Funding during the pandemic

Funding during the pandemic

As part of ongoing discussions abut the impact of COVID-19 on the sector, PSNC has made representations to Government about the immense pressure pharmacies are under and the need for an urgent funding injection to the sector to ease cashflow.

_____________________________________________________________________________

Arrangements for COVID-19 related costs

The claiming window ended at 23.59 on 15th August 2021.

PSNC has accepted an offer from HM Government that will allow all community pharmacy contractors in England to claim for their COVID-related costs. The revised offer from HM Government was a significant improvement on their original proposal which was rejected by PSNC last summer.

Specific improvements made to the offer mean that:

  • HM Government has removed the restrictive upper limit on the amount of claims it will pay for, as it had originally proposed to impose a cap of £120m;
  • Contractors can now claim costs incurred from March 2020 to March 2021, i.e. a 13-month period (the original offer had to be to cover costs for just three months);
  • Contractors can now claim for a wider range of costs, including for non-staff costs which had been excluded from the original offer;
  • Contractors’ costs will now not be written off against the retail grants claimed by some pharmacies; and
  • Multiple contractors can now make a single claim per business (the original offer had sought a separate claim per branch, which would have constrained costs claims).

Under the agreed deal, contractors will receive payments for their COVID costs on 1st October, following a claiming period between 5th July and 15th August 2021.

Alongside these cost payments, HM Treasury has insisted that the sector will need to pay back the £370m Advance Payments received last year. The Department of Health and Social Care (DHSC) plans to take back repayments in six equal monthly sums, also starting from October, but we will have a further discussion on this in due course.

Further information on the agreement

Claiming process

Contractors can claim for specific categories of COVID-19 related costs incurred between 1st March 2020 and 31st March 2021 for the delivery of NHS pharmaceutical services. The Department of Health and Social Care (DHSC) has set out four categories that can be claimed for as follows:

  1. Additional staff costs due to COVID-19;
  2. Costs incurred to make premises COVID-19 secure;
  3. IT and communication costs to support remote working and virtual patient contact due to COVID-19; and
  4. Notified closures for infection control purposes (maximum 14 days).

The NHSBSA claim form asks contractors to set out their costs according to these categories and to indicate the evidence they have for them. DHSC has not set out detailed evidence requirements so this will need careful thought, particularly as contractors will also need to provide documentation to evidence their claims should the NHSBSA ask to see it. Contractors with two or more branches will be able to submit a single claim and provide documentation to evidence claims at a company level.

NHSBSA webpage and claim form for COVID-19 costs (Note: the claiming window ended at 23.59 on 15th August 2021)

Practical FAQs

Some contractors have been enquiring about some of the practicalities around making a claim. PSNC therefore wanted to provide further information on these practical questions.

Q. The claim form seems to be locked – do I need a password to be able to fill it in?
Parts of the form are password protected to ensure that data is only entered into the correct parts of the form, and that the formulas are not inadvertently deleted. Please note that the dummy example data at the top of the two claim data tabs does not need to be deleted, and (correctly) does not feed into the totals of your claim.

The ‘Category totals’ information on the ‘Covid Claim data Categories 1-3’ tab auto-populates from the information you enter in the main table. Any amounts you enter will not feed through to the ‘Category totals’ until you have also filled in the ‘Claim type’ (column B) selection for that row of data.

Q. How finely detailed should I break down my cost figures in the claim submission form?
Initial guidance on the claim form is available in PSNC Briefing 020/21: COVID-19 Costs – Background and NHSBSA claim form overview.

The form needs to be filled out at ODS code level. For Categories 1-3 (i.e. where you have needed to quantify the costs for these categories for your claim), each pharmacy should only show one cost figure for each category being claimed for. For example, if you were claiming for two pharmacies there should be a maximum of 6 rows of data in the ‘Covid Claim data categories 1-3’ tab of the form.

The briefing referenced above also details the level of information that is required in the ‘Evidence type(s)’ and ‘Expense description: mandatory for IT and communication costs, optional for other categories’. You are not expected to provide a breakdown or calculation of the costs here: if the NHS Business Services Authority (NHSBSA) selects you for Pre or Post Payment Verification (PPV), they will contact you for this information (which must then be provided within 5 working days).

Q. Do I need to attach evidence to my claim?
You do not need to attach your calculations, invoices or other evidence to your claim. If NHSBSA selects you for PPV, they will contact you for this information (which must then be provided within 5 working days).

Q. Can I add to a claim already submitted?
If you find yourself in this circumstance, please contact the NHSBSA directly for their guidance via nhsbsa.covidclaims@nhs.net

Support from PSNC

PSNC has issued a series of guides that PSNC to support contractors in making their claims. We will update the FAQs as we go through the process to reflect the common queries we receive.

PSNC Briefing 016/21: Funding for COVID-19 related costs – summary and FAQs
Briefing describing the arrangements agreed between PSNC and DHSC to reimburse community pharmacy contractors for the extra costs incurred due to the COVID-19 pandemic alongside answers to a number of questions about the process and the deal.

PSNC Briefing 020/21: COVID-19 Costs – Background and NHSBSA claim form overview
More in-depth information about the COVID-19 costs claiming process is now available in this briefing.

PSNC Briefing 021/21: COVID-19 Costs – Further guidance and claim-related FAQs
Further guidance on openings, change of ownership and permanent closures, and claim-related FAQs.

Online workshops/webinars
PSNC held two COVID-19 Cost Claims Workshops for community pharmacy contractors. During the workshops PSNC’s CEO and Director of Pharmacy Funding explained the deal reached with HM Government, described the NHSBSA claiming process, and worked through some examples.

Click here to view an on-demand version of the final webinar*

You can also click here to view the slide pack used in the webinar.

*Please note, to watch the recording, you will need to register (or input the email address you registered with previously).


Details of other COVID-related payments can be found below.

Advance payments

Note: HM Treasury has insisted that the sector will need to pay back these Advance Payments in full. DHSC plans to take back repayments in six equal monthly sums, also starting from October 2021. Further details on the repayments will be published in due course, following discussions with PSNC.

Recently opened pharmacies

Following representations from PSNC, community pharmacies that newly opened (including any changes to ownership, consolidations, mergers etc.) between 1st March 2020 and 30th June 2020 can receive advance funding to help mitigate cashflow issues due to COVID-19. Different arrangements to calculate uplift payments were needed for new pharmacies that opened between 1st March 2020 and 30th June 2020 because of the method use for calculation of the advance payments.

The Department of Health and Social Care (DHSC) has announced that, as long as these recently opened pharmacies provided NHS pharmaceutical services during these months, they will be eligible to receive a share of the total uplift of circa £370 million in advance funding given to pharmacy contractors (see historical details below).

Click here for more information, including how the uplifts will be calculated

£20m on 1st July

Ministers agreed to inject a further £20m of advance funding into community pharmacies at the end of June. This followed ongoing representations from PSNC about the cashflow problems facing many contractors as a consequence of the COVID-19 pandemic. This was paid at the same time as the 1st July payment. The total advance funding is smaller than in previous months because although contractors are still reporting additional COVID-19 related costs and cashflow problems, these are less than those which they experienced through the initial peak of the pandemic.

NHSBSA website: COVID-19 uplift to pharmacy contractors’ payment on 1 July

£50m on 1st June

Minsters agreed to inject a further £50m of advance funding into community pharmacies at the end of May. This followed ongoing representations from PSNC about the cashflow crisis facing many community pharmacy contractors and businesses as a consequence of the COVID-19 pandemic. This was paid at the same time as the 1st June payment.

NHSBSA website: COVID-19 – Uplift to pharmacy contractors’ payment on 1 June

£300m in April and May

Ministers agreed to inject a total of £300 million of advance funding into community pharmacies across April and May 2020 in recognition of the significant cashflow pressures facing the sector at this point in the COVID-19 pandemic. This was paid as ‘uplifts’ to contractors’ January 2020 and February 2020 payments in early April 2020 (worth £200m) and May 2020 (worth £100m).

NHSBSA website: COVID-19 – Uplift to pharmacy contractors’ payment on 1 April and on 1 May

Accounting for C-19 advance payments

From April to July 2020 community pharmacies received a cumulative £370m in incremental advances. These advances were loans to ease cashflow pressures while more formal data gathering and assessment of the costs of dealing with the COVID-19 pandemic were collated. The advances were not ‘new money’ for the sector and it was clearly stated that the payments would need to be reconciled at a later data subsequent to negotiations between DHSC and PSNC. PSNC is calling for the loans to be written off, based on our analysis of the impact of COVID-19 on the sector, but the negotiations are currently still ongoing and it is not known whether any of the advances will have to be repaid or how this would be done.

In the meantime, we have received questions from contractors who will need to discuss how to account for these loans at their year-end with their accountants or auditors. PSNC’s professional advisors have stated that they would expect that advances would be kept on a contractor’s balance sheet as creditors, and that in general loans are not subject to corporation tax. However PSNC cannot give formal tax advice and so if you are unsure about how you should account for the advances please seek advice from a professional.

Costs for protection of staff (e.g. PPE and physical barriers)

To support the installation of bollards, physical barriers or screens, NHSE&I made a £300 payment to all pharmacies, except distance-selling pharmacies. This funding comes from outside the global sum. The majority of contractors received this payment on 1st May 2020. Whilst it was not itemised on the FP34 Schedule of Payments, the NHS Business Services Authority (NHSBSA) sent letters to contractors confirming the payment. Any contractors who temporarily closed their pharmacy for more than two weeks since 31st March 2020 but made adjustments for social distancing prior to or shortly after the closure, were required to claim the £300 payment by 5th August 2020.

Since September 2020, contactors have been able to obtain free PPE from the Government’s PPE portal. For PPE (including hand sanitiser) purchased prior to this, contractors had until 12th Febrary 2021 to make a claim for reimbursement of their PPE costs. Further information is provided on our PPE page.

Pharmacy Quality Scheme (PQS) 2020/21

Part 1 PQS

A new Pharmacy Quality Scheme (PQS) for the first part of 2020/21 will focus on ensuring community pharmacy contractors and their teams have put in place all reasonable measures to respond to the COVID-19 pandemic, protecting both themselves and the people using their services.

The funding made available for the scheme is £18.75m and all contractors meeting the requirements were able to claim a payment of £1,630 via the NHSBSA’s Manage Your Service (MYS) portal. Claims could be made up until 23:59 on 29th January 2021.

Part 2 PQS

Part 2 of the 2020/21 PQS scheme formally commenced on 1st October 2020. Like the first part of the scheme, the second part focused on the response to and the recovery from the pandemic. The PQS was developed to incentivise quality improvement in areas that support the COVID-19 response by including criteria that improve patient safety and outcomes.

The remainder of the £75m PQS annual budget (£56.25m plus any unclaimed funding from the £18.75m attributed to PQS Part 1) was applied to this scheme. The Pharmacy Quality Scheme (PQS) Part 2 2020/21 declaration period closed on 1st March 2021 and contractors were paid on 1st April 2021, with the value of one point being £53.88.

Find out more about PQS

Medicine deliveries to shielded patients (Pandemic Delivery Service)

During national lockdown in England, pharmacies (excluding DSPs) were paid a monthly allowance to recognise the work involved in supporting the group of shielded patients to obtain their medicines safely in accordance with the changes made to the pharmacy Terms of Service. The monthly payment was aligned to the banding used for the Transition Payment, with a pharmacy dispensing the average number of prescriptions each month receiving £500 per month.

For those who chose to provide the Pandemic Delivery Advanced Service, contractors (excluding Distance Selling Pharmacies) were able to claim, via the Manage Your Service (MYS) portal, a payment of £6 (including VAT) per delivery, as part of the normal end of month process.

The service was later extended to cover people notified of the need to self-isolate by NHS Test and Trace.

Further information on the service can be found here

Opening on some Bank Holidays in 2020

Early May Bank Holiday (8th May 2020)

NHS England and NHS Improvement (NHSE&I) required community pharmacies in England to open between 2pm and 5pm on Friday 8th May 2020 (the Early May Bank Holiday). PSNC and NHSE&I agreed that contractors would be funded at a rate of £250 per hour for a maximum of three hours. Contractors needed to submit their claim for the £250 per hour payment using the Manage Your Service (MYS) portal between the 25th May 2020 and 22nd June 2020, with payment due on 1st July. This payment did not appear on the FP34 Schedule of Payment but the NHS Business Services Authority (NHSBSA) provided confirmation of payment via individual contractor letters.

Good Friday (10th April 2020) and Easter Monday (13th April 2020)

NHSE&I required community pharmacies in England to open between 2pm and 5pm on the two Easter Bank Holidays, Good Friday (10th April 2020) and Easter Monday (13th April 2020). PSNC and NHSE&I agreed that contractors would be funded for these openings at a rate of £250 per hour. Contractors were required to submit their claim for the £250 per hour payment using the MYS portal between the 17th April and 5th May 2020, with payment due on 1st June. This payment did not appear on the FP34 Schedule of Payment but the NHSBSA provided confirmation of payment via individual contractor letters.

£15m increase in reimbursement prices

DHSC increased medicine reimbursement prices by £15 million from June 2020. The increase was being made based on margin data from 2019/20 along with predictions for delivery in 2020/21. PSNC has repeatedly highlighted the significant cashflow problems facing community pharmacy contractors during the pandemic.

PSNC pushed DHSC to retain the £15 million uplift for the Category M in January and April 2021. PSNC and DHSC will continue to monitor carefully medicine margin data in order to identify if, and when, further increases are required.

Category M prices can be found here

Death in service benefits for frontline healthcare workers

DHSC has announced a new life assurance scheme for healthcare workers on the frontline in England.

In recognition of the increased risk that healthcare staff are facing during the pandemic, the scheme will make a payment of £60,000 to the estate of eligible individuals who die from COVID-19 contracted during their frontline essential work.

Information about the scheme states it will remain open until the relevant NHS workforce provisions of the Coronavirus Act 2020 expire and that deaths which occurred before the announcement of the scheme will be considered. It has also been confirmed that the scheme is non-contributory, which means there is no cost to staff or employers. Separate guidance for employers has been published which outlines their particular responsibilities regarding the scheme, such as making employees aware of it.

The Secretary of State’s letter of 7th May 2020 to the Royal Pharmaceutical Society (RPS) details that is is the Secretary of State’s intention to exercise his discretion to include relevant members of the pharmacy workforce that meet the scheme’s eligibility critiera. The letter should be referenced in any claim. In order to make a payment, the Secretary of State must be satisfied that on the basis of evidence the individual was exposed to a high risk of contracting coronavirus in circumstances where they could not reasonably avoid that risk by the nature and location of the work they carried out.

Full scheme details for both claimants and employers can be found on the NHS Business Services Authority (NHSBSA) website.

How and when payments will be made

A number of new COVID-19 related payments for community pharmacy contractors have been announced during the pandemic.

PSNC has created a payment timetable and deadline tracker to assist community pharmacy contractors with checking and claiming payments for services including the Pharmacy Quality Scheme (PQS), Pandemic Delivery Service, GP Community Pharmacist Consultation Service (CPCS), Discharge Medicines Service,  COVID-19 vaccinations and Hepatitis C testing service.

The guide, which will be regularly updated, summarises how and when the different payments will be made.

View our Payment timetable and deadline tracker webpage


Return to the main COVID-19 hub page.



Latest Healthcare Landscape news

View more Healthcare Landscape news >