the idea of payment by results or a complex outcomes based payment system but he said there was a risk of “unintended outcomes” due to activity and financial ceilings which would have to be put in place by commissioners.

He added: “We embarked on a project in a different vessel than we are in now and we need to check our enthusiasm for it.

“If you are going to have a market you have to have a more complex payment system than you have at the moment. You have to have a system that allows market entry.

“We haven’t had the success we thought there would be in the acute sector. Why do we think it will be any different in mental health? There is neither the money nor the levers to pull to bung in money like what has happened with acute trusts. There is no [strategic health authority] sitting on a pile of money.”

A spokesman for Monitor said it was working to develop a set of “overarching principles” that would apply to all NHS services.

He added: “Setting national prices is just one of the tools that can be used within the payment system. As part of Monitor’s new responsibilities for the payment system as a whole, we will not be setting national prices in mental health in 2014-15.

“In future we will research and develop integrated care payment models that include all care needs such as dementia, as well as crisis response teams working along side emergency services. We will also take stock of existing payment models, of which mental health is part of, current pilots to build the evidence base, as part of the long term strategy for payment and incentives.”

Original article from Health Service Journal