As part of the 2013-14 contract imposition, the Government in England planned far-reaching changes to practice funding. From 1st April 2014, the wide variation in core funding per patient between practices will begin to reduce. This may have a profound effect on your practice income.
Practices with above average levels of funding generally receive either large correction factor payments (as a result of the Minimum Practice Income Guarantee (MPIG) negotiated at the time of the new general medical services (GMS) contract) or above average personal medical services (PMS) funding.
From 1st April 2014, practices in receipt of correction factor payments will lose one seventh of their 2014 correction factor funding each year for 7 years. The aim is for all GMS practices to receive the same weighted price per patient by 2020-2021. This process has been set out in the 2014-2015 Statement of Financial Entitlements.
The correction factor funding will be recycled into global sum payments. Practices with a small or no correction factor should see an increase in their overall gross income, whilst those with large correction factor payments will lose funding. It is expected that the global sum will rise as a result of annual uplifts during this time as well as the result of correction factor recycling.
The GPC has produced guidance for practices and LMCs in relation to 'outlier' practices that are likely to be the worst affected.
2014-2015 Statement of Financial Entitlements (PDF from the Department of Health)
Find out how the phasing out of MPIG will affect your practice
NHS England area teams will have two years from April 2014 to review their local PMS contracts, with the pace of change on the redeployment of funding following the reviews being left to local judgement. £325m of "premium" PMS expenditure has been identified as the amount by which PMS expenditure exceeds the equivalent items of GMS expenditure.
The premium will reduce to £235m over the seven years to 2021-2022 as GMS correction factor funding is phased out and global sum funding increases. NHS England will invest the premium funding in GP services according to criteria set by NHS England, which are that the investment should:
- reflect joint AT/CCG strategic plans for primary care
- recure services or outcomes that go beyond what is expected of core general practice or improve primary care premises
- help reduce health inequalities
- give equality of opportunity to all GP practices
- support fairer distribution of funding at a locality level.
The guidance gives area teams discretion about how the funding should be invested within these criteria.
The GPC's position is that the premium expenditure should have been redistributed to core GP funding, providing greater certainty for practices and allowing them to invest for the future with greater confidence, for example by employing long-term staff and taking on new partners.
In largely leaving decisions about the process and timescales to area teams, the guidance will create further uncertainty for practices and potentially create further inequity between practices in different areas. We have made our position clear to NHS England.
We would advise LMCs to contact their area teams to discuss their plans for PMS reviews following the publication of this guidance. We have produced guidance for practices too.
NHS England has produced a presentation and guidance for area teams and regional directors:
Find out how PMS reviews will affect your practice
Read NHS England's guidance
Read NHS England's presentation
Practices with unusual circumstances
We know that there are some practices which, for legitimate reasons, receive and require greater per capita funding than global sum payments can deliver. The GPC will continue to push for these practices to be given the special consideration they need.
We will continue to work with Local Medical Committees (LMCs) to help ensure that practices in this position are brought to the attention of NHS England and clinical commissioning groups (CCGs) and handled appropriately.