Contractor Update: One-off 12ppi increase to December 1st advance payments confirmed

Contractor Update: One-off 12ppi increase to December 1st advance payments confirmed

November 22, 2017

Community pharmacy contractors will receive an increase in their December 1st advance payments (made for services provided in October) of 12p per prescription item (ppi), the Department of Health (DH) has confirmed.

This is a one-off increase, which will be implemented in the same way as the one-off 15ppi increase that was given for advance payments last month.

PSNC has continued to press for urgent intervention to offer some relief for contractors, and this latest measure has been taken in recognition of the continuing extraordinary cashflow challenges being faced by contractors.

The increase has once again been confirmed for one month only, and full and final payment for services provided in October will be reconciled as usual at the end of December.

This means that contractors will not receive any additional funding overall; this is a measure designed to help smooth cashflow.

Contractors should note that last month’s increase of 15ppi will be recovered as full and final payment for services provided in September are reconciled as usual at the end of November.

PSNC Chief Executive Sue Sharpe reiterated:

“We are grateful for this continued positive response aimed at providing some relief to contractors. We remain concerned though that there will be pharmacies for which this is not enough; and the measures will of course not address underlying funding and sustainability issues. Recent statements by the minister and this decision to increase December advance payments give us hope that we will be able to restore the constructive relationships that underpinned our work before 2015.”

Frequently Asked Questions

Q. Why has this measure been taken?
A. PSNC had been seeking urgent assistance for contractors from DH and the pharmacy minister recognising the cashflow problems they are facing caused by the combination of:

Q. How will the increased advanced payment be displayed on my Schedule of Payments?
A. A new field titled ‘Additional Advance Payment’ appeared as follows to accommodate the increased advance first made last month.

Q. How will it help?
A. The aim of the increase to the December 1st advance payment (paid for declared items for October) is to smooth out contractors’ cashflow. PSNC remains concerned that for some contractors the measure will be too little, and perhaps too late, and that some businesses will still struggle to manage the cashflow impact of recent market movements over the next few months.

Q. Will the cashflow issues continue long term?
A. The funding cuts imposed by the Government will undoubtedly mean that contractors will face ongoing pressure on their finances. We do not know whether further funding cuts are planned beyond the 2017/18 financial year. The reduction in reimbursement prices made from August had a more significant impact than expected because of the increase in generic prices that followed shortly afterwards. The DH intends that reimbursement prices should catch up as they in the main reflect the market, but until this happens the cashflow issues will remain severe.

Q. Will the increase in advance payments apply beyond November?
A. The adjustment has again been confirmed for one month only.

Q. What else is PSNC doing about the cashflow issues facing contractors?
A. PSNC is continuing to press the DH for improvements to the systems used to measure and deliver margin to ensure fair access to funding for all contractors and to smooth delivery where possible. PSNC would also like to see the NHS making accurate payments to contractors at the end of each month, removing the need for the advance payments system. PSNC is continuing to lobby Parliamentarians and the NHS, highlighting the value of community pharmacies, the current cashflow issues, and the risks for patients if any reduction in pharmacy services is seen.



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