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.
PSNC has been in ongoing negotiations with the Government about the immense pressure pharmacies are under and the need for an urgent funding injection to the sector to ease cashflow. We are also in ongoing discussions about the need for more funding for the sector to recognise increasing costs arising from factors such as increasing prescription numbers, staffing costs, one-off costs and rising drugs bills, all resulting from the pandemic.
While the advance payments are a step in the right direction, PSNC is also seeking a long-term increase to total pharmacy funding in recognition of the unprecedented challenges that pharmacies are facing as a result of the COVID-19 pandemic. In November 2020, PSNC revealed it had rejected an initial funding offer as too limited and put a counter-proposal to DHSC, asking for the £370m in advance payments to be written off and, in April 2021, negotiations on CPCF arrangements for 2021/22 commenced with the PSNC Committee stating that it is unlikely to be able to make any final decision on the CPCF until we have clarity on COVID costs.
Details on some COVID-19 related payments for community pharmacy contractors are outlined below. You may also find our COVID-19 Frequently Asked Questions page useful.
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).
£20m on 1st July
Ministers have agreed to inject a further £20m of advance funding into community pharmacies at the end of June. This follows ongoing representations from PSNC about the cashflow problems facing many contractors as a consequence of the COVID-19 pandemic.
The total advance funding this month 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.
The latest funding injection brings the total of the advance funding payments made in recognition of COVID-19 related cashflow challenges to £370m. PSNC’s strong view is that community pharmacy contractors must not have to pay back these monies, and we will continue to press for that.
The NHS Business Services Authority (NHSBSA) is calculating payments with the intention that the extra £20 million can be paid at the same time as the 1st July payment. The latest payment comes as DHSC has also maintained the £15m uplift to reimbursement prices first seen in June.
£50m on 1st June
Minsters have agreed to inject a further £50m of advance funding into community pharmacies at the end of May.
This follows ongoing representations from PSNC about the cashflow crisis facing many community pharmacy contractors and businesses as a consequence of the COVID-19 pandemic.
The NHS Business Services Authority (NHSBSA) is working to calculate payments with the intention that the extra £50 million can be paid at the same time as the 1st June payment.
£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). These payments will need to be reconciled at a later date (i.e. they are not new money for the sector).
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.
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.
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 will not appear on the FP34 Schedule of Payment but the NHS Business Services Authority (NHSBSA) will provide 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 will not appear on the FP34 Schedule of Payment but NHSBSA will provide 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.
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) 2020/21 Part 2, 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.