1 FUNDED NURSING CARE AND CONTINUING HEALTH CARE RATES 2014/15 & 2015/16 1. Purpose To update the Board on the implementation of the agreed national methodology for
Board Paper March 10th 2015 Item 15/52 To improve health and provide excellent care Title:
FUNDED NURSING CARE AND CONTINUING HEALTH CARE RATES 2014/15 & 2015/16
Author:
Wyn Thomas-Assistant Director Community Partnership Development
Responsible Director:
Geoff Lang Director of Strategy
Summary of Key Informing board of the impact of applying the methodology, agreed Issues: by board in March 2014, to uplift Free Nursing Care (FNC) rates in 2014-15 and 2015-16. Seeking board approval to increase Continuing Health Care rates from 2015-16 in line with changes to Local Authority rates and the changes to the FNC rates. Action Required By To: (please tick all that apply) Board: Note Endorse Ratify Approve (Please provide a short summary against all that apply) Corporate Objective Finance Financial cost of £204,075 in 2014-15 and £543,728 in 2015-16 Key Impacts:
Quality Impact Assessment Standards for Health Services in Wales Equalities, Diversity & Human Rights Risk & Assurance
Disclosure: Betsi Cadwaladr University Health Board is the operational name of Betsi Cadwaladr University Local Health Board Board Coversheet v5.0 October 2014
FUNDED NURSING CARE AND CONTINUING HEALTH CARE RATES 2014/15 & 2015/16 1. Purpose To update the Board on the implementation of the agreed national methodology for inflationary increases to Free Nursing Care (FNC) rates and ask for approval to increase the Continuing Health Care (CHC) rates in line with increases to Local Authority rates from April 2015. 2. Background and Context Board members will be aware from previous consideration at the Board meeting held on 27th March 2014 of the current position in relation to the setting of the Funded Nursing Care Fee (FNC) for 2014/15. Prior to the commissioning of the Laing & Buisson Report in 2013 by the FNC Task Group – on behalf of Health Boards - the FNC rate in Wales had for several years remained at a single rate of £120.56 per client per week. This reflected the flat cash position experienced by Health Boards during this period in relation to their Welsh Government funded Financial Allocations. The fee was made up of two components - a £10.00 payment for incontinence products and a sum of £110.56 as a contribution to registered nursing costs. Taking the Laing & Buisson findings into account, in 2013 Health Boards agreed that:
A 10% uplift be applied to the continence products component of the FNC rate, raising it from £10 to £11 per person per week. This uplift has been applied as an interim measure whilst work is undertaken to explore the potential for a national procurement model. It is possible that the greater purchasing power of the NHS in Wales would lead to efficiencies in cost without any reduction in quality.
A staged uplift to the labour component of the FNC rate, raising the fee by £18.05 up to £128.61 as at the first of April 2014.
At the March 2014 Board meeting, and based upon a recommendation from Chief Executives, Board members agreed that an Inflationary Uplift Mechanism be applied to the FNC rate for five years, following which it may be necessary to undertake a further review. The mechanism linked the labour element of the FNC rate to NHS pay awards, using a mid point Band 5 level as a proxy for care home employed registered nurses. The rationale for adopting the Inflationary Uplift Mechanism (IUM) included two principal factors – it avoided the need to repeat the costly and manually intensive exercise undertaken by Laing & Buisson on an annual basis, and it also provided 1
care home providers with assurance that the rate will be adjusted in line with inflation for the coming five years. The IUM has therefore been used in considering the labour element of the 2014/15 FNC rate. 3. Current Position When the IUM was originally considered as an appropriate model to use to set the labour component of the FNC fees there was no real indication of what the IUM would produce as uplift for 2014/15. By the time the issue was considered by the Board for approval it was expected, based upon the work of the Pay Review Body, that it would produce a 1% uplift for the labour element of the FNC. However, local negotiations on pay within Wales have resulted in the WG Health Minister announcing a slightly more complicated two year pay deal. This deal is made up of two parts i.e. the first part being a £187-00 “one off” payment to A4C Banded staff (equivalent to 0.76%) and the second part being a 1% recurrent pay increase applicable from the 1st April 2015. Whilst the 2015/16 FNC rate can be adjusted easily by the application of the IUM and increasing the rate by the 1% announced by the WG Health Minister for that year, the decision to award a one off lump sum for 2014/15 makes the calculation of the IUM adjustment much more difficult. 4. Implications of the Welsh Pay Settlement on the FNC Rate Applying the IUM means that health boards will raise the labour element nonrecurrently by 0.76% (from £128.61 to £129.59 i.e. an uplift of £0.98 per week per client) from the 1st April 2014 until the 31st March 2015. For this period the new FNC rate would therefore be £140.59 including the revised incontinence fee of £11-00 per week per client. Health Boards will then need to apply a recurrent uplift of 1% on the labour element from the 1st April 2015 (in reality an additional 0.24% on the labour rate paid for 2014/15). The labour element of the rate would therefore be £129.90 from the 1st April 2015 for twelve months. Applying the IUM as above will mean an additional non-recurrent increased cost in 2014/15 of £114,116 and a recurrent cost from the 1st April 2015 of £135,928 per annum. As the Health Board’s CHC rates are based on the Local Authority rate plus the current FNC rate, there is an additional financial cost of £85,959 for CHC packages in 2014-15. The impact of the increase to the FNC and CHC rates in the current financial year have already been factored into the Health Board’s projected expenditure positions for this year.
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5. Continuing Health Care (CHC) Rates 2015-16 For the past three years the Health Board has based its CHC rates on the prevalent LA nursing home rate plus the FNC rate. Given the judicial review facing the NHS in Wales regarding FNC rates and the so called ‘gap’, it is recommended that this policy continues in 2015-16. Having refreshed their fee setting methodology, the 6 North Wales local authorities have now reviewed their fees for 2015/16 and are proposing increased rates from April 2015. (Please note that there is a common rate for 5 of the 6 County areas which takes us closer to having a standard Regional rate, Conwy CBC is the authority which has a different rate to the others.) In summary the Local Authority rates for 2015-16 and the proposed BCUHB CHC rates, (reflecting the revised FNC rate) and the financial impact is set out below; Betsi Cadwaladr University Health Board - Continuing Healthcare and FNC Rates 2015-16 FINAL Locality
BCU HB General Local Authority Nursing Rate General Nursing 2014/2015 Rate 2015/2016
FNC Rate 2015/2016
BCU HB General Nursing Rate 2015/2016
Increase in Basic Rate per Week
% Increase
Conwy Denbighshire Flintshire Gwynedd Wrexham
654.99 657.59 654.99 654.99 654.99 654.99
523.85 525.91 523.85 523.85 523.85 523.85
2015/16 Financial Implications
FNC LA Nursing Total Increase Home Fee Total Impact £ Impact £ £0.31 Increase
General Nursing Rate Anglesey
2014/15 Financial Implications of FNC Inflation Increase & Uplift in Incontinence Products
140.90 140.90 140.90 140.90 140.90 140.90
664.75 666.81 664.75 664.75 664.75 664.75
9.76 9.22 9.76 9.76 9.76 9.76
1.49% 1.40% 1.49% 1.49% 1.49% 1.49%
4,198 15,858 6,578 8,233 11,216 10,226 56,309
TOTAL
18,830 68,748 26,464 37,150 53,436 46,311 250,939
598 2,311 841 1,180 1,697 1,471 8,098
18,232 66,437 25,623 35,970 51,739 44,840 242,841
Betsi Cadwaladr University Health Board - Continuing Healthcare and FNC Rates 2015-16 FINAL Locality
BCU HB EMI Nursing Rate 2014/2015
Local Authority EMI Nursing Rate 2015/2016
FNC Rate 2015/2016
BCU HB EMI Nursing Rate 2015/2016
Increase in Basic Rate per Week
% Increase
Conwy Denbighshire Flintshire Gwynedd Wrexham
679.44 701.59 679.44 679.44 679.44 679.44
549.00 571.26 549.00 549.00 549.00 549.00
2015/16 Financial Implications
FNC LA Nursing Total Increase Home Fee Total Impact £ Impact £ £0.31 Increase
EMI Nursing Rate Anglesey
2014/15 Financial Implications of FNC Inflation Increase & Uplift in Incontinence Products
140.90 140.90 140.90 140.90 140.90 140.90
689.90 712.16 689.90 689.90 689.90 689.90
10.46 10.57 10.46 10.46 10.46 10.46
1.84% 1.79% 1.84% 1.84% 1.84% 1.84%
TOTAL
2,844 5,863 6,265 5,173 4,504 5,001 29,650
13,653 31,886 32,208 27,828 26,737 24,549 156,861
404 938 954 824 792 727 4,639
13,248 30,949 31,254 27,003 25,945 23,822 152,222
The total additional cost in 2015-16 is calculated as £407,800. 6. Recommendations The Board has already approved the use of the Inflationary Uplift Mechanism as an appropriate way to calculate the labour element of the FNC rate. No decision is therefore required by the Board at this time.
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The Board is however asked to note the application of the IUM to the FNC rate and the resulting financial implications for the Health Board, noting also that the two year nature of the NHS Wales Pay Award has led to a more complex calculation than had been expected. The Health Board is asked to confirm its continued application of the policy of setting CHC fee rates based on the applicable Local Authority rate plus the current FNC rate, and confirm the CHC rates for 2015-16 as below.
County Area
Anglesey Conwy Denbighshire Flintshire Gwynedd Wrexham
2015-16 CHC Rates BCUHB BCUHB Revised Revised EMI General CHC Rate Rate £664.75 £689.90 £666.81 £712.16 £664.75 £689.90 £664.75 £689.90 £664.75 £689.90 £664.75 £689.90
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