General practitioner Practice manager GP practices England Wales

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NHS contracts for primary medical services

Contractual routes

There are three contractual routes that NHS England can use to commission primary medical services for the population:

Contract Details 
General Medical Services (GMS) contract This is a nationally directed contract between NHS England and a practice. The new GMS contract (see 4.2) was introduced in April 2004. Currently, about 60 per cent of practices are on GMS contracts.
Personal Medical Services (PMS) contract This is a local contract agreed between NHS England and the practice, together with its funding arrangements. In England, approximately 40 per cent of practices are on PMS contracts. The GMS contract has a strong influence on the content and scope of this contract.
Alternative Provider Medical Services (APMS) contracts This allows NHS England to contract with ‘any person’ under local commissioning arrangements.


The GMS contract

Type of services What they cover 
Essential services - must be provided by all contractors This includes the management of patients who are ill or who believe themselves to be ill with acute, chronic or terminal conditions.
Additional services - normally provided by all contractors but practices can opt out of providing the services This includes cervical screening, contraceptive services, childhood vaccinations and immunisations, child health surveillance and maternity services.
Enhanced services - practices can choose whether or not to provide these services Enhanced services that are nationally commissioned through the GP contract by NHS England and legally directed by the Secretary of State are known as Directed Enhanced Services (DESs).
Community-based services - may be commissioned from practices or other qualified providers

From 1 April 2013, money previously allocated by PCTs for enhanced services transferred to CCGs (except for public health local enhanced services funding, which has been allocated to Local Authorities).

CCGs may choose to use these resources to reflect local needs and priorities, including commissioning additional community based services (which can be provided by GP practices or other qualified providers under NHS standard contracts).

Transitional local enhanced services (for 2013/14)

Before 1 April 2013, some enhanced services were specified and commissioned locally by PCTs  more commonly known as local enhanced services (LESs).

Responsibility for such services which did not expire on or before 31 March 2013 transferred to NHS England.

NHS England has directed CCGs to manage these services, now known as transitional enhanced services, on its behalf.

Mid year review points were included in the transfer arrangements giving CCGs the opportunity to decide how to use the funding beyond this point.

Local improvement schemes

CCGs do not have powers in their own right to pay for improvements in services provided under the GP contract.

CCGs can, however, apply to the relevant NHS England area team for delegated powers to use resources from their budget to pay for improvements in services provided under their GP contract or to support activities such as clinical audit or peer review.


Funding for GMS practices

There are several major funding streams for GMS practices:

Funding stream Details 
The global sum

This funds a practice for delivering essential and additional services to its registered list of patients.

The bulk of these payments are determined by an allocation formula which funds practices based on practice workload and circumstances (including patient demographics such as need (morbidity and mortality), age and gender).

Minimum Practice Income Guarantee (MPIG)

MPIG is a financial protection scheme which many practices currently receive additional income from. 

It was introduced when the contract payment structure changed in 2004.

Payments made under MPIG are called correction factor payments. From 2014/15 funding to general practice will move towards equitable funding over a seven year period. MPIG payments will be taken into account, gradually phasing them out.

The Quality and Outcomes Framework (QOF)

The QOF is a voluntary scheme that provides funding to support aspiration to and achievement of a range of quality standards, by rewarding practices for the volume and quality of care delivered to their patients.

It measures practice achievement against evidence based clinical, public health, quality and productivity and patient experience indicators.

Although voluntary, the majority of practices participate.

Practices score points according to their levels of achievement and payments are calculated on the points the practices achieve.

In 2013/14, practices can achieve a maximum of 900 QOF points, although payments will vary with the size of the practice and the prevalence of medical conditions for that practice’s population, to reflect the workload involved. For more details see the section on QOF below.

Enhaced service payments

These resource practices to provides special services that are not covered within the essential services of the contract.  

Many enhanced services were previously provided by the secondary care sector.

Seniority payments These reward a GP's experience. A GP’s seniority payment is based on their years of ‘reckonable service’ to the NHS (this is calculated from the date that a doctor first becomes registered with the GMC or equivalent authority in another European Economic Area member state).
Payments for premises

Many GP practices own their premises and make these available to the NHS for patient care.

GPs borrow the capital to build the premises and there are schemes that compensate the practice for this, for example borrowing costs (formerly known as cost rent) or notional rent reimbursement.

Payments to contractors are calculated on the amount of rent the practice would pay if renting the premises and this is agreed with the District Valuer (DV).

Other contractors rent their premises, in which case they receive rent reimbursement for actual leasehold rent. The level of reimbursement is calculated by the DV in relation to local current market rents (CMR).

NHS England area teams are responsible for rent reimbursement payments to GP contractors.

Dispensing payments

These payments only apply to those practices that provide dispensing services.

As of 18 September 2012 there were 1,086 dispensing practices serving 3.34 million NHS patients.

Private services Practices may provide private services for the administration of medications, for example travel vaccinations, life insurance medical reports and certificates and letters outside normal NHS services.

Practices are not directly funded for information technology (IT) because CCGs, on behalf of NHS England are responsible for the procurement and operational costs of practices’ IT systems.

The following table gives the approximate percentage of practice income that is attributable to the different income streams: 

Income streams Approximate percentage of practice income
Global sum (including MPIG) Up to 60%
QOF Up to 15%
Enhanced services, for example extended opening hours and annual seasonal influenza vaccinations Up to 15%
NHS England administered funds, for example premises’ reimbursements, locum fees (to reimburse practice costs relating to cover of maternity leave and so forth) and seniority payments Up to 15%
NHS incentive schemes and private services, for example GPwSI services, preparing insurance certificates, external tribunals Up to 5%
Dispensing  this only applies to dispensing practices and relies on the size of the dispensing list Up to 50%


The Quality and Outcomes Framework (QOF)

The clinical domain in QOF includes conditions such as Chronic Obstructive Pulmonary Disease (COPD), diabetes mellitus and hypertension.

QOF has seen evidence based indicators achieved by almost every GP practice in the UK to a very high level. The QOF has delivered benefits to patients through the improved monitoring and treatment of acute and chronic health problems.

The coordinated and comprehensive care patterns supported by the QOF have also helped to reduce inequalities across the UK.

Use of READ and Snomed CT codes in QOF

There are two clinical coding systems; READ and Snomed CT. READ codes are the most well known in primary care and are used in general practice. Snomed CT coding is an international coding standard and is expected to replace or subsume the READ coding system in general practice in the future.

The codes cover a wide range of topics in different categories such as:

  • signs and symptoms
  • treatments and therapies
  • investigations
  • occupations
  • diagnoses and drugs
  • appliances.

This enables the recording of episodes of care as part of a comprehensive electronic patient record.

Coding extended services: pharmacists and QOF

Community pharmacists who deliver extended services in the pharmacy may find it helpful to speak to local practices so they can include appropriate codes relevant to the practice QOF targets, on any correspondence with the practice.

Comprehensive guidance about the QOF, including a list of all of the indicators and details of the latest QOF changes is available on the NHS Employers website.