This site is intended for health professionals only

LMC negotiates funding support for PMS practices to revert to GMS contract

Exclusive A local area team has said it will provide financial support for any PMS practices that want to revert to the GMS contract rather than face the uncertainty of taking part in the upcoming review of PMS contracts, Pulse has discovered.

Essex LMC negotiated a deal with NHS England for its 103 PMS practices to convert to a GMS contract and receive transitional support payments over a seven-year period if they inform the area team of their intentions by 31 May.

It deal follows NHS England tasking area teams with ‘redeploying’ £260m worth of PMS funding over a two-year period, which GP leaders warned was the ‘death knell’ for the alternative contract option.

GP leaders welcomed the agreement, and said they hoped other local area teams would follow suit.

The transitional funding in Essex will be based on the ‘premium funding’ the practice received above and beyond what an equivalent GMS practice is paid and, similarly to the planned withdrawal of minimum practice income guarantee (MPIG) from GMS practices, it would be phased out over a seven-year period.

The money clawed back in the process would then be held in a ringfenced fund that could only be used to fund general practice in Essex, as opposed to going back into NHS England’s central budget.

In a letter to practices, Essex LMC chair Dr Brian Balmer said the LMC proposed the deal to protect £10m identified by NHS England as being the ‘premium’ amount paid to PMS practices in Essex above and beyond GMS counterparts.

The Essex area team is planning for this money to be reviewed during the current financial year and funding that is not found to be tied to a specific service will be redeployed within a three-year period.

Dr Balmer wrote: ‘The PMS review process is likely to be lengthy and bureaucratic and result in substantial levels of funding being removed from affected practices. NHS England believes that nationally there is £325m additional investment in PMS in comparison to GMS, of which the Essex share is £10m.’

‘PMS practices have two options: They can remain in PMS and seek to influence the outcome of their PMS review; or they can revert to a GMS contract.’

He added: ‘All the indications are that PMS practices will suffer a significant loss of income following the PMS review process.’

PMS practices always have the right to return to GMS but, said Dr Balmer, ‘under normal circumstances’ the option seems ‘even less satisfactory’ than a PMS review. This is because the MPIG does not apply to GMS practice that have reverted from PMS, meaning that for most practices the switch would result in ‘an immediate and substantial loss of income’.

The letter said: ‘However, during a constructive meeting with the Essex area team to discuss a proposal put forward by the LMCs, a significant concession was secured with regards to a return to GMS. This has been confirmed in principle by the area team in a subsequent letter which sets out the conditions that would apply if a PMS practice chooses to revert to a GMS contract from April 2014.’

‘These concessions will only be available for a limited period of time. To take advantage of the Essex Factor payments, practices will need to have formally agreed to revert to GMS by no later than 31 May 2014. The LMC’s understanding is that practices choosing to exercise their right of return to GMS after this date will have no access to transitional funding.’

Speaking to Pulse, Dr Balmer said: ‘We put a number of proposals in front of the area team and after a bit of negotiation and a bit of manouvering they basically said “yes, this is possible” and we have put something together which we think is a reasonable offer for our PMS practices. The alternative is extremely uncertain and could be a cliff edge of financial reduction, a very sudden chop of financial resources.’

Asked whether taking up the offer is gambling on the outcome that the PMS funding would otherwise definitely be cut, Dr Balmer said: ‘Well, individual practices may decide to say no, we will go through the review and try to hang onto our PMS funding, but I haven’t known anybody, in LMCs or in NHS England, who thinks PMS is going to keep its premium funding. It’s a theoretical possibility but I would be astonished.’

He added: ‘I don’t know how many practices will consider it to be a good idea. I am hoping that they will have enough time to consider it and take proper professional advice because that is key. We cannot make this decision for practices, they are on individual contracts and they need to look at their figures themselves.’

‘The idea is also to keep the funding in Essex. This isn’t national money, this is a local deal.’

GPC deputy chair Dr Richard Vautrey said: ‘LMCs around the country are talking to their respective area teams about the proposed PMS reviews and one of the options we have been encouraging is the movement back to GMS with some form of transitional payment similar to GMS correction factor payments.’

‘This would provide greater stability to PMS practices, treats them fairly in comparison with GMS practices and reduces the workload for area teams in that it radically simplifies the review process. The Essex plan is to be welcomed and we hope that other area teams will follow suit in enabling this as an option.’

‘There will always be some practices that are better suited for PMS, particularly those serving atypical populations in comparison with the national average profile, but for many practices a move back to GMS would be sensible.’

The proposals for the ‘Essex Factor’ are:

  • The practice’s PMS Premium is calculated as the difference between their current PMS baseline (which includes all historic growth money) and GMS global sum payments the practice would receive under GMS arrangements.
  • PMS practices are not entitled to correction factor payments on their return to GMS. Instead, the practice’s PMS Premium will be converted to transitional funding (to be known as the Essex Factor).
  • Once in GMS, the Essex Factor payments will directly mirror the arrangements applying to correction factor payments. This means transitional funding will reduce by 1/7th each year, commencing 1 April 2014.
  • The annual reduction in Essex Factor payments will be used to create a General Practice Transformation Fund.
  • The General Practice Transformation Fund will be held by the Area Team and will be available to all practices in Essex to support developments in line with the Essex Primary Care Strategy. The LMCs will have a key role in ensuring that this funding is used effectively to benefit Essex practices.

Click here to read the letter to Essex PMS practices

Source: Essex LMC