orthodontics - PDF

					Gateway Reference 5917

IMPLEMENTING LOCAL COMMISSIONING FOR PRIMARY CARE DENTISTRY Factsheet 11 – Orthodontic new PDS agreements and new GDS contracts
1 1.1 INTRODUCTION This factsheet provides additional advice in response to questions raised by PCTs about dentists providing orthodontic services who transfer to a new PDS agreement or new GDS contract in April 2006. It complements Factsheet 3 - Making New PDS Agreements for Specialist Services (Gateway Reference 5917). Guidance describing a number of typical scenarios and suggesting possible ways of proceeding in each case are included in the accompanying appendix. KEY PRINCIPLES This advice is underpinned by the following key principles: • • Patients receiving NHS treatment prior to April 2006 must have their treatment satisfactorily completed. Where cases in active treatment are transferred from the GDS to nPDS/nGDS, the orthodontist will be regarded as having already completed an average of 70% (by value) of the work associated with these cases and will receive a one-off GDS fee for this work. It is assumed that the remaining 30% will be carried out after 1 April 2006 and will therefore be reimbursed via payments received under the nPDS/nGDS arrangements. Where cases in retention are transferred from the GDS to nPDS/nGDS the orthodontist will usually have received 100% of the GDS fee for the retainers and will receive 50% (by value) of the work associated with supervision of retention as a one-off GDS fee for this work. The remaining 50% will (it is assumed) be carried out and included in the payments received under the nPDS/nGDS arrangements. Cases examined prior to April 2006 where treatment has not commenced will be eligible for payment of 100% of the appropriate current GDS fees for Diagnosis as a one-off GDS payment. Where these cases meet the appropriate IOTN criteria they will be eligible for submission as a case start (but not a case assessment) on or after 1st April 2006. Where dentists enter into a new agreement for the continued provision of NHS orthodontic services from April 2006, they are entitled to an annual Calculated Annual Contract Value (CACV) (paid in monthly instalments) for the three-year income guarantee period - provided agreed activity levels are met.

2 2.1

•

•

•

•

A dentist’s CACV is based on the gross GDS payments s/he has received for the 12-month reference period - 1st October 2004 to 30th September 2005. Where a dentist’s activity has been growing and the CACV does not fully reflect the current work in hand, the NHS should, as a matter of principle, seek to fund the completion of all current cases. This does not necessarily mean committing to the same level of future activity, which is a matter for local decision based on needs assessment.

•

3 3.1

PAYMENT ARRANGEMENTS Under current GDS arrangements, orthodontists are paid fees for orthodontic courses of treatment after the treatment is completed. It is possible for the orthodontist to claim an interim payment when the appliance is fitted. Because most of the payment is made after completion of treatment, there are delays between the work being done and final remuneration. Payment arrangements for new GDS contracts and new PDS agreements are different from those for current GDS. Under nPDS/nGDS the total annual sum due to each dentist is paid in twelve monthly instalments one month in arrears. Payment is for completed courses of treatment. As cases are completed, new cases are started to maintain the agreed case-load. The number to be started is determined by the number of units of orthodontic activity in the nPDS/nGDS agreement.

3.2

3.3

There is no payment for completing cases, just monthly payments for continuing treatment. Units of Orthodontic Activity (UOAs) are awarded when the orthodontist performs an orthodontic assessment (one UOA) and when he or she commences a course of treatment (22 UOAs for patients aged 18 years or above, 20 UOAs for patients aged 10-17 years and 3 UOAs for patients under 10 years of age.). The NHS Business Services Authority (BSA) has to be informed when a case is assessed, started, completed or discontinued to enable the PCT to monitor the agreement.

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CLOSING EXISTING GDS CONTRACTS AND TRANSFERRING TO NEW GDS/ NEW PDS In the case where an orthodontist is moving from GDS to nPDS/nGDS on 1 April, it is important to note that there will be: work already carried out (but not yet paid for) as part of courses of treatment that have not yet been completed work still to be carried out on courses of treatment begun before 1st April.

4.1 • •

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4.2

To avoid the burden of assessing the exact proportion between these two categories in each individual case, the transitional arrangements assume that, for cases not yet completed, 70% on average of the work (by value) has already been completed in the GDS. For cases in active treatment, the orthodontist will therefore receive the current GDS fee for appliances previously approved by the Practice Board (less any interim payments already made) as a payment from the BSA, provided an appliance has been fitted. sometimes referred to as the GDS ‘close-down’ value. 70% of Dental one-off This is

4.3

4.4

For cases in supervised retention (SDR item codes 3231, 3232) transferred from the GDS to the nPDS/nGDS, the orthodontist will have received 100% of the current GDS fee for the retainers and will receive 50% of the current GDS fee for supervision of retention for a period of up to 12 months as a one-off payment from the BSA. These ‘close-down’ payments are attributable to the national GDS budget for 2005/06 and not to PCTs’ devolved budgets for 2006-07. PCTs do not therefore have to factor these payments into their new contract agreements with orthodontists, or into their budgeted expenditure for 2006/07. In each case, the remaining work will be done after 1 April 2006 and will be part of the treatment provided under the nGDS/nPDS agreement and therefore remunerated through the monthly contract payments. Cases examined and submitted prior to April 2006 as a full case assessment (code 0121) where treatment has not commenced will be eligible for payment of 100% of the appropriate GDS fees for Diagnosis as a one-off payment from the BSA. These cases will not be eligible for the 70% fee for appliances. Where these cases have received GDS prior approval, or meet the appropriate IOTN criteria, they will be eligible for submission as a case start on or after 1st April 2006. They will not however be eligible for submission as a case assessment. Cases examined prior to April 2006 but then put on review are eligible for a case assessment UOA when they are reviewed after a reasonable timeframe. The practitioner will also receive a payment of 100% of the fee due for providing treatment and supervising retention on referral up to and including 31 March 2006 (SDR Item code 4601). Dentists will need to submit payment claims to the BSA for incomplete GDS treatment, diagnosis and/or treatment on referral by 30 September 2006. Claims will not be accepted after this date.

4.5

4.6

4.7

4.8

4.9

4.10

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4.11

These arrangements apply only where cases are being transferred from GDS to a nPDS agreement or nGDS contract. They do not apply where a dentist does not enter into a nPDS/nGDS arrangement, nor where dentists are providing orthodontic services prior to April 2006 as part of a pilot PDS arrangement. Dentists closing down NHS work and not transferring to nGDS/nPDS will submit GDS forms in the usual way for the BSA to assess an amount due for the work actually done. PCTs will need to make alternative arrangements for the completion of treatment for these patients.

4.12

TRANSITIONAL ISSUES AND CONTRACT VALUE ADJUSTMENTS
5 5.1 STABLE ORTHODONTIC PRACTICES Orthodontic advice suggests that, as a broad rule of thumb, a full-time NHS specialist practitioner (without assistants) would expect to be dealing with around 400 cases at any one time. Assuming that a case lasts on average 18 months, this would equate to around 266 case starts per year. The ratio of case starts to case assessments varies between localities depending on referral patterns. Assuming a ratio of two case assessments to one case start, 266 case starts would require around 532 case assessments per annum. A higher ratio would obviously require a higher number of case assessments and fewer case starts. The calculated annual contract value (CACV) accounts for income over a 12-month period. Based on the same assumption that the average case takes 18 months to complete a stable orthodontic practice will therefore have a total GDS value of approximately 1.5 times the CACV. When the cases in treatment/retention are submitted for a close down payment, the contractor will receive 70% of the appliance fees for cases in treatment and 50% of the fees for supervision of retention. In a steady-state practice, the remaining 30% of the total value of the cases in treatment and 50% of the value of the cases in retention will be included in the recurring contract value. In other words, this forms part of the monthly instalments that the contractor receives for providing continuing care as the cases are completed/discharged. Therefore the PCT should not make any addition to the contract value from April 2006 to reflect these incomplete courses of treatment.

5.2

5.3

5.4

6 6.1

GROWING ORTHODONTIC PRACTICES Where a dentist’s activity has been growing, the calculated annual contract value (CACV) based on payments made between 1 October 2004 and 30 September 2005 may not fully reflect the current work in hand at the practice. In these circumstances there is likely to be a greater number of

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cases under treatment than is reflected in the calculated contract value and therefore the total GDS value of these cases will be greater than 1.5 times the CACV. If the CACV is inadequate to complete cases transferring from the GDS, the contractor may take the matter to dispute resolution 6.2 As a matter of principle, the NHS should seek to fund the completion of orthodontic cases in these circumstances. This is considered further as scenario 2 (Appendix - page 7) setting out examples of how the CACV is used to fund the “missing 30%” over the three-year income guarantee period

6.3

The contractor will receive GDS close-down payments for these additional cases in the way described in paragraph 5.3 above. The total actual value of the incomplete cases will be known once all the payment claims for incomplete treatment have been submitted to the BSA. A commitment to adjust the contract value (so that it properly reflects the funding needed to complete cases), once this full and final figure is known, should be included in the agreement.

6.4

PCTs will need to form a local view on whether to reduce, maintain or increase the level of orthodontic activity commissioned from dentists (and hence the corresponding contract value) in line with affordability and the local population’s needs.

7 7.1

SECONDARY CARE SERVICES Where PCTs are considering reconfiguring services, for instance by transferring services from secondary care to a primary care setting, PCTs will need to take care to ensure that the funding being devolved for commissioning of primary care dentistry is not used to cross-subsidise services previously funded from unified budgets.

8 8.1

EXISTING PILOT PDS ARRANGEMENTS Where dentists are providing orthodontic services in pilot PDS arrangements prior to April 2006, GDS close down payments will not be applicable. PCTs should continue to commission orthodontic services in the form of UOAs in line with the new contracting terms.

8.2

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APPENDIX Scenarios
This section sets out some scenarios that PCTs may experience in discussions with dentists regarding contract arrangements from April 2006.

1.

Stable orthodontic practice

In this example a full time NHS specialist orthodontist has a calculated annual contract value (CACV) of £300,000 (excluding additional payments). On 31st March 2006 he/she is likely to have cases under active treatment with a total value of £450,000. When submitted for closedown the contractor will receive 70% of the appliance fees for cases in treatment and 50% of the fees for supervision of retention in relation to claims submitted up to September 30 2006. In this example the contractor receives approximately £315,000 as the closedown figure. This leaves £135,000 of the total value of the cases outstanding. However, this is included in the monthly payments under the new arrangements as the cases are completed/discharged. The PCT should not therefore factor this figure into the CACV value from April 2006. The contractor will be required to deliver 5,454 UOA (£300,000 ÷ 55) each year. In this example the PCT and dentist agree that based on local circumstances the UOAs will be delivered with 496 case assessments and 248 case starts (Ratio 2:1). This will represent a reduction in the number of case starts compared to the GDS reference period. This is because the value of £55 was calculated to recognise the increased complexity of caseload associated with targeting treatment to the higher IOTN categories whilst also covering completion of cases in treatment up to 1.5 times CACV. Therefore the PCT need not make any extra payments to stable orthodontic practices unless more activity is required and agreed by both parties.

2.

Recently established/rapidly growing practices

The GDS closedown arrangements are based on the assumption that the average orthodontic case takes 18 months to complete. Therefore for steady state practices the total value of the cases in treatment will be approximately 1.5 times the CACV. With rapidly growing practices the total value of cases in treatment will exceed 1.5 times the CACV. 6

Therefore although the CACV will cover completion of all cases started prior to April 2006 up to the value of 1.5 times the CACV, an adjustment will need to be made to pay for the completion of cases started over and above this amount. The final figure for the total value of cases in treatment/retention may not be known until 30th September 2006 (the date by which all of the cases eligible for the closedown payments must have been submitted to the BSA by the contractor). In the meantime it would be necessary for the contractor to provide firm evidence to the PCT that the total GDS value of cases in treatment significantly exceeds 1.5 times the CACV. If the PCT seeks to maintain the recently increased levels of activity it is suggested that any revised recurring annual contract value should not exceed 2/3 of the total GDS value of the cases currently in treatment. PCTs should be aware that calculations based on multiplying the number of cases currently in treatment by £55 x 21 (UOA) would greatly overestimate the true value of the cases in treatment. A far more accurate indicator would be for the contractor to provide evidence of GDS fees previously approved by the Dental Practice Board (DPB) for all of the cases in treatment. Orthodontic advice suggests that this could be provided within a matter of weeks where practices enter the new contract in dispute. Below are some examples of the different scenarios PCTs are likely to encounter:

2.i. Recently established/ growing practice with an insufficient CACV value.
A specialist practice has been growing rapidly over the past two years. It has a calculated annual contract value (CACV) of £200,000 (excluding additional payments). However because orthodontic treatment is paid largely in arrears this does not reflect the true value of the treatment in progress. The contractor provides evidence that cases in active treatment/retention have a GDS value of £450,000. The closedown payments received from the BSA eventually support the contractor’s evidence. In this situation there are two basic scenarios: Scenario 1 The PCT wishes to maintain the increased level of service and therefore needs to increase the CACV. The annual contract value could be increased to 2/3 of the total value of the cases in treatment (£450,000). In this instance the contract value would increase by £100,000 per annum to £300,000. This would automatically cover the “missing

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30%” for the extra cases started in the reference period. The contractor would also be required to deliver 5,454 UOA (£300,000 ÷ 55)

Scenario 2 The PCT does not wish to commission services beyond the CACV value. The contractor is entitled to the CACV of £200,000 per annum for three years The £200,000 CACV should broadly cover completion of cases started to the value of £300,000. A simple formula to assist PCTs adjust activity commissioned within the CACV value from April 2006 until such time as the dispute is resolved is set out below. It should be noted that this formula does not take into account the cost of providing retainers or supervising retention for patients not covered by the CACV payments. These amounts can be calculated definitively once the total number and value of GDS cases in treatment is confirmed by the BSA.. Amount outstanding = [(Total value of cases in treatment and retention) – (1.5 x CACV)] x 30% = £450,000 – (1.5 x £200,000) x 30% = £150,000 x 30% = £45,000 Option 1: The £45,000 shortfall could be paid on a non-recurring basis added to the CACV over the first two years. In this example the CACV would be £222,500 for two years but only £200,000 worth of UOAs would need to be delivered. Year 1 = 3636 UOA (£222,500 - £22,500) ÷ 55 at 06/07 prices Year 2 = 3636 UOA (£222,500 - £22,500) ÷ 55 at 07/08 prices Year 3 = 3636 UOA (£200,000) ÷ 55 at 08/09 prices Agreement regarding activity levels required in Year 4 would need to be reached as early as possible – ideally in Year 1.

Option 2: The £45,000 shortfall could be accounted for by reducing the number of UOAs required for the £200,000 CACV during the three-year income guarantee period. For example with the deduction of £45,000 worth of units in year 1, the following units would need to be delivered: Year 1 = 2818 UOAs (£200,000 -£45,000) ÷ 55 at 06/07 prices Year 2 = 3636 UOA (£200,000) ÷ 55 at 07/08 prices Year 3 = 3636 UOA (£200,000) ÷ 55 at 08/09 prices

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Agreement regarding activity levels required in Year 4 would need to be reached as early as possible – ideally in Year 1.

2.ii

The recently established practice with little or no contract value

A practice has opened within the past 18 months, has a CACV of £50,000 but has cases in treatment that are worth £250,000. The PCT does not wish to commission the service beyond the CACV value. The contractor will not receive the 70% closedown payments unless agreement can be reached for the cases under treatment to be completed. The contractor will receive approximately £175,000 as close down payments from the BSA provided agreement is reached regarding the completion of the cases. This leaves £75,000 outstanding. The contractor is entitled to the CACV of £50,000 per annum for three-years.

Scenario 1: The contractor and PCT agree a contract for £50,000 per annum for three years. The CACV value would cover the £75,000 shortfall over an 18-month period. Therefore during this time, no new case assessments or case starts (UOAs) would be expected. In the second half of Year 2 £25,000 worth of UOAs will need to be delivered with £50,000 worth of UOAs required in Year 3. Agreement regarding levels of activity required from Year 4 onwards would need to be reached as early as possible – ideally in Year 1.

Scenario 2: The contractor does not enter into a local contract agreement and ceases to provide NHS orthodontic services from April 2006. The contractor will need to submit claim forms to the DPB/BSA but will only receive payments for the work done on each individual case up to a maximum of 66%. The PCT will therefore need to find alternative providers to complete the cases. All cases would accrue 21 UOA for the recipient provider and local waiting times for treatment would almost certainly increase

3. The low volume GDP provider that orthodontics to new patients from April 2006

ceases

to

provide

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A dentist has a CACV of £100,000 of which £10,000 is for orthodontic treatment. Agreement is reached that the contractor will cease to provide NHS orthodontic services to new patients from April 2006. Where the practitioner enters into an nGDS contract, the practitioner will receive 70% of the fee for cases in treatment from the DPB/BSA as part of the closedown arrangements. The total value of the practitioner’s workload is likely to be £15,000 (1.5 x orthodontic CACV). As part of the close down arrangements the contractor will receive £10,500 (70% of £15,000) from the DPB/BSA for cases in treatment provided agreement is reached to complete the cases. This leaves a shortfall of £4,500 for completion of the cases. Solution: Eventually all of the contractor’s orthodontic CACV (£10,000) will need to be converted into UDAs. However to take account of the fact that £4,500 is required to cover completion of the orthodontic cases in progress the PCT should not convert a total of £4,500 into UDAs over an agreed period during the first three years. Option 1. Year 1 convert just £5,500 of the orthodontic CACV into UDAs. Year 2 onwards convert all £10,000 into UDAs. Option 2 Years 1 and 2 convert just £7,750 into UDAs. Year 3 onwards convert all £10,000 into UDAs. It must be emphasised that none of the orthodontic activity will generate (or be expected to generate) UOAs. Should the practitioner leave the NHS altogether then a contract could be agreed for completion of orthodontic cases only. In this instance £1,500 per annum for three years may deemed to be appropriate.

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