Developing a CQUIN Commissioner-Provider Contract

North of Tyne PCTs (the management team for two PCTs in NHS North East) needed a contract for the Addictions service developed in line with the new model contract 2009, in place before end of March 2009 (ie before the start of the new financial year). Time was limited, so they engaged Minney.org to provide extra resource.
The addictions service is commissioned individually by NHS and local authority commissioners in each of the two locations, therefore in effect there are four separate legal entities as commissioners. There are a number of providers: this contract was with the Mental Health trust which covered the whole region, and it needed to incorporate and formalise the work this NHS Trust does to support one of the other providers with supervision and holiday cover.
Minney.org Ltd engaged with the separate commissioners and with the relevant directorates within the Mental Health trust to establish a common understanding, or where this didn’t exist, to highlight the differences and establish a forum for discussion of these differences. Although the Mental Health Services Model Contract is fairly prescriptive, we negotiated some additional “standard” clauses to cover staff as well as service users under the diversity and equality section.
The contract was completed with a lot of engagement from both commissioners and providers, and was submitted on time (ie with a week to go). The contract also included an innovative Quality Performance Incentive Scheme (CQUIN), which encourages innovation and improvement and was one of the first in UK.
Challenges
Information on activity: The relationship between commissioner and provider is always challenging: providers hold all of the data and knowledge and are understandably not keen to give the commissioner easy ways to seek out and contract with alternative providers. Health activity is better understood in acute care where most health interventions are relatively short-term and defined and a system of Payment by Results has been in place for 3 years, but mental health is recognised as one of the biggest challenges.
We worked with the provider both to understand the volumes and types of service users and their costs, and the makeup of the costs. We compared this with the information that each of the commissioners, and the commissioners collectively, held on provider activity and supported both data rationalisation and a more appropriate reporting mechanism. And through dialogue we diffused some of the tensions and concerns.
CQUIN (Quality Performance Incentive Scheme) is a new concept and is seen by both providers and commissioners as a threat. For providers, the money for the performance scheme is taken away at the start and they have to hit performance targets in order to gain it back, though they have an opportunity to add to the amount they receive by reaching higher targets. For commissioners, since providers hold all of the data their fear is that the provider will set CQUIN targets that enable them to over perform all the way through the contract.
Through understanding the activity and establishing a dialogue based on shared responsibility both for the service users and for the appropriate use of public resources, we established a CQUIN scheme that gives the provider an incentive to improve and the commissioners something for their improvement money.
Bedding In
Since the contract was established relationships between commissioner and provider have improved.
The CQUIN scheme has inevitably required some refinements, but this is to be expected in a new and innovative scheme and one where there were few precedents of any kind.
North of Tyne PCTs have made the Addictions Service contract into one of their model contracts and are basing future contracts on the document and on the approach taken.