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Analysis: QOF devaluation leaves practices out of pocket

The value of the QOF is shrinking. Pulse has learned that a small change in the way practice income from the framework is calculated means that practices in England will lose thousands of pounds this year, even if they maintain their achievement levels.

QOF Feature image

Managers have ignored calls from the GPC to increase the value of a QOF point to match the rise in average practice list size this year.

While this may seem an academic change at first, in effect, NHS England has cancelled out the 0.28% funding rise for GPs this year – a small but much-needed increase of around £2,000 for the average practice.

Practice list sizes are on the increase, with a rise of 2% last year, and experts are warning that NHS England’s refusal to increase the QOF point value sets a dangerous precedent that is likely to lead to year-on-year reductions in practice income from the framework.

Sting in the tail

The change comes after the Department of Health decided to update annually the Contractor Population Index (CPI) calculation last year.

The CPI uprates QOF points to ensure that a practice with a larger-than-average population will be paid proportionally more under QOF; for instance, a 10,000-patient practice would get twice as much for each QOF point as a practice with 5,000 patients, even if their performance is the same.

Ministers claimed the change to the CPI would ensure ‘the price of QOF is transparent’. But the average rise in practice population is rising at 2% a year, outstripping the value of a QOF point. In 2013/14, in order to offset the 17.3% population size increase, the value of the QOF point for an average-sized practice was also raised by 17.3%.

But the sting in the tail came this year. The average practice population size will increase again by 2% to 7,052, but NHS England says it will not raise the value of a QOF point to match it in 2014/15.

An NHS England spokesperson says: ‘The GPC raised this issue during the negotiations for the 2014/15 contract. However, the negotiating parties agreed that they would consider the issue further with a view to addressing it in future years. As a consequence, this issue did not feature in the final negotiated agreement with the GPC.’

Dr Gavin Jamie, a GP in Swindon who runs the QOF Database website, said the refusal to increase the value of a QOF point would lead to practices losing out on thousands of pounds this year.

He says: ‘Even with the new, slimmer QOF, this decrease will wipe out the majority of the 0.28% pay review body uplift to GP payments this year.’

‘For an average practice it is a loss of almost £2,000.’

Worrying precedent

Dr Jamie warns this sets a precedent for future years. He says: ‘As the current regulations stand, this will become an annual event. As practices tend to become larger, the value of a point will drop. For many practices this could have a bigger effect than the withdrawal of the MPIG.’

Luke Bennett, a partner at Francis Clark accountants, says: ‘Effectively, this change means the value of a QOF point is going down by 2% if your list size stays the same, as it is being divided by a bigger number.

‘For an average practice it is a loss of almost £2,000.’

The GPC admits the change will hit practices hard, but insists it was powerless to stop it.

Deputy chair Dr Richard Vautrey says: ‘The contract negotiations were about the existing resources. It was the DDRB and the DH that failed to uplift the value of the contract, including the QOF. The 0.28% award was derisory and this, together with the DH-imposed changes to CPI, which they have subsequently refused to negotiate on, are having a negative impact on practice funding.’

Dr Vautrey adds: ‘We now need to find a way of reconciling the loss for the profession and also a way to ensure that this is not a recurring issue every year.’

Why is the value of QOF falling?

 How does practice list size affect the value of a QOF point?

The Contractor Population Index, like most things that are working well, has not attracted much attention until now. Its purpose has been to make sure that the cash value of a QOF point takes into account the size of the practice. A practice with a 10,000 population should, all other things being equal, get twice as much for each QOF point as a practice with 5,000.

What was the original arrangement?

Until April 2013 an ‘average’ practice in England was considered to have 5,891 patients (the three devolved nations used their own values). Effectively, QOF was paid in blocks of 5,891 patients. In the first year of QOF, a point was worth £120 per 5,891 patients – a shade over 2p per patient. This value gradually increased over the following years. The average list size did not actually matter, we were effectively being paid per patient . It simply made the contract easier to present when larger numbers were used.

What happened in 2013/14?

In the 2013/14 contract imposition, the Department of Health proposed to change the 5,891 figure using the actual average list size, which it said would be cost-neutral for 2013/14. This turned out to be an increase of 17.3% to 6,911 – and the effective value of a QOF point for an average-sized practice went up accordingly, from £133.76 to £156.42.

However, there was no commitment for it to be cost-neutral in future years and NHS England has now refused to increase the value of the QOF point for this year – despite the average list size increasing by 2% to 7,052 as of 1 January 2014.

How will it affect future years?

As regulations stand this would be an annual event. As practices tend to become larger, the value of a QOF point will drop.

Dr Gavin Jamie is a GP in Swindon and runs the QOF Database website

Angry response

However, there have been accusations that the GPC has failed GPs in England on this issue. In Scotland, Wales and Northern Ireland the GPC has managed to negotiate with ministers an automatic increase in the value of a QOF point, to ensure the value of the framework remains constant for practices in these countries.

GPs in England have reacted with anger. Dr Richard Jenkins, a GP in Burntwood, Staffordshire, says: ‘Would our GPC elected representatives care to publicly apologise for mismanaging the negotiations?’

Dr Thomas Quinn, a GP in Lewisham, south-east London, adds: ‘The GPC has let us down again. Our GP leaders… have been too compliant for too long with the Government and the DH, which is adversely affecting primary care.’

The controversy comes after a tumultuous few months for the QOF, with practices in some areas allowed to opt out of the framework altogether before April, while a series of miscalculations in last year’s payments has left some practices facing clawbacks and others an underestimate of the QOF income they are due.

Last month, the Health and Social Care Information Centre used list sizes from 2014, instead of 2013, to calculate practices’ QOF payments this year, meaning practices were given a QOF payment estimate of 2% less than they were due. After the miscalculation was identified, the HSCIC sent a letter to practices that confirmed ‘GP practices that have already declared achievement will need to do so again. We apologise for any inconvenience caused.’

QOF payment chaos

Meanwhile, PMS practices were told they would have a surprise reduction in their QOF payments for 2013/14, after NHS England sent a letter to area teams in April explaining that a PMS practice with a 6,200 patient list has had its annual payment deductions undervalued by around £2,300 due to the errors connected to list sizes.

All this has come at a time when the future of QOF appears to hang in the balance. The 2014/15 contract reduced the size of the framework by 40% and, as Pulse has previously reported, some areas are even looking at replacing it with a local contract.

In Somerset, the CCG, LMC and local area team are currently finalising plans for a local contract, which will remove the requirement to undertake QOF work.

If the QOF continues to shrink in value, NHS England may find many other areas looking to follow suit.


Five tips to mitigate your QOF losses

1. List size is the key driver for most sources of income. If you want to increase your patient list size, your existing patients are often your best advert. Do they know you are keen to take on new patients, or are you giving the impression you are too busy?

2. Make sure you are being paid for the work you are already doing – accurate read coding is vital.

3. The new unplanned admissions DES is worth a maximum of £2.87 per patient. Allocate responsibility to a partner for ensuring this valuable source of income is obtained in full.

4. Flexibility of staff helps to keep costs down. For example, train your receptionists to take bloods.

5.  Encourage partners to cover each other rather than use external locums.

Luke Bennett is a partner at Francis Clark accountants.