Publication, Part of Proposed Dispensing Feescales for GMS contractors in England and Wales
Proposed Dispensing Feescales for GMS Contractors, England and Wales - 2021, October release
Calculation of New Feescales
The calculation follows the six-step approach set out in the methodology agreed by the negotiating parties (see Annexes A and B). All data used are for England, but it is anticipated that the new feescales will also be accepted for use in Wales.
The formula used to calculate the new feescales for the second half of 2021/22 is:
new fee = current fee x (E-Y) / Z
where
E = envelope for 2021/22
Y = anticipated spend for first six months of 2021/22
Z = anticipated spend for second six months of 2021/22 based on current feescales
This calculation and associated feescales can be found in the Calculation of October Feescales section.
A similar calculation is carried out to establish what the feescales would have been if implemented from 1 April 2021 for the whole of the financial year.
The formula used was:
new fee = current fee x (E / X)
where
E = envelope for 2021/22
X = anticipated full year spend for 2021/22 based on current feescales.
This calculation and associated feescales can be found in the Calculation of April Feescales section.
Please note calculations are performed on unrounded data but figures are rounded for presentational purposes.
Step 1
Calculate the envelope [E] for 2021/22 in line with negotiated agreement
For 2012/13 it was agreed that the envelope should be re-based to a starting figure of £170.00m.
Since 2012/13 this new methodology has been used to calculate the envelope. Future envelopes will be split (60:40) into two elements, cost and profit, and each element will be separately uplifted:
- The cost element (60%) will be uplifted each year using a two-year average of the volume increase/decrease of fees
(for 2021/22 = -0.77%)
- The profit element (40%) will continue to be uplifted by the agreed net pay uplift [1]
(for 2021/22 = 2.1%)
Calculating the envelope:
Variance between 2020/21 Envelope and 2020/21 Outturn
= 2020/21 Envelope - 2020/21 Actual outturn
= £184.85m - £189.26m
= £-4.41m (overspend)
Adjustment to be made in 2021/22 for 2020/21 overspend
= Variance x 60%
= £-4.41m x 0.6
= £-2.65m
Adjusted 2020/21 Outturn
= 2020/21 Outturn + Adjustment for 2020/21 overspend
= £189.26m + -2.65m
= £186.61m
Cost Element of 2021/22 Envelope
= (Adjusted 2020/21 Outturn x Cost Element Percentage) x Average Volume Increase in Fees 2020/21
= (£186.614 x 0.6) x 0.9923
= £111.11m
Profit Element of 2021/22 Envelope
= (Adjusted 2014/15 Outturn x Profit Element Percentage) x DDRB Uplift
= (£186.61 x 0.4) x (1.021) [1]
= £76.21m
Envelope for Year 2021/22
= Cost Element for 2021/22 + Profit Element for 2021/22 + Adjustment for 2021/22 overspend
= £111.11m + £76.21m + £-2.65m
= £184.677m
E = £184.68 million
[1]Until 2019, this was either the figure recommended by the Review Body on Doctors' and Dentists' Remuneration (DDRB), or the figure implemented in England if the recommended figures was not used.
In 2019, a five-year GP contract was agreed in England with fixed practice contract funding and the GPC England and NHS England and NHS Improvement agreed that DDRB will not make recommendations on the uplift figure for GP partner net income for the duration of the deal but that the agreed uplift figure of 2.0% would be used in 2019's calculation of the dispensing envelope.
In 2020, GPC in England and NHS England and NHS Improvement agreed that an uplift figure of 1.8% should be used; in 2021, this figure is 2.1%.
Step 2
Calculate anticipated spend for the first six months (April - September) of 2021/22 [Y] based on current feescale
Actual spend for the first six months 2020/21 = £79.63million
Adjustment for price change in October 2020 = 1.290 (i.e. the adjustment factor for 2020/21)[2]
Adjust for forecast volume increase for 2021/22 = -0.77 per cent (i.e. Average annual increase in volume of fees, see Annex A for details)
Therefore
Anticipated spend for the first six months of 2021/22
= Actual spend for first six months of 2020/21 x Adjustment factor for 2020/21
= £79.63m x 1.290
= £102.76m
=Adjusted actual spend for first six months of 2020/21 x average annual increase in fees
= £102.76m x 0.9923
= £101.968m
Y = £101.97 million
[2] For more information, see “Proposed Dispensing Feescales for GMS Contractors in England & Wales from 1 October 2020”
Step 3
Calculate anticipated spend for the second six months (October - March) of 2020/21 [Z] based on current feescale
Actual spend for the second six months 2020/21 = £109.63 million
Adjust for forecast volume increase for 2021/22 = -0.77 per cent (i.e. Average annual increase in volume of fees, see Average Annual Volume Change for details)
Therefore
Anticipated spend for the second six months of 2021/22
= Actual spend for second six months of 2021/22 x Average percentage annual increase in fees
= £109.63m x 0.9923
= £108.788m
Z = £108.79 million
Step 4
Calculate remaining envelope available for the second six months of 2021/22 [E-Y]
Proposed 2021/22 dispensing envelope (E) = £184.68m
Anticipated spend for the first six months of 2021/22 (Y)= £101.97m
Therefore
Remaining envelope available for the second six months of 2021/22
= Proposed 2021/22 dispensing envelope - Anticipated spend for first six months of 2021/22
= £184.68m - £101.97m
E-Y = £82.71 million
Step 5
Calculate the “adjustment factor”
Given that:
E = £184.68 million
Y = £101.97 million
Z = £108.79 million
Then (E – Y) / Z =
(184.68 - 101.97) / 108.79 = 0.76 i.e. the ‘adjustment factor’
The “prices per prescription in pence” for each feescale, taken from the most recently implemented Feescales last April are then multiplied by the ‘adjustment factor’ [new fee = current fee x (E-Y)/Z]. The resulting figures are shown in the “Proposed New Feescales” section of this paper, in the right-hand column of the Table 1 and 2 entitled “Prices per prescription in pence”.
Step 6
Fees are paid on a sliding scale according to the numbers of items dispensed which are placed into bands each year. Changes in the numbers of items dispensed may cause practitioners to move bands which are therefore adjusted to take account of volume changes, i.e. each band’s width is increased/decreased by the two-year average volume change.
The average annual change in volume of fees = -0.77 per cent
The top and the bottom of each of the bands in both of the feescales were changed by this average annual change in volume.
The resulting figures are shown in Tables 1 and 2 in the Proposed New Feescales section in the left-hand columns of the tables entitled “Total prescriptions calculated separately for each individual dispensing practitioner, in bands”.
Last edited: 4 October 2021 1:31 pm