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Pharmaceutical Services Negotiating Committee

Pricing Accuracy

Monitoring Accuracy

PSNC are independently auditing the CIP system. Where errors were discovered during the checking process, the individual accounts are corrected by NHS Prescription Services and the contractor concerned is notified. As processing issues are identified, PSNC raise these with NHS Prescription Services. These are fed into NHS Prescription Services' internal accuracy working group to ensure that the root cause of problems is investigated and solutions found. NHS Prescription Services’ target level for accuracy is +/- 0.2% net cash variance; however there is still significant variation in some contractor accounts, both under and over-payments.


Methodology for PSNC Pricing Checks

PSNC has been auditing the CIP system since it began in 2007. PSNC notify NHS Prescription Services of any patterns and trends of errors identified within the accounts checked in order to push for improved accuracy. There have been several revised software packages introduced by NHS Prescription Services over the years and further changes have been made during 2011 to improve accuracy in key areas.

PSNC undertakes routine pricing audits on full bundles of prescriptions each month. These prescriptions bundles are selected on a random basis with the inclusion criterion ensuring that the sample is geographically representative and includes a mix of contractor size and type and to ensure it includes bundles that are processed at different pricing divisions. PSNC audits are undertaken retrospectively and cannot be undertaken until after contractors have been notified of their payments.

PSNC pricing audit checks are currently made by examining the paper prescription bundles and include:

  • Routine full bundle checks: Accounts checked are usually selected on the basis of 21 accounts per dispensing month.
  • Switching checks: In the light of experience of inaccurate switching PSNC has been undertaking checks on 96 additional accounts in relation to switching only on a bimonthly basis.

In addition, subject to resources, PSNC undertakes full bundle checks at the request of contractors who have evidence to suggest that they have been paid incorrectly. (Updated 25 August 2011: In preparation for the transition to a new pricing audit system PSNC have for the time being suspended the service of undertaking special pricing audit checks at the request of contractors. Any pending checks linked to requests which have already been received and acknowledged by  PSNC will be completed. PSNC will continue to undertake routine checks on sample bundles each month) 

All errors that are identified are notified to NHS Prescription Services. Any adjustments that are required are made to contractors accounts. Net adjustments on individual accounts can be both credits and debits. The results are notified to the individual contractors concerned and LPCs (in the case of routine checks and switching checks).

PSNC is committed to providing pricing audit functions and is currently in the process of developing a new computer system to support this ongoing function which can check scanned prescription images and EPS Release 2 data. This new system will provide a platform allowing scope for a larger range of checks to be undertaken in the future. 

The results of PSNC routine pricing audit checks (Updated 5 September 2011)

In the period April 2009 to March 2011 inclusive an average of 17 bundles per month have been routinely checked by PSNC.

The table below shows the results of these checks including the % level of accuracy across all the routine sample checks undertaken by PSNC and the number of bundles in the sample that were priced within the +/- 0.2% net cash variance target and the number underpaid and overpaid.

It must be stressed that these are the results for the sample selected and should not be extrapolated to all contractors as there is a range of effects on individual accounts. The range of underpayment on accounts underpaid from April 2010 to March  2011 was from £1456.18 to £2.12. The range of overpayment on accounts overpaid in the same period was from £1405.87 to £7.80. 

Tables showing the results of PSNC routine pricing audit checks

 

Month

Number of bundles checked

% net cash variance across entire sample for month

Number of bundles paid to a value within target of 0.2% net cash variance.

Number of bundles underpaid to a value outside target of 0.2% net cash variance.

Number of bundles overpaid to a value outside target of 0.2% net cash variance.

April 2009

22

100%

7

7

8

May 2009

21

99.47%

2

14

5

June 2009

21

99.60%

3

12

6

July 2009

21

100.07%

7

4

10

August 2009

21

99.67%

2

14

5

September 2009

21

99.91%

8

8

5

October 2009

21

99.94%

4

9

8

November 2009

21

99.80%

5

10

6

December 2009

21

99.54%

5

14

2

January 2010

7

99.50%

2

4

1

February 2010

14

99.81%

6

6

2

March 2010

7

100.15%

1

2

4

April 2010

23

100.16%

6

6

11

May 2010

21

100.00%

5

6

10

June 2010

21

100.14%

7

5

9

July 2010

21

99.90%

4

10

7

August 2010

21

99.86%

6

10

5

September 2010

21

100.1%

10

3

8

October 2010

7

99.87%

6

1

0

November 2010

14

99.92%

7

5

2

December 2010

7

100.27%

2

2

3

January 2011

14

99.50%

5

8

1

February 2011

14

99.85%

8

4

2

 March 2011

 7

99.97 %

 April 2011

14

99.83% 

 May 2011

14

100.04% *

6

4

4

 June 2011

14 

99.51%

5

Jul-11

21

100.02%

7

7

7

Aug-11

21

100.09%

8

6

7

Sep-11

14

100.11%

8

3

3

Oct-11

7

100.28%

2

0

5

Nov-11

21

100.07%

11

5

5

Dec-11

15

100.27%

2

3

10

Jan-12

11

100.02%

3

4

4

Feb-12

27

99.92%

9

11

7

Mar-12

23

100.00%

9

6

8

     *Revised Feb 2012

The future of prescription pricing

The CIP system has been beset by problems and has led to some examples of indefensible inaccuracy in payments. Instances of gross variation only serve to create scare stories, further undermining contractors’ confidence in the system. PSNC continue to fight for improved accuracy, whilst pressing for CIP to be replaced, and stand ready and willing to work with the Department of Health to create a fairer payment system.

In a recent letter sent to all contractors in July 2011 PSNC stated:

“We have been working collaboratively with the NHS Business Services Authority (NHSBSA) to try to secure improvements to pricing accuracy since the ill-advised introduction of CIP about five years ago. There is no easy solution. By the time it became apparent that CIP was unfit for purpose staff had been made redundant by the NHSBSA and there was no going back. Our work to identify problems and ensure they are rectified, has delivered improvements. However, pricing problems persist, and we do not believe CIP can meet your needs to be accurately paid and reimbursed. The arrangement contractors are saddled with today, where they bundle up their scripts and hand them over to the NHSBSA Prescription Services for pricing, trusting them not to make mistakes, with almost no ability to verify the pricing, is indefensible. The NHSBSA Prescription Services no longer have the trust of pharmacy contractors, and PSNC is seeking fundamental change. Pharmacy computer systems today record all NHS dispensing activity. PSNC is advocating the development of a single pricing engine that each pharmacy’s computer system would use to generate a claim to the NHS, for payment for the NHS services undertaken in the pharmacy. This is quite feasible. Under the system we propose, the NHSBSA would have an important function, to audit the contractor’s claim. However, contractors would get the transparency and information they need, and to which they are entitled. We will be pressing for progress on this proposal. We will also be negotiating for a payment to acknowledge the ongoing unreliability of pricing from1 April 2009 to date. And we will continue to undertake pricing audits and work with the BSA to identify and resolve problems”. 

Contractors concerns regarding pricing accuracy

Many contractors are understandably worried about the accuracy of pricing of their monthly bundles particularly after hearing about experiences of others. PSNC has recently produced a factsheet regarding pricing accuracy which covers the following topics:

  1. Checks/actions to take while dispensing and before submitting an account for payment.
  2. Tips for reviewing account payments.
  3. How to request rechecks.
  4. Guidance on interpreting letters received from NHS Prescription Services following rechecks.

This can be downloaded here.


Reviewing Schedules of Payments

It is important for contractors to review the Schedule of Payments received from NHS Prescription Services each month, for example to ensure that payment is as expected, for example the number of items that have been priced and that information on the Schedule of Payments matches declarations made on the submission document, for example the number of MURs conducted.  Guidance on interpreting the Schedule of Payments can be found in the online Drug Tariff Resource Centre.

CIP Pricing Accuracy factsheet

Back to the Main CIP Section 


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