Part 1: Health Service in England: Integration, Collaboration and Other Changes NHS Payment Scheme Schedule 10: The NHS payment scheme
This Schedule amends the national tariff provisions in the 2012 Act to introduce the NHS payment scheme, the new system for determining the price to be paid by commissioners for health care services.
	Paragraph 2 changes the name of the national tariff to the NHS payment scheme in section 97 of the 2012 Act which deals with conditions of licences for health care service providers.
	Paragraph 3 replaces Chapter 4 of Part 3 of the 2012 Act with new sections 114A to 114F to make provision about the NHS payment scheme.
	New section 114A(1) places a duty on NHS England to publish a document which contains rules for determining the price payable by a commissioner for health care services provided for the purposes of the NHS and for the services that are provided through arrangements made by NHS England or an integrated care board under the Secretary of State’s public health functions under section 7A or 7B of the NHS Act 2006.
	Subsection (2) places duties on the commissioners and providers of services mentioned in subsection (1) to comply with rules made under that subsection.
	Subsection (3) sets out what rules may do and what they may specify. For example, this could include specifying prices or specifying a formula as a basis to determine prices; making different provision for services by reference to other factors; or the rules may confer a discretion on the commissioner of a service or on NHS England.
	Subsections (4) and (5) state that rules under subsection (1) can allow or require prices to be agreed between commissioners and providers of a service, and, where they are so agreed, the rules may set out how they are to be agreed and whether they are to be published.
	Subsection (6) retains in substance the provision formerly in section 119(1) of the 2012 Act which seeks to secure that the prices payable for the provision of services within the scope of the NHS payment scheme result in a fair level of payment for providers of those services, by ensuring that regard is had to cost differences and to differences in the range of services that providers provide.
	Subsection (7) retains in substance the provision formerly in section 116(4)(c), which allows the NHS payment scheme to make rules about making payments to providers in relation to the service being provided.
	Subsection (8) allows the NHS payment scheme to contain guidance on the application of the rules and subsection (9) specifies that a commissioner is required to have regard to that guidance.
	Subsection (10) in substance replicates what was formerly in section 116(12) to clarify that the NHS payment scheme has effect for the period specified in it or, where a new edition takes effect before the end of that period, until the new edition takes effect.
	New section 114B provides NHS England with a power of direction over commissioners where they fail to comply with the rules in the NHS payment scheme.
	Section 114C sets out the requirements on NHS England to carry out an impact assessment and consultation on the NHS payment scheme. It places a duty on NHS England to carry out an impact assessment or publish a statement if it concludes that assessment is not needed, before publishing the NHS payment scheme. Before publishing the NHS payment scheme NHS England must also consult each integrated care board, relevant providers and other persons who NHS England considers appropriate. Section 114C(3) to (8) sets out the consultation process and the definition of a relevant provider for these purposes. This section draws on what was formerly section 69 (duty to carry out impact assessments) and section 118 (consultation on proposals for the national tariff) of the 2012 Act.
	Section 114D replaces what was formerly section 120 of the 2012 Act and deals with objections to the proposed NHS payment scheme during the consultation period. Where a prescribed percentage of integrated care boards or providers object to the proposed NHS payment scheme, NHS England is required to consult such persons as appear to be representative of the integrated care boards or relevant providers who objected (section 114D(1) to (3)). After that point, if NHS England decide to make significant amendments and consider it would be unfair to make the amendments without further consultation, NHS England must reconsult on the revised NHS payment scheme (section 114D(4)).
	Should NHS England decide not to amend the NHS payment scheme following objections, it may publish the scheme but must publish a notice to explain its decision, and share it with integrated care boards and relevant providers who objected to the proposed scheme (section 114D(5)).
	New section 114E(1) sets out how amendments of the NHS payment scheme are made and allows NHS England to revise the payment scheme during the period for which it operates, on the condition that NHS England must be satisfied that any revisions are not significant enough to require the publication of a new NHS payment scheme.
	When deciding whether the amendments are significant enough to require publication of a new NHS payment scheme NHS England must have regard to: the proportion of integrated care boards and relevant providers that would be affected; the impact of such revisions on integrated care boards and relevant providers; whether any integrated care boards or relevant providers would be disproportionately affected; and the amount of any increase or decrease in prices resulting from the revisions (section 114E(2)).
	Section 114E(3) places a duty on NHS England to publish the NHS payment scheme as amended.
	Subsection (4) of section 114E requires NHS England to consult with integrated care boards, relevant providers and any other appropriate persons that would be affected by the proposed amendments to the NHS payment scheme before making the amendments.
	Subsection (5) requires NHS England to publish a notice specifying the proposed amendments and the period for which the consultation period will operate. The consultation period is defined in subsection (6) as 28 days from the day after which the notice is published. Under subsection (7), NHS England must share the notice with integrated care boards, relevant providers and any other appropriate persons.
	New section 114F sets out the definitions for "commissioner", "the NHS payment scheme" and "relevant provider" as referred to throughout Chapter 4.
	Paragraph 4 of Schedule 10 amends section 304(5)(g) of the 2012 Act to refer to the NHS payment scheme rather than the national tariff, to ensure that regulations made under section 114D(1)(b) setting out the objection percentages are subject to the affirmative procedure.