Health and Social Care Bill

House of Commons

Session 2010 - 11
Internet Publications
Other Bills before Parliament

Health and Social Care Bill

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Part 3 — Economic regulation of health and adult social care services
Chapter 5 — Pricing
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(7)
A power under subsection (5) (including as it applies by virtue of subsection
(6)) may be exercised only while the designation has effect.
(8)
Subsection (5) does not prevent Monitor from exercising the powers conferred
by sections 95 and 96 (discretionary requirements and enforcement
undertakings) in relation to conditions included under subsection (2).
5
(9)
Where Monitor includes a condition under subsection (2), it may also make
such incidental or consequential modifications as it considers necessary or
expedient of any other condition of the licence concerned which is affected.
(10)
Where Monitor includes a condition under subsection (2) by modifying a
standard condition of the licence concerned, the modification does not prevent
10
any other part of the condition from continuing to be regarded as a standard
condition for the purposes of this Chapter.
(11)
A reference in this section to failing to discharge functions includes a reference
to failing to discharge those functions properly.
(12)
Omit section 52 of the National Health Service Act 2006 (failing NHS
15
foundation trusts); and in consequence of that, omit—
(a)
section 39(1)(f) of that Act (copy of notice under section 52 of that Act
to be on register), and
(b)
paragraph 22(1)(f) of Schedule 7 to that Act (copy of that notice to be
available for public inspection).
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Chapter 5
Pricing
103
Price payable by commissioners for NHS services
(1)
If a health care service is specified in the national tariff (as to which, see section
104), the price payable for the provision of that service for the purposes of the
25
NHS is—
(a)
the price specified in the national tariff for that service, or
(b)
where the national tariff specifies a maximum price for that service,
such price not exceeding that maximum as the commissioner and the
provider may agree.
30
(2)
If a health care service is not specified in the national tariff, the price payable
for the provision of that service for the purposes of the NHS is such price as is
determined in accordance with the rules provided for in the national tariff for
that purpose.
104
The national tariff
35
(1)
Monitor must publish a document, to be known as “the national tariff”,
which—
(a)
specifies certain health care services which are or may be provided for
the purposes of the NHS,
(b)
specifies the method used for determining prices, or maximum prices,
40
for the provision of those services for those purposes,
(c)
specifies the price, or maximum price, payable for the provision of each
of those services for those purposes, and

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(d)
provides rules for determining the price payable for the provision for
those purposes of health care services which are not specified under
subsection (1)(a).
(2)
The national tariff must also provide for rules under which the commissioner
of a health care service specified in the national tariff and the providers of that
5
service may agree to vary—
(a)
the specification of the service under subsection (1)(a), or
(b)
the price or maximum price specified under subsection (1)(c).
(3)
The national tariff must include guidance as to the application of rules
provided for under subsections (1)(d) and (2).
10
(4)
A health care service specified in the national tariff may comprise two or more
services which together constitute a form of treatment.
(5)
Different methods may be specified under subsection (1)(b) for different
descriptions of health care service.
(6)
The national tariff may, in the case of a specified health care service or health
15
care services of a specified description, specify different prices or different
maximum prices—
(a)
according to whether the service has been designated under section 69;
(b)
in relation to different descriptions of provider.
(7)
The national tariff may not specify a price, or a maximum price, for the
20
provision of a health care service pursuant to the functions of the Secretary of
State or a local authority under section 2A or 2B of, or Schedule 1 to, the
National Health Service Act 2006 (public health services).
(8)
The national tariff has effect for such period as is specified in the national tariff
(or, where a new edition of the national tariff takes effect before the end of that
25
period, until that new edition takes effect).
(9)
In exercising its functions under this Chapter, Monitor must (in addition to the
matters specified in section 54) have regard to the objectives and requirements
for the time being specified in the mandate published under section 13A of the
National Health Service Act 2006.
30
105
Consultation on proposals for the national tariff
(1)
Before publishing the national tariff, Monitor must send a notice to—
(a)
each commissioning consortium,
(b)
each licence holder, and
(c)
such other persons as it considers appropriate.
35
(2)
Monitor must also publish the notice.
(3)
The notice must specify—
(a)
the health care services which Monitor proposes to specify in the
national tariff,
(b)
the method or methods it proposes to use for determining prices, or
40
maximum prices, payable for the provision of those services,
(c)
the price or maximum price for each of those services that is
determined by using the applicable method, and

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(d)
the rules for which Monitor proposes to provide for determining the
price payable for the provision for the purposes of the NHS of health
care services not specified under subsection (3)(a).
(4)
The notice must also specify the rules for which Monitor proposes to provide
in the national tariff under which the commissioner of a health care service and
5
a provider of the service would be entitled to vary—
(a)
the specification of the service in the national tariff, or
(b)
the price or maximum price specified in the national tariff.
(5)
The health care services specified for the purposes of subsection (3)(a) are only
such services as the National Health Service Commissioning Board considers
10
should be so specified and—
(a)
as the Board and Monitor agree will be so specified, or
(b)
in default of agreement, as are determined by arbitration as being
services that will be so specified.
(6)
The method specified for the purposes of subsection (3)(b) is only such method
15
as Monitor considers should be so specified and—
(a)
as Monitor and the Board agree will be so specified, or
(b)
in default of agreement, as is determined by arbitration as being the
method that will be so specified.
(7)
The prices, or maximum prices, specified for the purposes of subsection (3)(c)
20
are only such prices or maximum prices as Monitor considers should be so
specified and—
(a)
as Monitor and the Board agree will be so specified, or
(b)
in default of agreement, as are determined by arbitration as being the
prices or maximum prices that will be so specified.
25
(8)
The rules specified for the purposes of subsection (3)(d) are only such rules as
Monitor considers should be so specified and—
(a)
as Monitor and the Board agree will be so specified, or
(b)
in default of agreement, as are determined by arbitration as being the
rules that will be so specified.
30
(9)
The rules specified for the purposes of subsection (4) are only such rules as the
National Health Service Commissioning Board considers should be so
specified and—
(a)
as the Board and Monitor agree will be so specified, or
(b)
in default of agreement, as are determined by arbitration as being the
35
rules that will be so specified.
(10)
A notice under this section must specify when the consultation period in
relation to the proposals ends; and for that purpose, the consultation period is
the period of 28 days beginning with the day after that on which the notice is
published under subsection (2).
40
(11)
For the purposes of subsection (1) in its application to the first performance of
the duty under that subsection, the reference to licence holders is to be read as
a reference to such persons as are at that time providing health care services for
the purposes of the NHS.

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106
Responses to consultation
(1)
If Monitor receives objections from one or more commissioning consortia or
licence holders to a method it proposes under section 105(3)(b), Monitor may
not publish the national tariff unless—
(a)
the conditions in subsection (2) are met, or
5
(b)
where those conditions are not met, Monitor has made a reference to
the Competition Commission.
(2)
The conditions referred to in subsection (1)(a) are—
(a)
the objection percentage for commissioning consortia is less than the
prescribed percentage,
10
(b)
the objection percentage for licence holders is less than the prescribed
percentage, and
(c)
the share of supply percentage is less than such percentage as may be
prescribed.
(3)
In subsection (2)—
15
(a)
the “objection percentage” is the proportion (expressed as a percentage)
of commissioning consortia or (as the case may be) licence holders who
objected to the proposed method, and
(b)
the “share of supply percentage” is the proportion (expressed as a
percentage) of licence holders who objected to the proposed method,
20
weighted according to their share of the supply in England of such
services as may be prescribed.
(4)
A reference under subsection (1)(b) must require the Competition Commission
to determine whether the method proposed under section 105(3)(b) is
appropriate.
25
(5)
The functions of the Competition Commission with respect to a reference
under this section are not to be regarded as general functions of its for the
purposes of Part 2 of Schedule 7 to the Competition Act 1998; instead, Schedule
10 (procedure on a reference under this section) has effect.
(6)
Regulations prescribing a percentage for the purposes of subsection (2)(c) may
30
include provision prescribing the method used for determining a licence
holder’s share of the supply in England of the services concerned.
(7)
Where subsection (10) of section 105 applies, references in this section to licence
holders are to be construed in accordance with that subsection.
107
Determination on reference under section 106
35
(1)
In carrying out a determination on a reference under section 106, the
Competition Commission must have regard, to the same extent as is required
of Monitor, to the matters to which Monitor must have regard in carrying out
the functions of its to which the determination relates.
(2)
In carrying out the determination, the Competition Commission must also
40
have regard to such representations as are made to it by licence holders who
made objections to Monitor in accordance with paragraph 2 of Schedule 10
about the method proposed under section 104(1)(b).
(3)
In carrying out the determination, the Competition Commission—
(a)
may also have regard to matters to which Monitor was not able to have
45
regard in the case to which the determination relates, but

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(b)
must not, in the exercise of the power under paragraph (a), have regard
to a matter to which Monitor would not have been entitled to have
regard in that case had it had the opportunity to do so.
(4)
The Commission may determine that the method proposed under section
104(1)(b) is not appropriate only if it is satisfied that Monitor’s decision to
5
propose the method was wrong on one or more of the following grounds—
(a)
that Monitor failed to have regard to the matters referred to in
subsection (1),
(b)
that the decision was based, wholly or partly, on an error of fact,
(c)
that the decision was wrong in law.
10
(5)
Where the Commission determines that the method proposed under section
104(1)(b) is appropriate, Monitor may use that method for the purposes of the
national tariff accordingly.
(6)
Where the Commission determines that the method proposed under section
104(1)(b) is not appropriate, it must remit the matter to Monitor for
15
reconsideration and decision in accordance with such directions as the
Commission may give.
(7)
A direction under subsection (6) may, in particular, require Monitor to make
such changes to the method in question as are specified in the direction.
(8)
A determination on a reference under section 106—
20
(a)
must be contained in an order made by the Commission,
(b)
must set out the reasons for the determination, and
(c)
takes effect at the time specified in the order or determined in
accordance with provision made in the order.
(9)
The Commission must give notice of a determination on a reference under
25
section 106 to—
(a)
Monitor,
(b)
the National Health Service Commissioning Board, and
(c)
such licence holders as made representations in accordance with
paragraph 2 of Schedule 10.
30
(10)
The Commission must also publish the determination; but it must exclude
from what it publishes information which it is satisfied is—
(a)
commercial information the disclosure of which would, or might,
significantly harm the legitimate business interests of an undertaking
to which it relates;
35
(b)
information relating to the private affairs of an individual the
disclosure of which would, or might, significantly harm that person’s
interests.
108
Changes following determination on reference under section 106
(1)
Where the Competition Commission remits a matter to Monitor under
40
subsection (6) of section 107, Monitor must make such changes to the method
to which the matter relates as it considers necessary, having regard to the
reasons specified for the purposes of subsection (8)(b) of that section.
(2)
Monitor must give the Competition Commission and the National Health
Service Commissioning Board a notice specifying—
45
(a)
the changes it proposes to make, and

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(b)
its reasons for proposing to make them.
(3)
Monitor must make the changes specified in the notice unless it is given a
direction under section 109 before the end of the period of 28 days beginning
with the day on which it gave the notice.
(4)
If Monitor is given a direction under that section before the end of that period,
5
it must make such of the changes as are not specified in the direction.
109
Power to veto changes proposed under section 108
(1)
The Competition Commission may, within the period of 28 days beginning
with the day on which it is given a notice under section 108, direct Monitor—
(a)
not to make the changes specified in the notice, or
10
(b)
not to make such of those changes as may be specified in the direction.
(2)
Monitor must comply with a direction under this section.
(3)
The Secretary of State may, within that period and on the application of the
Commission, direct that the period for giving a direction under this section
(and, accordingly, the period referred to in section 108(3)) is to be extended by
15
14 days.
(4)
The Competition Commission may give a direction under this section only in
respect of such of the changes specified in the notice under section 108 as it
considers are necessary in consequence of its determination on the reference.
(5)
If the Commission gives a direction under this section, it—
20
(a)
must give notice specifying the changes proposed by Monitor, the
terms of the direction and the reasons for giving it, and
(b)
must itself make such changes to the method to which the reference
relates as it considers necessary in consequence of its determination on
the reference.
25
(6)
In exercising its function under subsection (5)(b), the Commission must have
regard to the matters to which Monitor must have regard when determining
the method to which the reference relates.
(7)
Before making changes under subsection (5)(b), the Commission must give
notice to Monitor and the National Health Service Commissioning Board
30
specifying—
(a)
the changes it proposes to make,
(b)
its reasons for proposing to make them, and
(c)
the period within which representations on the proposed changes may
be made.
35
(8)
The period specified for the purposes of subsection (7)(c) must not be less than
28 days beginning with the day on which the notice is given.
110
Local modifications of prices of designated services: agreements
(1)
In the case of a designated service, the commissioner and the provider may
agree that the price payable to the provider for the provision of the service in
40
such circumstances or areas as may be specified in the agreement is—
(a)
the price specified in the national tariff for that service as modified in
accordance with the agreement, or

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(b)
where the national tariff specifies a maximum price for that service, a
price not exceeding that maximum as modified in accordance with the
agreement.
(2)
An agreement under this section must specify the date on which the
modification is to take effect; and a date specified for that purpose may be
5
earlier than the date of the agreement (but not earlier than the date on which
the national tariff took effect).
(3)
An agreement under this section has effect only if it is approved by Monitor.
(4)
An agreement submitted for approval under subsection (3) must be supported
by such evidence as Monitor may require.
10
(5)
Monitor may approve an agreement under this section only if it is satisfied
that, without a modification to the price or maximum price specified for the
service in the national tariff, it would be uneconomic for the provider to
provide the service for the purposes of the NHS.
(6)
Where an agreement is approved under subsection (3), Monitor must send a
15
notice to such commissioning consortia, providers and other persons as it
considers appropriate.
(7)
Monitor must also publish the notice.
(8)
The notice must specify—
(a)
the modification, and
20
(b)
the date on which it takes effect.
(9)
Monitor may publish guidance on the modification of prices under this section.
(10)
In making an agreement under this section, the commissioner and provider of
a designated service must have regard to guidance under subsection (9).
(11)
In deciding whether to approve an agreement under this section, Monitor must
25
have regard to guidance under subsection (9).
111
Local modifications of prices of designated services: applications
(1)
Monitor may, on an application by a provider of a designated service who has
failed to reach an agreement under section 110 with the commissioner, decide
that the price payable to the provider for the provision of the service in such
30
circumstances or areas as Monitor may determine is to be—
(a)
the price specified in the national tariff for that service as modified in
such way as Monitor may determine, or
(b)
where the national tariff specifies a maximum price for that service, a
price not exceeding that maximum as modified in such way as Monitor
35
may determine.
(2)
An application under this section must be supported by such evidence as
Monitor may require.
(3)
Monitor may grant an application under this section only if it is satisfied that,
without a modification to the price or maximum price specified for the service
40
in the national tariff, it would be uneconomic for the provider to provide the
service for the purposes of the NHS.
(4)
Subsections (5) to (9) apply where Monitor grants an application under this
section.