The Department of Health has launched a consultation on aspects of a new system of pricing for National Health services, when Monitor takes over responsibility for the National Tariff in April 2014.

Specifically, it is seeking views on which service providers will be able to "formally object" to Monitor's planned system, and also the threshold at which the healthcare regulator will then be required to act.

Monitor will be developing plans for the National Tariff alongside the NHS Commissioning Board (NHSCB), but must allow 28 days for commissioners and service providers to raise any objections.

If a certain number of complaints is reached, then it must either reconsider its ideas or refer the proposed methodology to the Competition Commission for a decision.

According to the government, an effective pricing system is critical to achieving value for money, and the National Tariff will include prices for specified services or bundles of services, delivered to prescribed standards. 

But "It is not about the cheapest price. It is about paying a fair price for the services patients want, delivered to high standards," the DH stressed.

Separate duties

Monitor, it claims, is well placed to lead the pricing system, as its "independence and objectivity will ensure that prices reflect provider costs and structures appropriately".

As such, its duties will include developing the methodology for setting prices, setting out the prices, and setting the rules for local price setting, where services are not included in the National Tariff.

Because of their clinical expertise and understanding of patient needs, commissioners will describe "what currencies [the unit of reimbursement for services] they will need in contracting for health services, while ensuring these are aligned with their priorities for service improvement".

The NHSCB will be responsible for defining the scope of the tariff, determining currencies, and setting rules to variations to the tariff, the DH said.

The consultation is open until December 21.