COVID-19 Cost Claims: DHSC sets out arrangements for payment

The arrangements for payment of contractors’ COVID-19 cost claims in October have now been finalised by the Department of Health and Social Care (DHSC) and NHS Business Services Authority (NHSBSA).

PSNC is pleased to confirm that all contractors that made a claim during the summer claiming window, even those identified by NHSBSA as needing pre-payment verification, will receive a payment at the start of October.

The vast majority of contractors who made claims (95% of them) will receive a payment for the full value of their claim in October, although these are still subject to post-payment verification.

As we previously announced, the overwhelming majority of contractors (more than 9,900) submitted a claim for their COVID-19 related costs over the summer. These claims amounted to more than double the £120 million offered initially to the sector by HM Government and rejected by PSNC as insufficient.

NHSBSA has been processing contractors’ claims in line with the Drug Tariff which outlined the categories according to which contractors could claim and clearly stated that claims would be subject to pre and post-payment verification.

Those requiring pre-payment verification

NHSBSA has identified a small number of contractors whose claims appear to be outliers and require verification before receiving payment of their claim, including:

• Claims exceeding one third of annual NHS income in 2020/21 for contractors who opened after March 2019 or an average of 2019/20 and 2020/21 income for contractors who opened before March 2019;
• Claims where initial review identifies a risk of a potential error that could result in a significant overpayment e.g. where claims are likely to fall outside the categories for which contractors were eligible to claim for.

These contractors requiring verification before full payment will be contacted directly by NHSBSA about the issues affecting their claim. While their claims are being processed, they will be paid a sum of money in October in line with their additional advance repayments i.e. one sixth of the additional advance payments they received. If their claim is still outstanding in another month because the NHSBSA has been unable to verify the claim, then they will once again be paid in November in line with their additional advance repayments (i.e. another sixth of their additional advances) unless the claim is outstanding because the evidence requested by the NHSBSA has not been provided or does not support the claim submitted. At the end of this process, the balance between the verified claim amount and these interim payments will be paid / recovered as appropriate.

An amendment will be made to the Drug Tariff to reflect these arrangements, and all contractors receiving partial payments in October can expect to receive an individual letter from NHSBSA.

The NHSBSA will also conduct post-payment verification on claims. If requested by the NHSBSA, contractors must submit the evidence supporting their claim within 5 working days.

PSNC will continue to engage with DHSC on the claims processes including those that underpin appeals, should any be necessary.

PSNC Chief Executive Simon Dukes said: 

“PSNC is pleased that the total amount claimed by contractors for their COVID-19 related costs significantly exceeds the £120m we were originally offered to cover those costs. This, in my books, makes our decision to stand firm, and then to fight very publicly for what we believed contractors were owed, more than worthwhile.   

We have been clear that all contractors must receive a payment in October as last year’s additional advance payments start to be repaid. So, it is very good news that some 95% of contractors will receive the full value of their claims in October.  

For the very small number of contractors whose claims need to be verified first, the payment of one sixth of the value of their additional advance payments balances the immediate need to support cashflow at this time with the risks of significant cashflow disruption should large claims need be reduced after verification.”