Monitor and NHS England are consulting on changes to the NHS national tariff aimed at encouraging the development of innovative new models of care for patients.

They are proposing new rules, to come into force next year, under which the 2014/15 national tariff will allow local experiments in ways of paying for NHS-funded services that enable better integration of care, so that services are less fragmented and easier for patients to access.

Currently, apart from block contracts, local price-setting accounts for about a quarter of the £67 billion covered by the NHS payment system. The draft proposals for 2014/15 put forward by NHS England and Monitor will encourage the widespread use of “flexible but transparent” local approaches, they say.

The agencies have agreed that “it is reasonable” to expect providers to be able to make annual efficiency savings of 4%. The 2014/15 tariff will also take account of rising NHS costs of 2.1% - so, on average, the prices paid to provides for services next year should go down by 1.9%. “This releases funds for commissioners to buy more services for patients,” say NHS England and Monitor.

“We plan to finalise our proposals for the national tariff in December and for these to come into effect in April 2014. For the future, Monitor and NHS England will set out a development programme for a payment system that seeks to encourage innovative approaches to healthcare that promote wellbeing as well as treating illness,” they add.

Meantime, they also say that, having listened to the views of providers and commissioners, they propose next year to improve incentives to manage the growth in emergency admissions to hospitals, and encourage the treatment of more patients in the community. 

Specifically, they propose to make two important changes to the rule under which providers are paid 30% of the tariff price for each emergency admission over an agreed baseline, with the remaining 70% being retained by commissioners to invest in keeping patients out of hospital.

First, where there have been significant local increases in emergency admissions outside the control of providers, commissioners will be required to agree a revised baseline before the marginal rate kicks in.

Second, NHS England will ensure that the money retained by commissioners through the application of the rule will be spent transparently and effectively to enable more patients to be treated in community settings.