Guidance

NHS providers and commissioners: submit locally determined prices to Monitor

How to submit details of local variations and (where appropriate) local prices to Monitor, and how to seek approval of a local modification to a nationally determined price.

Background

The prices that NHS commissioners pay providers for healthcare services can be determined locally rather than nationally in a range of circumstances.

This guide for providers and commissioners of NHS-funded services documents the submissions that must be made to Monitor to comply with the requirements of the National Tariff.

Further information on locally determined prices, which should be read prior to submitting the information, is contained in the following documents:

Types of locally determined prices

Information must be submitted to Monitor on:

  • local variations: adjustments to national prices or currencies that are agreed by providers and commissioners
  • local modifications: increases in nationally determined prices for services that are uneconomic for structural reasons, which must be approved by Monitor
  • local prices: locally negotiated prices for services without national prices where there is a national currency

Information on services with no national currency does not need be to submitted Monitor.

On behalf of commissioners, Monitor publishes all local variations.

Local variations

Submit local variations to Monitor

Local variations must be submitted to Monitor by commissioners. They do not need approval from Monitor.

Commissioners should:

  • complete the local variation template (XLSM, 246KB)

  • submit the template on Monitor’s online portal by 30 June 2016, or for local variations agreed after that date, within 30 days of the variation agreement

You can use this completed example to help you:

Local modifications

As a healthcare provider, you may sometimes face unavoidable, structurally higher costs that would make it uneconomic to provide a service at the national price.

In this case, you may propose a local modification to increase the price you are paid for that service. Local modifications are intended to ensure that healthcare services can be delivered where they are needed by patients, even if the reasonably efficient cost of providing services is higher than the national price.

All local modifications must be approved by Monitor.

Types of local modifications

Local modifications can be approved following:

  • agreements: where a provider and commissioner(s) agree to increase the price for a service
  • applications: where a provider can’t reach an agreement with the commissioner(s) and applies to Monitor for an increase

Requirements

For both agreements and applications, Monitor must be satisfied that it would be uneconomic for a provider to provide a service without a local modification.

This means your local modification agreement or application submitted to Monitor must demonstrate a high standard of analytical rigour and includes supporting evidence. If it doesn’t, you’ll be asked to re-submit the proposal or withdraw it.

For local modification applications submitted in 2016/17 to be granted and take effect on 1 April 2017, providers should submit an application to Monitor by 30 September 2016.

Submit local modifications to Monitor

Commissioners and providers should submit local modifications agreements, while applications should be submitted by providers. For details of what evidence to provide, see section 6.3 of the National Tariff and the guidance on locally determined prices.

You should:

Monitor will publish approved local modifications when they become available.

Local prices

Submit local prices to Monitor

For services with national currencies without national prices, where commissioners and providers use that currency as a basis for agreeing local prices, the providers should submit details of those prices to Monitor.

Where commissioners and providers agree a price without using the national currency, commissioners must instead submit a local variation template.

The list of national currencies without national prices is set out in Annex A of the National Tariff. See section 6.4.2. of the National Tariff for the relevant rules.

Providers should: