Q&A for Simplification July 2012

Q&A for Simplification July 2012
Why is the Drug Tariff being simplified?
In theory, reimbursement for products dispensed is relatively simple, with
contractors being paid the reimbursement price of the product minus discount.
However, in practice, over time, exceptions have been introduced, increasing
complexity and sometimes reducing transparency as to what will be paid to
the contractor.
The DH has worked with the PSNC to simplify the reimbursement
arrangements to make them more transparent to pharmacy contractors and
where possible to reduce the amount of endorsing needed to claim payment.
Following some changes, reimbursement should more accurately reflect the
workload of pharmacy contractors and recharge to PCTs, the prescribing and
pharmaceutical service costs incurred by their prescribers’ activity.
What areas have been simplified?
The DH and PSNC have reviewed a wide range of provisions laid out in the
Drug Tariff as well as those provisions which are not detailed in the Drug
Tariff but which have developed over time. These provisions ranged from
small to larger more complex issues. Implementation of the changes is in two
phases – phase one was implemented in April and phase two in July.
In April 2012, phase one was implemented which included:
• Reimbursement for purified water
• Payment for droppers and applicators
• Reimbursement for diluents when not specifically prescribed
• Payment for oral preparations which require reconstitution from
granules or powder and the associated fee which recognises that due
to the limited stability of the reconstituted product, contractors may
need to dispense additional containers
In July 2012, phase two will be implemented, including changes to:
• The payment system to reflect the increased cost of dispensing split
• Payments for Methadone oral liquid
• Out of pocket expenses
• Broken bulk
• Other changes to the Drug Tariff - Common pack list and Category B
New payment system to reflect the increased cost of
dispensing split packs
Why is a new payment system being introduced to reflect the increased
cost of dispensing split packs?
It is recognised that more work and resources are required when a pharmacy
has to dispense a part pack compared to dispensing original packs. This
includes the time taken to ‘snip’, repackage and source the patient information
leaflet. There is also the need to purchase additional containers.
What are the changes to the payment system to recognise the increased
cost of dispensing split packs?
From 1 July, only one pack size will be listed for the majority of products in
Part VIIIA of the Drug Tariff. For some products, there may be a clinical need
to list multiple pack sizes as they are dispensed in ‘special containers’ or
because there is a clinical need for a range of quantities e.g. analgesics. The
pack size listed will be the most appropriate pack size, which will enable a
contractor to supply a complete pack (or multiples of complete packs) in the
majority of situations (the pack sizes can be found at
http://www.nhsbsa.nhs.uk/3631.aspx). With this change, the provisions
related to calendar packs will be removed and contractors will be paid for the
quantity prescribed on all occasions except in the case of special containers,
where the current provisions will remain.
Where contractors have to split a pack, they will be paid an additional
payment (10p). No additional endorsement is required to claim payment. This
payment is to contribute to the increased costs that contractor will incur in
sourcing additional containers.
Why are the calendar pack provisions being removed but not the special
container provisions?
Unlike drugs packed in special containers, calendar packs have always been
able to be supplied in the exact quantity prescribed; these provisions are
being removed to reduce the exceptions.
Removing the calendar pack provisions will lead to more snipping and
repackaging – is this not contrary to the DH aim to make dispensing
more efficient?
Not all suppliers’ packs of the same product are packed the same way, for
example some may be as a calendar pack and others may not. Therefore the
calendar pack arrangements increase complexity for contractors who need to
know whether a pack is considered a calendar pack by NHS Prescription
Services or not. By removing the provisions, contractors only need to consider
whether a pack is a special container and if not dispense the quantity
prescribed. While decisions concerning the quantity prescribed lie with the
prescriber and there may be occasions (e.g. patient safety) where the
prescriber may decide that a quantity outside the pack size listed is required,
in the majority of cases, particularly when a patient has a repeat prescription,
they can probably be prescribed a quantity corresponding to a pack size.
How is the 10p additional payment being funded?
Currently, payment for containers is at the rate of 3.24p per prescription for
every prescription (except oxygen) supplied by contractors whether or not an
additional container has had to be supplied.
The additional payment will be funded by reducing the container allowance to
1.24p. This will be paid for every prescription dispensed (as now) to pay for
other consumables used when dispensing e.g. labels and bags.
New payment system for Methadone oral liquid
Why has the payment system for methadone oral liquid been changed?
Dispensing Controlled Drugs (CDs) such as methadone involves extra work
and resources compared to non controlled drugs, such as recording in CD
registers. This is recognised by the extra payment of the controlled drugs fee.
However, it is considered that dispensing methadone oral liquid will in the
main involve additional work above standard controlled drugs, such as
significant interaction with the prescriber or clinic, daily dose dispensing even
if the patient only collects once or twice for each prescription and the supply of
a suitable measuring device outside those that should routinely be available.
What changes have been made to the payment system for methadone
oral liquid?
Under the new system, decisions related to frequency of collection will
continue to lie with the prescriber. However, contractors will have the
professional discretion to dispense (for example daily dose dispensing) as
appropriate (so long as it does not contradict a preference indicated by the
From 1 July 2012, for all prescriptions (FP10MDA or FP10) where methadone
oral liquid is prescribed, contractors will be paid:
• The professional fee and CD fee based on the number of times the
contractor has seen the patient e.g. where a prescription covers 14
days but the patient collects the medicine weekly, the contractor will
receive two professional fees and two CD fees.
• An item level fee of £4.05 to recognise the extra work involved in
dispensing methadone oral liquid (this fee will only be paid once per
prescription). Under these arrangements, contractors will no longer be
paid the professional and CD fees for dispensing in single dose
containers where prescribed for collection in bulk (this new item level
fee will cover this).
For all other items prescribed on a FP10MDA/FP10, the contractor will receive
the professional fee and CD fee (if applicable) in the usual way.
My pharmacy dispenses a large volume of instalment prescriptions and I
will lose my establishment payment because of the new way of counting
items on FP10MDA forms – is there anything I can do?
A small number of contractors, who dispense large numbers of instalment
prescriptions whose professional fees may drop due to no longer being paid a
professional fee for daily dispensing, may lose their entitlement to the
establishment payment. Temporary safeguarding measures will be put in
place to enable a contractor to claim the minimum establishment payment for
any month where their prescription volume has dropped below the threshold
for receiving the minimum establishment payment (currently 2,360 per month)
due to this change.
These measures are temporary and will be in place until either CPCF funding
arrangements are revised or July 2013 (whichever comes first).
To claim the minimum establishment payment;
• the drop in prescription volume must be related to a reduction in
payment of professional fees for dispensing of methadone only and
• will be benchmarked using historical dispensing data.
The claim will need to • Be made on the appropriate form available from the NHS Prescription
Services of the NHS Business Services Authority (NHSBSA) or at
• Be signed by the contractor.
• Be submitted to the NHS Prescription Services of the NHSBSA along
with the pharmacy’s claim form (FP34C) for that month.
• Include a declaration that there is no reason apart from reduced fees
earned from dispensing methadone that would have contributed to a
decrease in fees earned, e.g. a new pharmacy opened nearby.
Out of Pocket Expenses
Why has the out of pocket expenses (OOPE) provision been changed?
The aim of this facility is to ensure that contractors who, due to exceptional
circumstances, have incurred costs in obtaining drugs, appliances or chemical
reagents not listed in Drug Tariff Part VIIIA category A or M, Part VIIIB, Part
IXA and Part IXR and all other specials and imported products not listed do
not dispense these items at a financial loss.
Under the current system, contractors can only claim where the expense is
greater than 10p and 10p is deducted from all payments for OOPE. Further, in
recent years, contractors have endorsed OOPE on individual prescription
forms and provided a total OOPE claim on their submission form (FP34c).
NHSBSA has used the total claim submitted on the submission form to make
payment. As a result, it is not possible to identify where they are claimed by
contractors or accurately recharge these expenses to the PCT which has
incurred the charge (the PCT of the prescriber).
With these changes, claiming OOPE will be simplified and more transparent
for contractors and PCTs which have incurred the expense (the PCT of the
prescriber) will be charged the cost of the expense.
What are the changes to the OOPE provision?
From 1 July, contractors will:
• no longer need to total and submit their OOPE claim on their FP34C
submission form. NHSBSA will use the OOPE claim endorsed on
individual prescription forms to make payment.
need to endorse ‘XP’ or ‘OOP’ along with details of the claim e.g.
carriage, P&P in order to receive payment.
In addition, the current 10p deduction will be replaced with a 50p threshold for
claims. Contractors must only claim OOPE expenses above the 50p threshold
and will be paid the entire claim.
These changes will simplify the way that contractors claim these expenses
and will enable NHSBSA to accurately record where the OOPE has been
claimed and charge the expense back to the appropriate PCT. This will
increase transparency in the system and ensure that the costs incurred by
contractors are picked up by the PCT which has incurred them (the PCT of
the prescriber).
To ensure that OOPE are accurately recorded and paid, contractors must
separate prescriptions that have OOPE claims from the bulk of their
prescriptions using the red separators currently used for broken bulk, specials
and high cost items. Updated red separators will be sent to contractors in
June for use for July’s dispensed prescriptions.
Broken Bulk
Why has the broken bulk provision been changed?
The aim of the broken bulk provision is to ensure a dispensing contractor is
not left with a quantity of a product for which there may be little demand and
which cannot be readily disposed of and hence paid for. By claiming broken
bulk, the contractor is paid for the full quantity purchased; however, it is
considered that all subsequent prescriptions received during the next six
months have been supplied from the remainder of the pack and no further
payment will be made (until the remainder has been used up).
Category A and M products are commonly prescribed generics for which
contractors make a large number of unsuccessful claims, and as such is a
significant waste of NHSBSA resources. The cost of maintaining broken bulk
on products listed in categories A and M is disproportionate to maintaining the
What are the changes to the broken bulk provision?
From 1 July 2012, broken bulk will not be allowed on products listed in
categories A and M unless the reimbursement price of the smallest pack size
listed in the Drug Tariff is equal to or more than £50.
I have received a prescription for an item in category A, I only have to
dispense part of the pack and will not need the rest of it. If I cannot claim
broken bulk, can I refuse to dispense the product?
No. As laid out in Schedule 1 of the NHS (Pharmaceutical Services)
Regulations 2005 (Terms of Service of Pharmacists), a contractor is required
to provide drugs ordered with reasonable promptness.
Further, ‘Standards of conduct, ethics and performance’ issued by General
Pharmaceutical Council (GPhC) in September 2010 states that a pharmacist
must make sure that their professional judgement is not affected by personal
or organisational interests, incentives, targets or similar measures.
Other changes to the Drug Tariff
What are the other changes to the Drug Tariff?
Part VII of the Drug Tariff - ‘Drugs with Common Pack’
Part VII of the Drug Tariff lists the ‘Drugs with Common Pack’ and lists 28
products with a corresponding pack size (as of April 2012). Where available
and where appropriate, NHSBSA processing staff uses the pack size
endorsed by the contractor. However, where a contractor has not endorsed a
pack size and there are multiple pack sizes listed in the Drug Tariff, the
NHSBSA processor will firstly check Part VII and if the product is listed, will
base the payment on the pack size listed. Where a product is not listed in Part
VII and the prescription is not endorsed, the processor will assess from the
pack sizes available. Where a pack size equal to the quantity prescribed
exists this will be selected, if such a pack is not available then the next largest
pack size to the quantity prescribed will be selected. Where the available pack
sizes are special containers then in the absence of the dispensing contractor’s
endorsement the processor will select the best fit of available pack sizes to
the prescribed quantity.
The presence of this list means that during the pack assessment stage, the
NHSBSA processor must check the list before moving on to select an
appropriate pack size for the majority of items.
From July 2012, Part VII will be deleted from the Drug Tariff. Where multiple
pack sizes are listed in the Drug Tariff and a contractor has not endorsed the
prescription form stating the pack size used, the NHSBSA processor will
assess from the pack sizes available. Where a pack size equal to the quantity
prescribed exists this will be selected, if such a pack is not available then the
next largest pack size to the quantity prescribed will be selected. Where the
available pack sizes are special containers then in the absence of the
dispensing contractor endorsement the processor will select the best fit of
available pack sizes to the prescribed quantity.
Category B
Category B of Part VIIIA of the Drug Tariff has been intended for drugs which
have declined usage over time. As no drug has been listed in Category B
since 2005, it will be deleted from the Drug Tariff from 1 July 2012.