Betsi Cadwaladr University Health Board
Board Paper 27.03.14
Item 14/060
Subject:
Free Nursing Care (FNC) and Continuing Health Care (CHC)
Fee Rates 2014/15
Summary
or
Issues of
Significance
The purpose of this report is to set out recommendations for the Health
Board’s Free Nursing Care (FNC) and Continuing Health Care (CHC)
fee rates as of 1st April 2014.
Strategic Theme /
Priority / Values
addressed by this
paper
Making it safe / better / sound / work / happen?
.
Legislation or
Standard 1 Governance and Accountability framework in respect of
Healthcare Standard: having a robust process for the setting of FNC and CHC rates
Evidence base or
other relevant
information to
inform decision (e.g.
risks)
Laing & Buisson review of FNC costs 2013/14.
North Wales Local Authorities Fee setting methodology
Consultation
with others:
N/A
Equality Impact
Assessment
(EqIA)
The Board and its Committees may reject papers/proposals
that do not appear to satisfy the equality duty. See
http://howis.wales.nhs.uk/sitesplus/861/page/47193
1.Has EqIA screening been undertaken? N
(If yes, please supply a copy)
2.Has a full EqIA been undertaken? N
(If yes, please supply a copy)
3.Please state how this paper supports the Strategic Equality Plan
Objectives:
http://howis.wales.nhs.uk/sitesplus/documents/861/sep_0412_e.pdf
N/A
4.Please include a justification if no EqIA has been carried out:
EqIA undertaken as part of national review of FNC rates and
provided to Board meeting September 2013.
Recommendations:
1. To note the national process that took place to revise FNC rates
in 2013/14.
2. To agree the principal of uplifts to FNC rates from 1st April 2014
to be linked to national increases in band 5 Agenda for Change
rates.
3. To note the increase fees set by the Local Authorities in North
Wales from April 2014
4. To agree that revised CHC rates for 20014/15 should continue to
be based on the Local Authority rates plus the revised FNC rate
for the period from April 2014 subject to recommendation 2
above.
Author(s)
Mr Wyn Thomas
Presented by
Mr Geoff Lang
Date of report
17th
Date of meeting
27th March 2014
March 2014
Proposed Free Nursing Care and Continuing Health Care Fees 2014-15
Board Paper 27.3.14
Situation
This paper makes proposals for the principles around setting of revised Funded
Nursing Care (FNC) fees and the associated impact on Continuing Health Care
(CHC) fees payable from April 2014 and the estimated financial impact of agreed
changes.
The proposals do not apply to care packages arranged by the Regional
Commissioning Hub for high cost placements or packages that are covered by the all
Wales framework for independent hospitals.
Background
Free Nursing Care (FNC)
FNC refers to the NHS financial contribution towards the costs of those people
assessed as requiring nursing care by a registered nurse within a care home.
BCUHB, along with other health boards throughout Wales, have a statutory
responsibility to fund the Registered Nursing Care Component (NAFW 25/2004 NHS
Funded Care in Wales) of those individuals placed in residential and nursing home
care. This rate is currently £129.59 per week.
Initially funded via Welsh Government (WG), FNC was devolved to Local Health
Boards (Health Boards) via a formal Directions Order in 2004. Consideration of
uplifts has subsequently been undertaken annually on an All Wales basis, with
health boards seeking to ensure a consistent response across Wales. Reflecting the
overall WG resource allocation, no uplift was provided in 2011/12 and 2012/13. A
number of papers produced have outlined the risks to health boards following
several judicial review cases in Wales, of the requirement that health boards must
have and be able to demonstrate that proper processes are in place to consider the
financial issues for providers of care and make informed decisions regarding funding
and the rates payable.
All Wales Chief Executives commissioned a review of FNC rates in March 2012, to
be completed by the end of September 2012. The findings were reported back to
CEOs and concluded that it was not possible to provide assurance that the then
current process was robust and appropriate, and advised that further work be
undertaken to develop and demonstrate an appropriate methodology. At the
October 2012 meeting, Chief Executives agreed to fund an independent analysis via
an extended sample mapping process, which reported back to CEOs in July 2013.
‘Laing and Buisson’ were commissioned to undertake work to ascertain the ‘typical’
levels of registered nurse care currently provided to residents of care homes in
Wales. Having completed their work they estimated the cost of FNC nursing care per
resident, based on the definitions and interpretation used, amounted to £140.49 per
week, made up of £128.61 direct salary costs and £11.88 for continence
products. This compared with the then FNC payment of £120.55 per week,
1
comprising £110.55 for nursing care and an allowance of £10 per week for the cost
of continence products per resident.
The All Wales CEOs recommended that the element of the fee for incontinence
products, calculated as £11.88, should not be included in the new fee proposal but
addressed by further work to see how the NHS could source and provide these
directly and more economically. The rationale being that a central procurement
process could potentially save up to £4.86 per resident per week. The current
allowance of £10 per resident per week has therefore been maintained until a
national procurement system is operational.
In addition all Wales CEOs proposed, and the Health Board subsequently agreed in
September 2013, that the implementation of the new rate be staged, with 50% of the
increase paid in the current financial year and the full rate being paid from April
2014. In 2013-14 therefore it has meant a FNC rate of £129.59 per week (£119 59
direct nursing salary costs plus £10 for the provision of continence products).
While the new rates have been implemented, the solicitor acting on behalf of Care
Forum Wales and some providers in Wales has raised a number of concerns about
the process and implementation, which are being worked through collectively by the
Welsh health boards. The main concerns relate to the lack of an inflationary uplift
from April 2012, the part implementation of the revised rate in 2013/14, the exclusion
of non-nursing care costs identified by Laing and Buisson and arrangements for
inflationary uplifts from April 2014. Until all these matters are resolved or concluded
health boards maybe at risk of legal challenge. To this end all health boards have
instructed Morgan Cole, Solicitors, to act on their behalf collectively in this matter.
Continuing Health Care (CHC)
BCUHB, along with other Health Boards in Wales, regularly place individuals with
complex healthcare needs in care home settings and fully fund their care when they
are assessed as meeting the criteria set out in the CHC Framework (2010).
At the beginning of financial year 2011-12, BCUHB agreed a 1% increase to its fee
rates for care from 1st April 2011. Despite this, in some areas, due to the variation in
fee rates and inflationary uplifts provided by individual Local Authorities, there were
cases when CHC funding was less than care home owners received for the
combination of Funded Nursing Care (FNC) and the means tested element from
local authorities. Due to the complexity and intensity of patients with a primary
health care need (i.e. those who meet the CHC criteria); it was considered
unreasonable for BCUHB to fund less than applicable to FNC patients.
Consideration had also to be given to the principles of fairness and equity in relation
to fee rates.
Due to the variations in fees, the fact that in some areas CHC rates were below
those paid by local authorities and in response to challenges by Independent
Providers and Care Forum Wales, the Health Board agreed to review its rates in
2011. The need to review the situation was also given impetus following the outcome
of the Pembrokeshire Judgement, which saw Pembrokeshire Local Authority
successfully being taken to Judicial review on their fee levels (December 2010) by 3
local care home providers.
2
The review of fees took account of the framework of legislation and guidance. This
included:
The National Assistance Act 1948; the National Health Service and Community
Care Act 1990 and other relevant primary and secondary legislation.

The Welsh Assembly Government Commissioning Framework and Guidance
(August 2010).

The Judgement of Mr Justice Hickinbottom in the recent case of Forest Care
Home -v- Pembrokeshire County Council (December 2010.
A number of scenarios were modelled and in October 2011 it was agreed to increase
the fees in-year, to the level of individual North Wales local authorities plus FNC rate.
During 2011-12 the Health Board was invited and accepted an invitation to work with
the six local authorities in North Wales, who were collaborating on developing more
robust methodologies for assessing the costs incurred by home owners and setting
fees in light of this information, as legal challenges to date had focussed on the
processes commissioners had gone through to assess care home costs and their
consideration to these in setting fees. The outcome of the work was an agreed
methodology for the 6 local authorities which was then used to set their individual
rates for residential care from April 2102.
From April 2012 the Health Board set its fees based on the each local authority’s
rate plus the agreed FNC rate. In practice this meant a standard rate for the counties
of Wrexham, Flintshire and Denbighshire, and 3 separate rates for the other
individual counties.
Assessment
Free Nursing Care (FNC)
Having ascertained the typical levels of registered nursing care and associated costs
in 2013/14, there is now a need to consider any inflationary uplift for the year from
April 1st 2014.
The implication of the part implementation of the findings of the review in 2013/14
means that the fee will automatically rise to £138.61 from April 1 st. In addition all
Wales Chief Executives propose that for the next 5 years that inflationary uplifts are
linked to national increases in pay based on band 5 Agenda for Change. While the
national review body has recommended a 1% increase in pay for 2104/15 no
decision has yet been made by the Welsh Government.
The implication of a 1% uplift would be to increase the weekly FNC rate to £139.90.
(Direct registered nurse cost £129.90 plus £10 for continence products.)
NB: Agreement on an all Wales system for procuring and distributing
incontinence pads has yet to be finalised. The current assumption is that when
it is agreed the pads will be provided by the Health Board and the FNC rates
will be reduced by the £10, already in the current rate for their purchase.
3
The table below shows the build-up of the FNC rate change since 2011/12.
Betsi Cadwaladr University Health Board - FNC Rates 2014-15 DRAFT
Locality
BCU HB FNC BCU HB FNC BCU HB FNC FNC Review - BCU HB FNC FNC Review - Proposed Proposed Increase %
FNC FNC Rate in Basic Increase
Rate
Rate Rate 2013/2014 Increase Rate 2013/2014 Increase
2011/2012 2012/2013 1st April 2013 (backdated to
2014/15 Inflationary 2014/2015 Rate per
Increase
1st April 2013)
Week
2014/15 1%
FNC Propsed FNC
Total Increase Inflationary
Impact £ £9.02 Increase 1%
FNC Fee Rates
General Nursing
EMI Nursing
120.56
120.56
120.56
120.56
120.56
120.56
9.03
9.03
2014/15 Financial Implications
129.59
129.59
TOTAL
9.02
9.02
1.29
1.29
139.90 10.31 7.96%
139.90 10.31 7.96%
404,270 353,687
218,801 191,424
623,071 545,111
In summary the impact in 2014/15 of the full implementation of the outcome of the
FNC review is £545,111 per annum, and if agreed, a 1% inflationary uplift would cost
a further £77,960 per annum.
Continuing Health Care (CHC)
Having refreshed their fee setting methodology, the 6 North Wales local authorities
have now reviewed their fees for 2104/15 and are proposing increases rates from
April 2014, please note that with Anglesey and Gwynedd now setting their fees in
line with Wrexham, Flintshire and Denbighshire there is now a common rate for 5 of
the 6 County areas which takes us closer to having a standard Regional rate.
In line with the arrangements for the previous two financial years the Health Board’s
rates for CHC should be based on the rate payable by each local authority to
providers in their area plus the revised FNC rate
In summary the proposed rates are set out below.
If the Health Board matches the fees, as is current practice and a 1% FNC
inflationary uplift is agreed, the financial impact is £625,144 additional cost per
annum. The table below shows the impact on the General Nursing and EMI Rates by
county area.
4
50,583
27,377
77,960
Betsi Cadwaladr University Health Board - Continuing Healthcare and FNC Rates 2014-15 DRAFT
Locality
BCU HB
BCU HB BCU HB General Local Authority FNC Rate
BCU HB Increase %
General
General Nursing Rate General Nursing 2014/2015
General in Basic Increase
Nursing Rate Nursing Rate 2013/2014 Rate 2014/2015
Nursing Rate Rate per
2011/2012 2012/2013
2014/2015 Week
FNC Proposed FNC LA Residential
Total Increase Inflationary Fee Increase
Impact £ £9.02 Increase 1%
1%
General Nursing Rate
565.00
561.83
545.28
564.34
552.04
564.34
Anglesey
Conwy
Denbighshire
Flintshire
Gwynedd
Wrexham
583.00
617.56
614.73
614.73
605.03
614.73
635.29
637.59
635.29
635.29
633.01
635.29
2014/15 Financial Implications
514.40
517.00
514.40
514.40
514.40
514.40
139.90
139.90
139.90
139.90
139.90
139.90
654.30
656.90
654.30
654.30
654.30
654.30
19.01
19.31
19.01
19.01
21.29
19.01
2.99%
3.03%
2.99%
2.99%
3.36%
2.99%
TOTAL
35,684 16,932
117,050 55,028
63,439 30,101
67,404 31,982
109,068 46,563
46,588 22,105
439,234 202,712
2,422
7,870
4,305
4,574
6,659
3,161
28,991
16,331
54,152
29,033
30,848
55,846
21,321
207,531
Betsi Cadwaladr University Health Board - Continuing Healthcare and FNC Rates 2014-15 DRAFT
Locality
BCU HB EMI BCU HB EMI BCU HB EMI Local Authority FNC Rate
Nursing Rate Nursing Rate Nursing Rate EMI Nursing Rate 2013/2014
2011/2012 2012/2013
2013/2014
2014/2015
BCU HB EMI Increase %
Nursing Rate in Basic Increase
2013/2014 Rate per
Week
FNC Proposed FNC LA Residential
Total Increase Inflationary Fee Increase
Impact £ £9.02 Increase 1%
1%
EMI Nursing Rate
Anglesey
Conwy
Denbighshire
Flintshire
Gwynedd
Wrexham
612.00
603.04
571.23
594.99
585.43
597.31
632.00
660.56
638.30
638.30
642.83
638.30
659.28
680.59
659.28
659.28
672.56
659.28
2014/15 Financial Implications
538.85
561.00
538.85
538.85
538.85
538.85
139.90
139.90
139.90
139.90
139.90
139.90
TOTAL
678.75
700.90
678.75
678.75
678.75
678.75
19.47
20.31
19.47
19.47
6.19
19.47
2.95%
2.98%
2.95%
2.95%
0.92%
2.95%
10,152
51,892
58,903
25,381
14,202
25,381
185,910
4,703
23,046
25,398
11,758
20,694
11,758
97,358
673
3,296
3,632
1,682
2,960
1,682
13,924
4,776
25,550
29,873
11,941
-9,452
11,941
74,628
In summary the rates for General and EMI nursing with and without a 1% increase to
FNC are set out below.
County Area
Anglesey
Conwy
Denbighshire
Flintshire
Gwynedd
Wrexham
Opening Rates Based on Full
Impact of 2103/14 FNC plus
Local Authority Uplift 2014/15
BCUHB
BCUHB
Revised CHC
Revised CHC
Rate
Rate
General
General
£653.01
£655.61
£653.01
£653.01
£653.01
£653.01
£677.46
£699.61
£677.46
£677.46
£677.46
£677.46
Rates with 1% Uplift to FNC
2014/15
BCUHB
Revised CHC
General Rate
CHC (basic
Rate
£654.30
£656.90
£654.30
£654.30
£654.30
£654.30
BCUHB
Revised CHC
EMI Rate
CHC (basic
Rate
£678.75
£700.90
£678.75
£678.75
£678.75
£678.75
5
Recommendations
1. To note the national process that took place to revise FNC rates in 2013/14
and the.
2. To agree the principle of uplifts to FNC rates from 1st April 2014 to be linked to
national increases in band 5 Agenda for Change rates.
3. To note the increase fees set by the Local Authorities in North Wales from
April 2014
4. To agree that revised CHC rates for 20014/15 should continue to be based on
the Local Authority rates plus the revised FNC rate for the period from April
2014 subject to recommendation 2 above.
6