Healthcare costing standards for England
Information requirements and costing processes
Development version 2
Mental health
We support providers to give patients
safe, high quality, compassionate care
within local health systems that are
financially sustainable.
1 | > Contents
Contents
Introduction .................................................................................. 2
Information requirements ........................................................... 4
IR1: Collecting information for costing ........................................... 5
IR2: Managing information for costing ......................................... 30
Costing processes ..................................................................... 44
CP1: Role of the general ledger in costing ................................... 45
CP2: Clearly identifiable costs ..................................................... 48
CP3: Appropriate cost allocation methods ................................... 69
CP4: Matching costed activities to patients .................................. 81
CP5: Reconciliation...................................................................... 92
CP6: Assurance of cost data ....................................................... 97
Mental health costing standards: Introduction
2 | > Introduction
Introduction
This second version of the Healthcare costing standards for England – mental
health should be applied to 2017/18 data and used for all national cost collections.
It supersedes all earlier versions. All paragraphs have equal importance.
These standards have been through two development cycles involving
engagement, consultation and implementation. There will be a third development
cycle before the 2018/19 cost collection. We would like to thank all those who have
contributed to the standards over the two development cycles.
The main audience for the standards is costing professionals but they have been
written with secondary audiences in mind, such as clinicians, informatics and
finance colleagues.
There are three types of standards for mental healthcare costing:
• information requirements: describe the information you need to collect for
costing.
• costing processes: describe the costing process you should follow.
The above two sets of standards, contained in this document, are the core
standards and should be implemented in numerical order before the other type of
standard:
• costing methods: focus on high volume and high value services or
departments. These should be implemented after the information
requirements and costing processes, and prioritised based on the value
and volume of the service for your organisation.
We have ordered the standards linearly but, as aspects of the costing process can
happen simultaneously, where helpful we have cross-referenced to information in
later standards. We have adopted the same numbering as for the acute standards:
this means there are gaps in the sequential order where a standard relevant to the
acute sector is not relevant to the mental health sector.
Mental health costing standards: Introduction
3 | > Introduction
The technical document contains the information required to implement the
standards, which is best presented in Excel. In this document, cross-references to
spreadsheets (eg Spreadsheet CP3.3) refer to the technical document.
We also cross-reference to relevant costing principles. These principles should
underpin all costing activity.1
We have produced a number of tools and templates to help you implement the
standards. These are available to download.
Please note: while we refer to ‘patients’ in the context of patient-level costing, we
recognise that people who access mental health services prefer to be referred to as
service users, clients or residents. The use of the term patient across all sectors
allows us to maintain consistent standards throughout an individual’s health and
social care pathway.2
If you would like to give us feedback on the standards please complete the
evidence pro forma and send it to [email protected]
1 For detail see The costing principles
2 Note: traditionally, the mental health sector did not use the term ‘episode’ for an inpatient stay. The
MHMDS does now use this term, so episode is used throughout the Healthcare costing standards for England – mental health.
Mental health information requirements
4 | > Information requirements
Information requirements
IR1: Collecting information for costing
IR2: Managing information for costing
Mental health information requirements
5 | > IR1: Collecting information for costing
IR1: Collecting information for costing
Purpose: To set out the minimum information requirements for patient-level costing.
Objectives
1. To ensure providers collect the same information for costing, comparison with
their peers and collection purposes.
2. To support the costing process of allocating the correct quantum of cost to the
correct activity using the prescribed cost allocation method.
3. To support accurate matching of costed activities to the correct patient,3
admission, attendance or contact.
4. To support local reporting of cost information by activity in the organisation’s
dashboards for business intelligence.
Scope
5. This standard specifies the minimum requirement for the patient-level4 activity
feeds as prescribed in the Healthcare costing standards for England – mental
health.
3 While we refer to patients in this context of patient-level costing, we recognise that people who
access mental health services prefer to be referred to as service users, clients or residents. 4 Not all feeds are at the patient level. This is a generic description for the collection of feeds
required for the costing process. The actual level of the information is specified in the detail
below: for example, the medicines feed may be at patient or ward level.
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Overview
6. The standards describe two main information sources for costing:
• patient-level feeds
• relative weight values.
7. The five patient-level feeds for mental health services are:
• admitted patient care (APC)
• non-admitted patient care (NAPC)
• supporting contacts
• medicines dispensed5
• clinical multidisciplinary team (MDT).
8. Any costs not covered in the patient-level feeds need relative weight values or
other local information sources to allocate the costs.
9. One way to store relative weight values in your costing system is to use
statistic allocation tables where the standards prescribe using a relative
weight6 to allocate costs.
10. You may be using additional sources of information for costing. If so, continue
to use these and document them in your costing manual (Worksheet 1.2:
Additional information source).
11. The standards provide the following required for costing:
• activities which have occurred – for example, the NAPC feed will itemise all
contacts made by the community mental health nursing team, and this
information tells the costing system which activities to include in the costing
process
• the cost driver to use to allocate costs – for example, eating disorder bed
ward minutes
5 Organisations that do not have their own pharmacy should still have patient-level drug information.
6 See Standard CP3: Appropriate cost allocation methods paragraphs 42 to 66 for more information
on relative weight values.
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• the information to use to weight costs – for example, the drug cost included
in the medicines dispensed feed
• information about the clinical care pathway – for example, information about
outsourced therapy contacts can be used to allocate specific costs in the
costing process.
12. Column C in Spreadsheet IR1.1 lists the patient-level activity feeds required
for costing.
13. Columns D and E in Spreadsheet IR1.2 give the field name and required data
items for each feed, following national naming conventions for the Mental
Health Services Data Set (MHSDS) and other datasets. To build the relevant
patient-level information costing system (PLICS) feed, you may need to
discuss the matching of some local field names with your service teams or
informatics department.
14. We recognise that because of the way care is provided or because of
information governance controls, you may not be able to identify the cost of
care for some patients. It is important to keep in mind that our aim is to cost a
patient, not the patient. This applies to patients accessing sexual health
services and gender dysphoria services. We recognise that we will collect
data for a patient accessing the service and not all data relating to each
patient.
15. See Standard IR2: Management of information for costing to assess the
availability of the required information specified in this standard and for how to
manage it.
16. All patient-level activity feeds need to contain information that can be used to
match the costed activity to a patient episode,7 attendance or contact; such as
the unique episode/contact ID, local patient number, contact date, point of
delivery, ward/team or care professional.8 For example, ‘local patient identifier
(extended)’ is the unique patient reference in the MHSDS.
7 Note: traditionally, the mental health sector did not use the term ‘episode’ for an inpatient stay. The
MHMDS does now use this term, so episode is used throughout the Healthcare costing standards for England – mental health. In reporting terms, episodes can be aggregated up to spells or other measures.
8 A care professional is someone who provides care to patients – a care provider, such as a doctor,
nurse, social worker or therapist.
Mental health information requirements
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17. Note that because the matching hierarchy is not sector specific, integrated
providers can have a single set of matching rules. This means that while the
hierarchy levels in Spreadsheet CP4.1 are not sequential, they should be
completed in order, starting with the lowest number. For example, the
medicines feed starts at level 7 and includes levels 8, 9, 10, 16, 17 and 18.
18. Spreadsheet IR1.1 describes the detail required for the activity and patient
information data. The specific data fields required for each feed can be found
in Spreadsheet IR1.2.
19. You should work with your informatics department to understand the different
types of activity captured and reported against each data feed. This will help
ensure you allocate the correct costs and allocate them in appropriate
proportions, and that activity is reported correctly in your patient-level
reporting dashboard.
20. Some data fields in the feeds will be available from the MHSDS. This is a
relational database and contains many fields not required for costing. You
should import the required fields into PLICS, not the whole MHSDS. Also note:
• where field names are duplicated in the MHSDS, use the MHSDS code
shown in column G – ‘MHSDS unique ID’ – in Spreadsheet IR1.2
• for some fields you may need to add local data or derive data from other
sources to meet all the PLICS information requirements.
Description of patient-level feeds
21. Three types of feed support the matching process and are detailed in column
E in Spreadsheet IR1.1:
• master feeds: the core patient-level activity feeds that the other feeds are
matched to, eg the APC and NAPC feeds
• auxiliary feeds: the patient-level activity feeds that are matched to the
master feeds, eg medicines dispensed feed; auxiliary feeds may also
include other feeds that can be matched to the master feeds
• standalone feeds: the patient-level activity feeds that are not matched to
any episode of care but are reported at service-line level in the
organisation’s reporting process, eg the MDT feed.
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22. The feeds are numbered sequentially for all sectors. Therefore some feed
numbers will not be used in the mental health costing standards as the feed to
which they refer is not required.
23. Spreadsheet IR1.2 contains the activity data fields required for the costing
standards.
24. Your informatics department is best placed to obtain the data required from
the most appropriate source, but to help you find out what information your
organisation is already collecting, refer to Spreadsheet IR2.1.
25. Depending on how your organisation stores and manages information, the
names of the data feeds and fields in Spreadsheet IR1.2 may differ from those
used locally. The data items themselves should be the same, to conform to
national submission requirements.
26. If your organisation is not collecting and using the minimum required activity
data feeds in costing, you need to plan for systems to collect this information
with your informatics department and the departments/teams providing the
services. To help you we have provided:
• a transition path (Spreadsheet Transition path) identifying the information
requirements that should be prioritised; this is the information you should
plan to access first
• a mental health information gap analysis template to help you work with
your informatics department to identify and document the information that is
a priority for improvement.
27. You are not required to collect an activity feed if your organisation does not
provide that activity, eg a provider with no inpatient services is not required to
collect the APC feed. You are not required to collect duplicate information in
the individual feeds unless this is needed for costing, matching or collection
purposes.
28. The reason for including each field in a feed is given in columns L, M, N and P
in Spreadsheet IR1.2.
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29. The standards prescribe the information to be collected, but not how it is
collected. So if you collect several of the specified feeds in one data source,
you should continue to do so as long as the required information is captured.
30. The prescribed matching rules for all the patient-level feeds are given in
Spreadsheet CP4.1.
31. If the costs of any activity in your data feeds are reported in another
organisation’s accounts, you need to separate the activity from the other
activity provided to your patients. Do this by reporting this activity under ‘cost
and income reconciliation reports’, as described in Spreadsheets CP5.1 and
CP5.2. This prevents your own costs being allocated to this activity, deflating
the cost of your own patients, and is why the field ‘organisation identifier (local
patient identifier’ is included in the APC and NAPC feeds.
32. For internal reporting, this activity can be reported as part of patient pathways,
even though it is at zero cost to the organisation. For example, social workers
are paid by the local authority but their activity is part of the mental health
organisation’s patient pathway.
What you need to implement this standard
• Costing principle 1: Good costing should focus on materiality
• Information gap analysis template
• Spreadsheet IR1.1: Patient-level activity feeds required for costing
• Spreadsheet IR1.2: Patient-level field requirements for costing
• Spreadsheet IR1.3: Supporting contacts feed
• Spreadsheet IR2.1: Data sources available as part of national collection
Approach
Patient-level information for the costing process
33. This section describes each feed, explaining:
• relevant costing standards
• collection source
• feed scope.
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34. Work with your informatics department and the service teams providing data
to understand the different types of activity in each feed and to ensure costs
are allocated correctly to activity. Also ensure that activity is reported correctly
in your patient-level reporting dashboard.
35. The MHSDS sourced fields required for APC and NAPC PLICS feeds are
either mandatory or required fields in the MHSDS. The feeds for PLICS are
shown in Spreadsheet IR1.2 and must be populated to facilitate completion of
the costing standards.
36. Use the MHSDS ID and IAPT ID (as appropriate) for each field, as shown in
Spreadsheet IR1.2, when building your feeds. This will ensure the fields are
pulled from a consistent location and the PLICS collection will match to the
MHSDS dataset once submitted.
37. Perform an information gap analysis to identify areas without information.
Work with your service teams and informatics department to plan how to
complete the MHSDS dataset and access other sources of missing data.
38. The required fields are shown in Spreadsheet IR1.2. Column C identifies the
dataset for each, column L the fields used for costing, and columns M, N and
P the fields for matching, business intelligence and collection.
39. Integrated providers should identify the services they provide for different
sectors, and build feeds to include all these sectors – see Standard CM11:
Integrated providers.
40. Each organisation may hold the required data fields in a data warehouse and
receive the PLICS feed from there.
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Feed 1: Admitted patient care
Relevant costing standards
• Standard CM13: Admitted patient care
• Standard CM2: Incomplete patient events
• Standard CM1: Medical staffing
• Standard CM11: Integrated providers
• Spreadsheet IR1.2: Patient-level field requirements for costing
• Spreadsheet IR2.1: Data sources available as part of national collection –
row 5
Collection source
41. This data is collected as part of the nationally collected and mandated
MHSDS.
42. The APC feed is shown in column C of Spreadsheet IR1.2. The fields shown
in column D should be contained in the APC feed to PLICS.
Feed scope
43. All admitted patient episodes within the costing period, including all patients
discharged in the costing period and patients still in bed at midnight on the last
day of the costing period.
44. An episode is a period of responsibility recorded under one care professional.9
45. Costing takes place at hospital episode level as this is the most granular unit
of care recorded in the MHSDS. Each episode includes the relevant
‘resources’ and ‘activities’ as required by the Costing Transformation
Programme (CTP). Episode costing represents responsibility for that patient’s
care by a named professional.
46. The period starting with the ‘start date (care professional admitted care
episode)’ and finishing with the ‘end date (care professional admitted care
episode)’ spans the length of stay used for costing.
9 Hospital episode is defined in the NHS Data Dictionary.
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47. If the ‘end date (care professional admitted care episode)’ field has not been
completed for a patient, that patient will still be in a bed, and so will be
categorised as an incomplete patient event. See Standard CM2: Incomplete
patient events.10
48. Including patients who are still in a bed reduces the amount of unmatched
activity and ensures that discharged patients are not allocated costs that
relate to patients who have yet to be discharged.
49. Feeds such as Feed 10: Medicines dispensed will contain all the patient-level
activity that has taken place in a month, regardless of whether or not the
patient has been discharged. All these activities can now be costed and
matched to the correct patient whether or not they have been discharged,
building an appropriate view of the costs incurred during a period.
50. A spell is the full length of the inpatient stay – from admission to discharge.11
51. Use the ‘discharge date (hospital provider spell)’ to identify if a patient has
been discharged from the hospital. This is needed to inform a further derived
field of ‘discharge flag’ which is used for the PLICS collection (see Derived
and additional fields below, paragraphs 71 and 72).
52. Many patients will have one episode within one spell, but some will have more
than one episode within one spell. This should not influence the costing
process.
53. The APC feed also includes details for admitted patients, such as ward
admitted to (eg high secure, rehabilitation, etc identified by ‘ward code’). If
these fields cannot be populated from the MHSDS data, they should be
populated from a relevant local source.
54. The service giving the patient care should be identified by ‘service or team
type referred to (mental health)’.
55. The feed must include the date and time stamps to allow the number of
occupied bed minutes to be calculated, and so the ward cost for the time the
patient spent there to be allocated to the patient:
11 Hospital provider spell is defined in the NHS Data Dictionary.
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14 | > IR1: Collecting information for costing
• ‘start date (ward stay)’
• ‘start time (ward stay)’
• ‘end date (ward stay)’
• ‘end time (ward stay)’.
56. Every time a patient moves to a different ward/location needs to be captured
using the ward code identifier data field.
57. The fields ‘ward setting type (mental health), intended clinical care intensity
code (mental health)’, and ‘ward security level’ give information about the type
of ward the patient is admitted to.
58. The feed should identify the lead care professional responsible for that patient,
under ‘care professional local identifier’. This will change if an episode ends,
to reflect the different professional responsible for the patient at the different
stages of their pathway.
59. The APC feed will not include details of other care professionals working with
the admitted patient (eg consultant, nurse, therapist, etc), as this information is
not contained in the MHSDS. To capture this information, the supporting
contacts feed should include staff contacts with the patient, according to the
prescribed scenarios in Standards CM1, CM3 and CM13 and including
contacts with therapists, psychologists and specialists, and additional
sessions with medical staff.
60. ‘Main specialty code (mental health)’ is included in the feed to enable
matching for supporting datasets and integrated provider submissions of cost
information.
61. Home leave: some patients may return home for planned or trial periods while
still admitted to an inpatient bed: a practice designed to ensure a bed is
reserved for their care.
62. The MHSDS and therefore the APC dataset include this leave to reflect the
continuing responsibility for the patient. But as far fewer resources are used
during home leave, this time is not costed. Resources/activities should be
Mental health information requirements
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applied to patients according to their length of stay net of home leave days.12
See Standard CM13: Admitted patient care.
63. Periods of home leave should be excluded from costing calculations based on
time on the ward calculated using the following fields (as per Spreadsheet
IR1.2):
• ‘start date (home leave)’
• ‘start time (home leave)’
• ‘end date (home leave)’
• ‘end time (home leave)’.
64. Also, by including these home leave fields, home leave can be reported in
local reporting dashboards.
65. The patient's ‘administrative category code’ shows the category of
commissioner for their care, eg private patient, overseas visitor, NHS patient
living outside England, patient funded by the Ministry of Defence. The field is
included for reporting but is not required for the costing process.
66. Administrative category code may change during an episode; for example, the
patient may opt to move from NHS to private healthcare. In such cases, the
start and end dates for each new administrative category period should be
recorded in the APC feed so that patients can be correctly identified and
costed accurately.
67. The feed should contain the patient’s ‘NHS number’, to allow organisations
where patient-level medicines are provided by another NHS organisation to
match the medicines to the episode. This may also be of use in local pathway
costing across organisations.13
68. Where a patient has a care programme approach meeting (CPA) during an
admission, the date of this will be included in the field ‘care programme
approach review date’. See Standard CM9: Multidisciplinary meetings
12
The patient may incur costs during home leave, such as escorting costs. These are described in Standard CM13: Admitted patient care.
13 With appropriate information governance arrangements in place.
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69. Where a patient undergoes a medical/physical intervention during their
admission, the field ‘coded procedure and procedure status (SNOMED CT)’
will include a code that identifies the procedure, eg electroconvulsive therapy
(ECT).
Derived and additional fields
70. As the MHSDS is not solely designed for costing purposes, some other fields
need to be included in the APC dataset used for costing, taken from other
fields in the originating data.
71. These fields are:
• ‘discharge flag’ – derived field. This is where the ‘discharge date
(hospital provider spell)’ is null. This is used to indicate whether the
inpatient spell was completed within the financial year.14 This field is used in
the PLICS collection to identify incomplete spells; these can then be
matched and costed appropriately. Valid values are:
1 = Started in previous period and completed in current period
2 = Started in current period and patient not discharged at end of current
period
3 = Start and finished in current period
4 = Started in previous period and patient not discharged at end of current
period.
• ‘Escorted home leave’ – additional field.15 This will need to be populated
from a source other than the MHSDS, to show where escorting costs need
to be allocated during a home leave period. See Standard CM13: Admitted
patient care.
14
This is used by the PLICS collection team at NHS Improvement to reconcile the PLICS submission to the reference costs submission.
15 This field is currently for a superior costing method, but one which will become a prescribed costing method in later versions of the costing standards.
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Feed 3: Non-admitted patient care16
Relevant costing standards
• Standard CM3: Non-admitted patient care
• Standard CM1: Medical staffing
• Standard CM14: Group sessions
• Standard CM11: Integrated providers
• Spreadsheet IR2.1: Data sources available as part of national collection. row 5
Collection source
72. This data will come from the nationally collected and recently mandated
MHSDS.
Feed scope
73. The NAPC feed is shown in column C of Spreadsheet IR1.2. Fields with this
identifier should be contained in the NAPC feed to PLICS.
74. This feed includes all patients who had an attendance, contact or care
provided in a non-admitted care setting within the costing period.
75. This feed is designed to be a ‘catch all’ activity feed. It will include
• formal booked ‘clinic’ contacts
• non-admitted patient contacts – informal contacts, drop-in sessions and
outreach services
• other face-to-face contacts, including those in the patient’s residence
• telemedicine consultation, including telephone calls and other telemedicine
contacts such as text, email, video conference, etc17
• ward attenders (outpatient contacts where a patient who does not need full
admission to an inpatient unit is seen in a ward environment)
• daycare (patients attending for general supportive activities throughout a
day, sometimes – but not necessarily – including clinical therapy). They are
16
The feed numbers are used across all sectors. For a full list, see Spreadsheet IR1.1. Integrated trusts can use the ‘likely sector’ filter to reveal the other feeds.
17 www.datadictionary.nhs.uk/data_dictionary/attributes/c/cons/consultation_medium_used
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not admitted, but are present for a far longer time than a standard NAPC
contact
• group contacts.
76. The patient identifier field is ‘local patient identifier (extended)’.
77. Fields ‘care contact identifier’ and ‘care contact date’ are used for the PLICS
collection and also to match other feeds to the NAPC contact. ‘Care contact
time’ is not required for the PLICS collection for MHSDS data, but is required
for the improving access to psychological therapies (IAPT) dataset (Feed 16)
and so should be included in the NAPC feed for consistency.
78. Where the ‘care contact date’ and the ‘care programme approach review date’
are the same, a CPA meeting has taken place.
79. Data fields in this feed capture details of the location where care was
provided. A combination of the fields ‘service or team type referred to (mental
health)’ and ‘activity location type code’ give a local service and site code.
80. Where community mental health teams (CMHTs) treating patients when they
are admitted to a ward is recorded in the NAPC feed, this should be costed as
a separate contact. These costs should not be absorbed into the admitted stay
by entering these contacts into the supporting contacts feed. See Standard
CM13: Admitted patient care for further detail.
81. Costing of NAPC patient contacts should be a time-based allocation of
resources. Use field ‘clinical contact duration of care contact’. This is the
actual time the contact lasts, and should not include time spent on supportive
work before or after the patient contact, nor travel time. See Standard CP3:
Appropriate cost allocation methods and Standard CM3: Non-admitted patient
care for detail on using duration of patient-facing time and treatment of travel
time, respectively.
82. ‘Main specialty code (mental health)’ is included in this feed to enable
matching for supporting datasets and local reporting of pathway costs.
83. Groups: Sessions for more than one patient will have a different cost from
that for a single patient contact. See Standard CM14: Group sessions. Fields
used in the costing process are:
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• the NAPC feed captures whether or not the contact was a group contact –
use field ‘group therapy indicator’
• the field ‘clinical contact duration of group session’ shows the group session
duration
• the field ‘number of group session participants’ gives the number of patients
in the group session.
84. The NAPC feed contains data fields that capture when a patient did not attend
(DNA) or was not present at the location of the contact, or in the case of a
child/vulnerable adult was not brought (WNB) to their NAPC appointment. Use
field ‘attended or did not attend code’. DNAs are to be excluded from the cost
collection, but the field is included for local reporting. See Standard CM3: Non-
admitted patient care.
85. The NAPC feed uses field ‘consultation medium used’ to indicate whether a
contact was face to face, or using telemedicine (including telephone calls,
video conference, text, email or online patient model). See Standard CM3:
Non-admitted patient care for more information.
86. The patient's ‘administrative category code’ shows the category of
commissioner for their care, eg private patient, overseas visitor, NHS patient
living outside England and patient funded by the Ministry of Defence. The field
is included for reporting but is not recognised by the costing process. The
administrative category code does not normally change during a NAPC
contact.
87. The field ‘language code (preferred)’ is used to allocate interpreting costs to all
patients with a language code of ‘not English’.
88. We recognise that not all NAPC activity is captured in the MHSDS. You need
to work with your informatics department and the department responsible for
the data to get the relevant activity information and include additional fields in
the NAPC feed. For example:
• ‘multiprofessional contact’: The MHSDS currently does not identify
multidisciplinary contacts separately from single professional contacts. See
Standard CM9: Multidisciplinary meetings. This information is important for
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allocating cost from the relevant resources, and a field has been added for
local population.
Feed 7: Supporting contacts18
Collection source
89. This data needs to be collected locally.
Feed scope
90. All patients who had contacts from anyone other than their named care
professional within the costing period.
91. A patient can be expected to have contact with their named care professional
during their admission as part of standard ward rounds and ward care.
However, they will also have single professional contacts with other care
professionals, and take part in multiprofessional and/or multidisciplinary
contacts during their episode – such as occupational therapy sessions and
CPA meetings.
92. The supporting contacts feed is designed to reflect the multifaceted nature of
a patient’s pathway and costs associated with it. The detail and accuracy of
the final patient cost are improved by including these activities in the costing
process.
93. Staff who may perform supporting contacts are listed in column A in
Spreadsheet IR1.3, but this is not an exhaustive list.
94. Spreadsheet CP4.1 contains prescribed matching rules for this feed.
95. Fields used in the costing process are:
• ‘local patient identifier (extended)’ – for matching the patient to the
supporting contact
• ‘contact start date and time’ – for matching, and to calculate the contact
duration
18
The feed numbers are used across all sectors. For a full list, see Spreadsheet IR1.1. Integrated trusts can use the ‘likely sector’ filter to reveal the other feeds.
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• ‘contact end date and time’ – for matching, and to calculate the contact
duration
• ‘care contact duration’ – for allocating resources to activities
• ‘healthcare professional code’ – for allocating the correct resource for the
staff member/type to activities
• ‘contracted-out indicator’ – to identify costs for a patient that are shown
separately in the general ledger because services have been purchased
from another provider
• ‘group contact’ – to identify whether a contact included more than one
patient. See Standard CM14: Group sessions
• ‘multidisciplinary contact’ – to identify whether the contact involved more
than one member of staff. See Standard CM9: Multidisciplinary meetings.
Feed 10: Medicines dispensed19
96. This feed contains details of drugs administered to a patient during their
treatment, including the actual drug cost. As such it is a valuable source of
patient information and matching it to the appropriate patient episode/contact
is vital.
Relevant costing standards
• Standard CP4: Matching costed activities to patients
• Standard CM10: Pharmacy and medicines
• Spreadsheet IR2.1: Data sources available as part of national collection –
row 11
Collection source
97. This data needs to be collected locally from the pharmacy system or a report
supplied by the pharmacy provider under contract, as there is no national
dataset for medicines prescribed.
98. Local information may be supplemented by the mandated devices and drugs
taxonomy and monthly dataset specifications for NHS England’s specialised
commissioning on high cost drugs, which covers approximately 70% of high
19
The feed numbers are used across all sectors. For a full list, please see Spreadsheet IR1.1. Integrated trusts can use the ‘likely sector’ filter to reveal the other feeds.
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22 | > IR1: Collecting information for costing
cost drugs nationally (including acute services). This may be useful for some
mental health organisations and integrated trusts.
99. The information relating to any locally commissioned high cost drugs may also
inform the medicines data feed.
100. A list of the data fields you need to include in this feed is given in Spreadsheet
IR1.2. Information collected through this feed will be matched to the APC and
NAPC feeds using the prescribed matching rules in Spreadsheet CP4.1.
Feed scope
101. This feed should allow matching of medicines dispensed and identified to an
individual patient during an admission or a NAPC contact, for accurate costing
within the costing period. Such medicines are likely to include controlled drugs
and high cost items, but possibly also regular and other medications.
102. For information on the matching of medicines to patients, see Standard CP4:
Matching costed activities to patients and Standard CM10: Pharmacy and
medicines.
103. The standard fields for matching are ‘organisation code (local patient identifier’
and ‘date of issue’.
104. Medicines issued to wards that are not identified to an individual patient may
also be included in this feed – for example, non-identifiable drugs or ‘ward
stock’ drugs. These should be allocated in accordance with a relevant
allocation method. Use activity ID: MDA065; activity: Dispense non patient-
identifiable drugs.
105. Medicines dispensed to locations other than wards should be included in the
feed, including NAPC contacts.
106. Fields used in the costing process are:
• ‘drug identification’ – the name of the drug dispensed (you should ensure
this field contains the medicine name, not the brand name). Having the
name of the medicine and not just its code will improve local reporting of
the PLICS and discussions with clinicians
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23 | > IR1: Collecting information for costing
• ‘total drug cost’ – this field contains the key information for patient-level
costing
• ‘drug quantity supplied (units)’ – this field will improve understanding of the
medicines included for local verification and reporting
• ‘location code’ – this field will improve local reporting and enable discussion
with the correct service area.
107. Note the ‘drug identification’ field may include both the medicine and the
quantity supplied, eg ‘risperidone 50 mg powder and solvent for suspension
for injection vials’.
108. The feed should contain the patient’s ‘NHS number’, to allow organisations
where patient-level medicines are provided by another NHS organisation to
match the medicines to the episode.
109. The ‘contracted out flag’ field is required in the medicines dispensed feed to
understand data completeness in local datasets. The field may need to be
derived from a relevant feed in your local system, eg ‘requesting care provider
code’.
110. Care professionals prescribe and dispense drugs in both APC and NAPC
settings, or may simply issue a prescription for the drug to be dispensed
elsewhere (FP10 prescriptions). The medicines dispensed feed should include
all:
• medicines dispensed to a patient on a provider site
• FP10 prescription costs recorded in the provider’s ledger.
111. FP10 prescription information gives useful information about the patient
pathway, so should be included. The costs of these prescriptions can be
treated in different ways:
• Where community or private pharmacies or the NHS Business Services
Authority – NHS Prescription Services (NHSPS) 20 – charge the provider for
the cost of FP10 prescriptions, the provider will have recorded this cost in
the general ledger. The organisation should obtain a dataset21 to
20
Formerly the Prescription Pricing Authority 21
The NHSPS is currently trialling a reporting model that allows for patient-level information.
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24 | > IR1: Collecting information for costing
understand which patient prescriptions these relate to, so the cost of the
drugs may be matched to the relevant patient contact as per Standard CP2:
Clearly identifiable costs, and activities as per Standard CM10 Pharmacy
and medicines. This dataset should be included in Feed 7: Medicines
dispensed as shown in Spreadsheet IR1.2.
• Where community or private pharmacies dispense FP10 drugs and charge
this directly to the clinical commissioning group (CCG), not the mental
health organisation, the cost will not be in the organisation’s general ledger
and there is no requirement to gather information on it.
112. Where pharmacy services and/or medicines are supplied by an acute provider
or a non-NHS party, and the cost is in your organisation’s general ledger, the
information received should comply with the fields needed for costing as
above. The NHS number will be required for patient-identifiable drugs, to allow
matching to the episode of care. Work with your pharmacy lead to ensure you
have access to this information.
113. Where the FP10 cost is in the general ledger, but the patient-level information
is not available, the cost should still be gathered into the resource and
allocated equally over all patients who used the service. Work with your
pharmacy lead and informatics department to get better access to patient-
level information.
114. Some medicines may only be provided to one cohort of patients. You should
work with your pharmacy team to find out if there are such cohorts; you can
then query any instances of cost data indicating such a medicine was issued
outside the expected cohort. For example, as melatonin is normally used in
child and adolescent mental health services (CAMHS),22 its issue to an adult
should be queried with the pharmacy or service team.
Feed 16: Improving access to psychological therapies (IAPT)23
115. The IAPT dataset has been recently developed to improve the information
available on assessment and treatment of adult patients with anxiety disorders
and depression. Some organisations also provide these services to older
adults and CAMHS.
22
Information provided by the NHS Improvement mental health lead pharmacist. 23
The feed numbers are used across all sectors. For a full list, see Spreadsheet IR1.1. Integrated trusts can use the ‘likely sector’ filter to reveal the other feeds.
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25 | > IR1: Collecting information for costing
116. This feed should contain the non-admitted contacts for IAPT services that are
not recorded in the MHSDS dataset.
117. The fields available in IAPT – as shown in Spreadsheet IR1.2 – are not the
same as those in the MHSDS, so we are treating this as a separate master
feed. The costing processes should be the same as for NAPC.
118. This information makes costing more appropriate by adding the additional
contacts to the costed patient-level activity; these were previously ‘hidden’
activity (see below). This information is required for the PLICS collection.24
Relevant costing standard
• Standard CM3: Non-admitted patient care
• Spreadsheet IR2.1: Data sources available as part of national collection –
row 7
Collection source
119. This data needs to be collected locally from the PAS or separate clinical
information system, as per the submission of IAPT data. Your informatics
team should be able to supply this dataset.
Feed scope
120. This data is a separate source of contact information from the MHSDS, as
IAPT contacts are not contained in the MHSDS. It contains the following fields:
• ‘organisation code (code of provider)’
• ‘service request identifier, appointment date’ and ‘appointment time’ – used
for the unique reference to the patient
• ‘appointment type’ – gives reporting information on the type of initial or
follow-up appointment
• ‘mental healthcare cluster code (final)’ – used for reporting the cluster
information at national level.
24
Further information on mapping for this feed will be available during implementation.
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26 | > IR1: Collecting information for costing
Additional patient-level activity feeds and fields
121. One purpose of the Healthcare costing standards for England is to help
organisations develop their costing processes in a practical and achievable
way. We encourage organisations to collect more patient-level activity data
wherever practical, taking into account the principle of materiality as stated in
the costing principles.
122. The patient-level activity feeds specified above are the minimum required for
costing but do not cover all the patient activities involved in providing mental
health services. You need to decide whether you require additional patient-
level feeds to meet specific costing needs. Examples of such feeds are:
• prison rehabilitation services
• offsite educational/mental health promotion
• crisis houses
• outreach services.
123. Future development areas should be prioritised according to three criteria:
• value of service
• volume of service
• priority of the service to the provider and the healthcare economy.
124. If your organisation already uses additional patient-level activity feeds in
costing, you should continue to do so. It is not the aim of the costing standards
to push a provider ‘backward’ in its costing journey, although it is important for
consistency that the areas covered by the standards are costed using the
prescribed methods. Record your additional feeds in your costing manual
(Worksheet 1.2: Additional information source).25
125. If you are not collecting and using the prescribed patient-level activity feeds in
your costing, you should work with your informatics department and the
department responsible for the data feed to introduce systems to collect the
information required to improve costing, and at the same time provide useful
information for patient care and business activities. Use the information gap
25
The prescribed feeds should be achieved in full before any additional non-standard feeds are developed.
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27 | > IR1: Collecting information for costing
analysis template to manage the identification, planning and action process
with your informatics colleagues. You should prioritise the prescribed feeds
over adding additional feeds.
126. Figure IR2.1 in Standard IR2: Management of information for costing gives
more detail on the information an organisation needs to collect.
Identifying hidden activity
127. Take care to identify any ‘hidden’ activity in your organisation. This is activity
that takes place but is not recorded on any main system such as the patient
administration system (PAS).
128. In some organisations, teams report only part of their activity on the main
system such as PAS, eg a department reports its APC activity on PAS but its
outreach activity on a separate clinical information system. Or a service team
records telephone calls with patients in a book, not electronically. Also,
provider mergers mean data is held in different systems. If any of these are
the case, work with your informatics department and the department
responsible for the data to obtain a feed containing 100% of the department’s
activity.
129. Capturing ‘hidden’ activity is important to ensure:
• any costs incurred for this ‘hidden’ activity are not incorrectly allocated to
recorded activity, inflating its reported cost
• costs incurred are allocated over all activity, not just activity reported on the
provider’s main system
• income received is allocated to the correct activities.
Contracted-in activity
130. If your organisation receives income for services delivered to another provider,
eg specialist art therapy, and this activity is included in your patient-level data,
the income received for it should not be used to offset costs. The activity
should be costed exactly as for own-patient activity but the costs should be
reported as ‘other activities’ and not matched to your organisation’s own
activity.
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28 | > IR1: Collecting information for costing
131. Use the contracted-in flag in column D of Spreadsheet IR1.2 to identify this
activity.
Other data considerations
132. Spreadsheet IR1.2 contains the required data fields for the patient information
feeds specified. These fields have various functions, such as costing,
matching collection or local reporting, as shown in columns L, M, N and P.
You may add fields for local purposes.
133. The activity feeds do not contain any income information. Your organisation
may decide to include the income for the feeds at patient level to enhance the
value of its reporting dashboard.26
134. The feeds do not include description fields.27 You may request that these are
included in the feeds; otherwise you will need to maintain code and
description look-up tables for each feed to understand the data supplied. You
will need a process to map and maintain a rolling programme for revalidating
the codes and descriptions with each service.
135. Locally generated specialty or service team codes may be used to allow
specialist activity to be reported internally at a more granular level than
treatment function code (TFC).
136. If local specialty codes are used, they should be included in the patient-level
feeds and in the costing process. The costs and income attributed to these
specialist areas need to be allocated correctly. You need to maintain a table
mapping the local specialty codes to the national TFCs. This needs to be
consistent with the information submitted nationally to ensure activity can be
reconciled.
137. Ideally, data feeds will come from the same PAS, but it is recognised that
some organisations may run different systems for different sites – including
where organisations have merged. Such different datasets should still contain
the same information required for national submissions, or should be
developed to attain this consistency. Therefore the feeds required for costing
purposes should also aim to provide the relevant data as described above.
26
See Standard CM4: The income ledger. 27
Refer to Spreadsheet IR1.1 for full details.
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29 | > IR1: Collecting information for costing
Proxy records
138. For areas with no patient-level activity, it may be possible to create proxy
records at patient level. These should conform to the same criteria as the
MHSDS, but remain clearly identifiable as proxy records. However, these
should be treated with caution and noted in your costing manual (Worksheet
15: Proxy records). They should also appear in the activity reconciliation – as
described in Standard CP5: Reconciliation – as the costed patient records will
not reconcile to the in-house activity count.
139. You should avoid generating proxy patient contact/attendance records in the
costing system to solve data quality issues in the main patient feeds. It is
better practice to work with your informatics department and service teams to
create the correct data entry on the ‘right first time’ principle. Creating proxy
records can lead to double counting of activity outputs – for example, when
someone later adds a missing record and it flows through to the costing
system, a second amount of cost will be picked up for the same activity.
140. However, proxy patient contact/attendance records can be created to provide
patient records to which to attach cost – for example, care provided outside
the organisation, or to provide anonymous costed records for services that
need to cost a patient not the patient – for example, some sexual health
services.
PLICS collection requirements
141. The master feeds of APC and NAPC form the basis of the cost collection. In
the mental health cost collection, APC costs must be aggregated to spell and
cluster code, and NAPC costs to contacts and cluster. IAPT will be collected
as a separate data feed for 2017/18. See Section 2 of the 2017/18 mental
health development PLICS cost collection guidance for more information.
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30 | > IR2: Managing information for costing
IR2: Managing information for costing
Purpose: To assess the availability of the information specified in Standard IR1: Collecting information for costing purposes.
Objectives
1. To explain how to use information in costing.
2. To explain how to support your organisation in improving data quality in
information used for costing.
3. To explain how to manage data quality issues in information used for costing
in the short term.
4. To explain what to do when information is not available for costing.
Scope
5. All information required for the costing process.
6. This standard covers the technical aspects of managing the required
information, to help you use the costing methods.
Overview
7. Costing teams are not responsible for the quality and coverage of information:
that responsibility rests with your organisation. But you are ideally placed to
raise data quality issues within your organisation.
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31 | > IR2: Managing information for costing
8. This standard focuses on the steps you can take to be confident about the
data used for costing and to support improvements in data quality in your
organisation.
9. It provides guidance on how you can mitigate the impact of poor quality
information when producing cost information. We consider these to be short-
term measures that allow you to produce reasonable cost information in line
with the costing principles while your organisation continues to work on the
quality and coverage of its information as a whole.
10. Your organisation should have its own governance arrangements for
managing data capture and flows, and for data quality. Information on this
process should be available from your chief information officer.
11. You may also find it useful to build a relationship with your organisation’s chief
clinical information officer, to ensure the activity data is understood and cost
(and income) data is used alongside the activity as part of the decision-making
toolkit.
12. Use the information gap analysis template and work with your informatics
colleagues and relevant services to assess data availability for costing, and to
streamline processes for extracting what is required.
13. Use the sources listed in Spreadsheet IR2.1 to inform discussions.
Availability of information for costing
14. Most of the required information28 should be held in your organisation’s
information systems, but availability will vary due to differences in how
information is managed and your IT capacity. Here we provide guidance on
assessing data availability.
15. Information availability for your organisation can be grouped as follows:
• available as part of national data collections – for the patient-level feeds
APC and NAPC, use national data collections from MHSDS and IPAT to
capture all or some of the data. Information relating to these national data
collections is given in Spreadsheet IR2.1
28
As specified in Standard IR1: Collecting information for costing purposes and the technical guidance.
Mental health information requirements
32 | > IR2: Managing information for costing
• available in department-specific systems – you should obtain all or
some of the data from the informatics department or direct from the
department or specialty for these feeds, eg the medicines dispensed feed
• unavailable at patient level – depending on your organisation’s patient-
level data collection arrangements, data may not be available; for example,
if all areas of your organisation have yet to adopt the MHSDS. Note these
areas in the information gap analysis, and work with your informatics
department to make progress adoption of the MHSDS.
16. The quality of information varies among organisations but the information for
the APC and NAPC feeds should be available at all mental health
organisations. The medicines dispensed feed will only be available at
organisations that have either a pharmacy function or access to information
from the partner organisation that dispenses drugs for them. Supporting
contacts information may need a new system for recording the data.
17. Spreadsheet IR2.1 lists data sources in national collections that are relevant
to patient-level feeds.
18. You should work with your informatics department to perform a gap analysis
to see where you are meeting or exceeding the requirements, and where
information is missing or not yet available for costing. An information gap
analysis template is available for this.
19. Figure IR2.1 below is a flowchart showing you how to access data for costing.
20. You may be able to obtain feeds from your informatics team or directly from
the department. If these services are outsourced you need to obtain patient-
level information from the supplier.
21. Agree with informatics colleagues the format of information, frequency of
patient-level activity feeds and any specific data quality checks for costing.
Also work with your informatics colleagues and relevant services to streamline
processes for extracting the information required for costing.
22. Where patient demographic information is not available for governance or
confidentiality reasons, costs should still be allocated to a patient, not
necessarily the patient by following the costing process. The costing software
may require a proxy patient record and anonymous patient number to provide
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33 | > IR2: Managing information for costing
a base for the costs to be attached to. In this case, the process for
managing/allocating these records should be recorded in your costing manual
(Worksheet 15: Proxy records).
Unavailable data
24. If your organisation does not collect information for auxiliary data feeds it will
not be available to the costing team – for example, if medicines are dispensed
by a local acute hospital or a private pharmacy.
24. Information for costing may be unavailable because:
• it is not collected at an individual patient level
• data is not given to the costing team
• data is not in a usable format for costing
• data is not loaded into the costing system and included in costing
processes.
Making data available
25. If you are missing any of the required data fields in Spreadsheet IR1.2, you
should follow the steps shown in Figure IR2.1 to make the data available for
costing.
26. Figure IR2.1 helps you identify why patient-level activity information may not
be available and the action you need to take to make it available.
27. Until the data becomes available, you will need to use an alternative costing
method to allocate costs, eg relative weight values.29
28. When patient-level activity data is unavailable, you need to continue to use
your current method as a work-around and log it in your costing manual
(Worksheet 1.4: Missing activity data). You should see this as an interim
method and start to collect all information specified in Standard IR1: Collecting
information for costing purposes to support accurate and consistent costing.
We recognise that organisations will need time to set up systems for the
collection of additional patient-level information for costing.
29
See Standard CP3: Appropriate cost allocation methods for further information on relative weight values.
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34 | > IR2: Managing information for costing
What you need to implement this standard
• Costing principle 1: Good costing should be based on high quality data that
supports confidence in the results
• Costing principle 4: Good costing should involve transparent processes that
allow detailed analysis
• Spreadsheet IR2.1: Data sources available as part of national collection
• Spreadsheet IR2.2: Patient-level feeds log
• Costing manual template – showing how to record and monitor your
patient-level activity feed set up, progress and regular feeds.
Approach
Using information in costing
29. Costing is a continuous process, not a one-off exercise for a national
collection.
30. If your organisation has its own cost data for internal decision-making that is
available quarterly or monthly, you may only need to run the patient-level
costing process once a year for the national collections.
31. If your organisation has no other form of cost data, run our patient-level
costing process quarterly as a minimum; although we recommend running it
monthly as best practice.30
32. The benefits of frequent calculation of costs are:31
• effects of changes in practice or demand are seen and you can respond to
them while they are still relevant
• internal reporting remains up to date
• mistakes can be identified and rectified early.
33. A first cut of the patient-level activity feeds (APC and NAPC) from the PAS will
generally be available for costing by the fifth day of each month (referred to as
day 5 in Table IR2.1).
30
See The costing principles. 31
The benefits of real-time data can be found at: www.gov.uk/government/publications/nhs-e-procurement-strategy
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35 | > IR2: Managing information for costing
Figure IR2.1: Making data available for costing
34. Some organisations will also have updates to this first feed – for example, by
the 20th day of each month (referred to as day 20 in Table IR2.1). You should
assess whether that update provides material changes to the data for costing;
if it does include the update in the costing process.
35. Depending on the costing software and by agreement with the informatics
team, you can either load these patient-level feeds into your costing system:
• the following month or
• to a locally agreed timetable in month.32
32
It may be best to update in month at the end of a target costing period – for example, when a national submission is due – as this will mean the costed information is as accurate as possible.
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36. The update should add new records to, amend any existing records in and
remove any erroneous records from the PAS by data quality processes in
month. The method chosen should be documented in your costing manual
(Worksheet 2: Timing of activity feeds).
37. All other patient-level feeds should be submitted to the costing team according
to a locally agreed timetable each month so that the costing process can
begin promptly. You may need to be flexible about when some departments
provide their patient-level feed – but late submission should be the exception
rather than the rule. This should be agreed with the service and informatics
departments, and clearly documented to support good governance.
38. You should use the most complete information you have in the costing
process. This will mean that if your organisation reports monthly on patient-
level costing, you can meet your local reporting timetable, and appropriate
cost information will be available to support local decision-making.
39. You may find it useful to represent the agreed dates for the monthly cycle of
data receipts in a timeline diagram (see Figure IR2.2).
Figure IR2.2: Example timeline for when data should be available in the
monthly cycle
Note: In this example, some parts of the costing cycle may start at day 5 –
depending on the software used; some feeds are updated at a later date.
40. You should not delay starting the costing process waiting for late datasets to
arrive: many tasks can be accomplished even when data items are
outstanding. However, you should consider what the reasonable cut-off date is
for late data, to ensure most patient-level activity can be costed appropriately.
Day 5 : Patient-level APC/NAPC
data feeds available
Day 7: Medicines data feed received
Day 9: ECT suite data received
Final costing process begins
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In-month or year-to-date feeds?
41. You should consider carefully the period for which data is loaded – in-month
or cumulative year-to-date, basing your decision on the approach and
frequency of the costing process and your organisation’s reporting
requirements. Loading data monthly is easier as the number of records is
much smaller.
42. It is important that the costing system is configured to recognise whether a
load is in-month or year-to-date; otherwise it may not load some of the activity.
43. To ensure the costing system is loading everything, you should follow the
guidance in Standard CP5: Reconciliation (paragraphs 10 to 12) and use the
patient event activity reconciliation reports as described in Spreadsheet
CP5.2.1. This will allow you to check the number of patient records in the feed
against the number of lines loaded into the costing system.
Descriptions and codes used in the feeds
44. Databases use the descriptions and codes provided when they were set up.
Over time these descriptions and codes may change, become obsolete or be
added to. For example, feed A may record a specialty as psychology and feed
B as clinical psychology; if these are the same department, this needs to be
identified and recorded in a mapping table, so they are not treated as separate
things in the costing process.
Logging patient-level activity feeds
45. Use Spreadsheet IR2.2 to keep a log of patient-level activity feeds. Table
IR2.1 below shows an example log of patient-level feeds.
Refreshing information used for costing
46. Note the difference between a refresh and a year-to-date feed. A year-to-date
feed is an accumulation of in-month reports (unless the informatics team has
specified otherwise). A refresh is a rerun of queries or reports by the
providing department to pick up any late inputs. The refreshed dataset
includes all the original data records whether amended or not, plus late
entries.
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38 | > IR2: Managing information for costing
47. You need to refresh the data because services will continue to record activity
on systems after the official closing dates. For the best costing information,
the late data still needs to be costed. The refreshed information picks up these
late entries, which may be numerous.
48. Get a refresh of all the patient-level activity from the relevant department/team
or the informatics department to an agreed timetable. For example, the
informatics department can build PLICS feeds from the MHSDS it prepares for
submission to NHS Digital. This will ensure that nationally available data
matches the activity information costed locally.
49. A challenge for costing teams is that changes caused by the refreshes can
alter the comparative figures in service-line reports. With the help of the
relevant service’s management accountant leads, you need to explain
significant changes to users of the service-line reports, highlighting the impact
of late inputs to the department providing the patient-level activity feed.
Information used in the costing system for calculations
50. You need to specify in the costing system whether or not values in the patient-
level feeds can be used in calculations. If inconsistent measures are used
across the records – for example, if the medicine feed’s quantity column
records number of tablets, number of boxes or millilitres dispensed in different
records – the costing system will need to ignore these quantities in the feed.
51. If the costing system uses information from a feed to calculate durations – for
example, length of stay in hours – it will need to know which columns to use in
the calculation. If the durations have already been calculated and included in
the feed, the costing system will need to know which column to use in
allocating costs.
52. Some medicines dispensed patient-level feeds (Feed 10) include the cost.
The standards call this a traceable cost. You will need to instruct the costing
system to use this cost as a relative weight value or actual cost in the costing
process.33
33
See Standard CP3: Appropriate cost allocation methods for more details on relative value units.
39 | > IR2: Managing information for costing
Table IR2.1: Example of a patient-level feeds log
Feed number
Feeds In-month/ year-to-date
Data source
Department Named person/ deputy
Format Time period
Working day data received
Number of records received
1 Admitted patient care – day 5
In-month PAS informatics department
Informatics XXX/XXX CSV In-month activity
5 XXX
1 Admitted patient care – day 20
In-month PAS informatics department
Informatics XXX/XXX CSV In-month activity
20 XXX
2 Non-admitted patient care – day 5
In-month PAS informatics department
Informatics XXX/XXX CSV In-month activity
5 XXX
2 Non-admitted patient care – day 20
In-month PAS informatics department
Informatics XXX/XXX CSV In-month activity
20 XXX
10 Medicines dispensed
In-month XXX Pharmacy XXX/XXX CSV In-month activity
5 XXX
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40 | > IR2: Managing information for costing
53. Once you decide the calculation method, keep a record for each patient feed.
Table IR2.2 shows an example of a log recording important details of the
patient-level activity feeds. The template for this log is included in
Spreadsheet IR2.3.
Table IR2.2: Log showing how the costing system uses patient-level activity feeds
Feeds Detail Column to use in costing
1 Admitted patient care 1 line = 1 discrete stay on a specific ward
Duration of stay in hours
2 Non-admitted patient care 1 line = 1 attendance Duration in minutes
3 Medicines dispensed 1 line = 1 issue Total drug cost
Supporting your organisation in improving data quality for costing and managing data quality issues in the short term
Data quality checks for information to be used in costing
54. You need to quality check information that is to be used for costing by
following a three-step process:
1. Review the source data: identify any deficiencies in the feed, including
file format, incomplete data, missing values, incorrect values, insufficient
detail, inconsistent values, outliers and duplicates.
2. Cleanse the source data: remedy/fix the identified deficiencies. Take
care when cleansing data to follow consistent rules and log your
alterations. Create a ‘before’ and ‘after’ copy of the data feed. Applying
the duration caps (see below) is part of this step. Always report data
quality issues to the department supplying the source data so they can
be addressed for future processes. Keep data amendments to the
minimum, only making them when fully justified and documenting them
clearly.
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41 | > IR2: Managing information for costing
3. Validate the source data: you need a system that checks the cleansed
and correct data is suitable for loading into the costing system. This may
be part of the costing system itself. Check that the cleansing measures
have resolved or minimised the data quality issues identified in step 1; if
they have not, either repeat step 2 or request higher quality data from the
informatics team.
55. Consider automating the quality check to reduce human errors and varied
formats. Automatic validation – either via an ETL (extract, transform, load)
function of the costing software or a self-built process – can save time. But
take care that the process tolerates differences in input data and if it does not,
that this data is consistent. Without this precaution you risk spending
disproportionate time fixing the automation.
56. Your organisation should continuously improve data quality for audit purposes.
Request changes from the source team/department or informatics team, then
review the revised data for areas to improve. Set up a formal process to guide
these data quality improvement measures and ensure those most useful to
costing are prioritised. Figure IR2.3 shows the process.
Use of duration caps
57. A duration cap rounds outlier values up or down to bring them within accepted
perimeters. Review the feeds to decide where to apply duration caps and build
them into the costing system.
58. You can apply a cap to reduce outliers, eg an appointment/contact in a NAPC
setting that has not been closed. Applying duration caps removes the
distraction of unreasonable unit costs when sharing costing information.
59. Capped data needs to be reported as part of the data quality check. The caps
need to be clinically appropriate and signed off by the relevant service.
60. While caps moderate or even remove outlier values, studying these outliers (ie
unexpected deviations) is informative from a quality assurance point of view.
You should record the caps used and work with the informatics department
and the department responsible for the data feed to improve the data quality
and reduce the need for duration caps over time.
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42 | > IR2: Managing information for costing
Figure IR2.3: Establishing data quality improvement measures
61. Table IR2.3 shows examples of duration caps that should be used as a default
in the absence of better local assumptions.
Table IR2.3: Examples of duration caps
Feed number
Feed name Duration in minutes
Replace with (minutes)
2 Non-admitted patient care ≤4 5
2 Non-admitted patient care >180 180
1 Admitted patient care ≤4 5
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43 | > IR2: Managing information for costing
Recalled items on patient-level activity feeds
62. Take care with patient-level activity feeds in case they contain negative values
due to products being returned to the department – for example, the medicines
dispensed feed containing both the dispensations and the returned drugs for a
patient.34 These dispensations and returns are not always netted off within the
department’s database, so both the dispensations and the returns will appear
in the feed. If this is the case, you need to net off the quantities and costs to
ensure only what is used is costed.
34
For further guidance on ensuring the quality of the medicines dispensed feed, see Standard CM10: Pharmacy and medicines.
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44 | > Costing processes
Costing processes
CP1: Role of the general ledger in costing
CP2: Clearly identifiable costs
CP3: Appropriate cost allocation methods
CP4: Matching costed activities to patients
CP5: Reconciliation
CP6: Assurance of costing data (new for 2017/18)
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45 | > CP1: Role of the general ledger in costing
CP1: Role of the general ledger in costing
Purpose: To set out how the general ledger is used for costing, and to highlight the areas which require review to support accurate costing.
Objective
1. To ensure the correct quantum of cost is available for costing.
Scope
2. This standard should be applied to all lines of the general ledger.
Overview
3. You need the income and expenditure for costing. We refer to this as the
‘general ledger output’. This output needs to be at cost centre and expense35
code level, and is a snapshot of the general ledger. You do not require
balance sheet items for costing.
4. You must include all expenditure and income in the general ledger output,
which must reconcile with the financial position reported by your board and in
the final audited accounts.
5. The general ledger is closed down at the end of the period, after which it
cannot be revised.36 For example, if in March you discover an error in the
previous January’s ledger that needs to be corrected, you can only make the
correction in March’s ledger. Doing so will correct the year-to-date position,
even though the January and March figures do not represent the true cost at
35
Expense codes may also be called ‘account codes’ or ‘subjective codes’ in your general ledger. 36
Some systems may allow you to back post payroll journals; and other changes may be made during the external audit process.
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46 | > CP1: Role of the general ledger in costing
those times, as one will be overstated and the other understated. Check with
the finance team to ensure any such changes are brought into the PLICS.
6. The timing of when some costs are reported in the general ledger may pose a
challenge for costing. For example, overtime pay for a particular month may
be posted in the general ledger in the month it was paid, not the month the
overtime was worked. This highlights a limitation in the time-reporting and
expense payment system. We recognise this limitation, but are not currently
proposing a work-around for it.
7. Discuss the general ledger’s layout and structure with the finance team so that
you understand it. This will help you understand the composition of the costing
output.
What you need to implement this standard
• Costing principle 2: Good costing should include all costs for an
organisation and produce reliable and comparable results37
• Spreadsheet CP1.1: General ledger output required fields
Approach
Obtaining the general ledger output
8. The finance team should tell you when the general ledger has been closed for
the period and give you details of any off-ledger adjustments for the period.
You need to put these adjustments into your cost ledger, especially if they are
included in your organisation’s report of its financial position, as you will need
to reconcile to this.
9. Keep a record of all these adjustments in the costing manual (Worksheet 7.3:
Log of adjustments to the general ledger at each load), to reconcile back to
the general ledger output. Take care to ensure that any manual adjustments
are mapped to the correct line in the cost ledger.
10. See Spreadsheet CP1.1 for what the extract of the general ledger output must
include.
37
See The costing principles. These are applicable to all sectors.
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47 | > CP1: Role of the general ledger in costing
11. Ensure the process for extracting the general ledger output is documented in
your costing manual (Worksheet 6: Process to extract general ledger output).
You should extract this once the finance team has told you it has closed the
general ledger for the period.
12. The finance team should tell you when it has set up new cost centres and
expense codes in the general ledger, and when there are material movements
in costs or income between expense codes or cost centres. One way to do
this is by a general ledger changes form that is circulated to all the appropriate
teams including costing. Cross-team approval increases the different teams’
understanding of how any changes affect them.
13. Finance should not rename, merge or use existing cost centres for something
else without informing you as this causes problems. Finance teams should
close a cost centre and set up a new one rather than renaming it.
14. The new general ledger cost centres and expense codes need to be mapped
to the cost ledger. You then need to reflect these changes in the costing
system.
15. ‘Dump’38 ledger codes need to be addressed so that all costs can be assigned
to patients accurately. Work with your finance colleagues to determine what
these ‘dump’ codes contain so they are mapped to the correct lines in the cost
ledger.
16. You should have a rolling programme in place to regularly meet with your
finance colleagues to review the general ledger and its role in costing. This
identifies problems and enhances their engagement with the use of the data.
38
Various terms can be used across different organisations for dump ledger codes. For example, they can also be referred to as error suspense codes and holding ledger codes.
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48 | > CP2: Clearly identifiable costs
CP2: Clearly identifiable costs
Purpose: To ensure costs are in the correct starting position for costing.
Objectives
1. To ensure all costs are in the correct starting position and correctly labelled for
the costing process.
2. To ensure the same costs are mapped to the same resources.
3. To ensure all costs are classified in a consistent way.
4. To ensure income is not netted off against costs.
Scope
5. This standard should be applied to all lines of the general ledger.
Overview
6. The general ledger is set up to meet the provider’s financial management
needs rather than those of costing. Therefore some costs included in it will
have to be transferred to other ledger codes, or aggregated or disaggregated
in the cost ledger to ensure the costs are in the right starting position for
costing.
7. Feedback from those who use the national cost datasets is that the
inconsistency in how costs are labelled limits meaningful analysis.
8. To ensure the accuracy of cost data, the costs at the beginning of the process
need to be in the right place with the right label.
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9. This is one of the reasons we have introduced our standardised cost ledger,
which is a guide for mapping expenses to cost ledger categorisations. This is
shown in Spreadsheet CP2.1. This facilitates an in-depth investigation of the
general ledger to understand the costs contained in it; and provides a
mechanism to get the costs into the right starting position with the right label.
This is important so the correct cost allocation method can be applied to the
cost, and the process can be audited effectively.
10. The standardised cost ledger covers all sectors, to enable integrated providers
to work from one document. You can use column N – ‘Likely sector’ – in
Spreadsheet CP2.1 to suggest rows that are relevant, and set up your own
customised list in column O – ‘My organisation’.39
Classification of costs
11. The standardised cost ledger classifies costs at both the cost centre and
expense code level –combining the two into the ‘costing account code’ level
(see Figure CP2.1 below).
Figure CP2.1: The costing account code
12. The costing account code identifies whether the costs contained there are
patient facing or support:40
• Patient-facing costs are those that relate directly to delivering patient care
and are driven by patient activity. They should have a clear activity-based
allocation method, and may include both pay and non-pay costs. These
39
Note PLICS collection resources are not included for ‘acute’ in the Healthcare costing standards for England – mental health. If you require further information, please contact the NHS Improvement costing team at [email protected]
40 See column C in Spreadsheet CP2.1 for how cost centres and costing account codes are
classified.
Cost centre
Expense code
Costing account
code
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50 | > CP2: Clearly identifiable costs
costs sit in their own costing account code in the cost ledger and use
resources and activities in the costing process.
• Support costs do not directly relate to delivering patient care. Many relate
to running the organisation (eg board costs, HR, finance, estates). Other
support costs may be at service level, such as ward clerks and service
management costs.
13. To help the costing process, support costs have been classified as type 1 and
type 2 to clearly delineate the type of activity that drives them:
• Type 1 support costs are support costs that have no direct relationship to
patient care, eg finance and HR costs.41
• Type 2 support costs have some relationship to patient care activity
volumes. For example, interpreting costs will vary in relation to the patient
activity. Type 2 support costs are allocated to the patient using an activity-
based method. These costs sit in their own costing account code in the cost
ledger and use resources and activities in the costing process.
14. The nature of the cost determines the classification, not the allocation method.
At times the standards apply patient-facing or type 2 cost allocation methods
to a type 1 cost as this is believed to be a more accurate way to allocate out
this cost.
15. Some providers may have sophisticated data systems allowing them to
allocate a type 1 support cost using an activity-based method, but this does
not change the classification of this cost to patient-facing or type 2 support.
16. For national reporting, all providers are expected to use the national PLICS
terminology. However, we understand there are other cost classifications that
providers use for local reporting purposes. The standards do not provide
guidance on these classification types.
Income
17. To maintain transparency in the costing process, income should not be netted
off from the costs. The only exceptions to this rule are:
41
Traditionally, this type of cost is known as ‘overheads’, ‘corporate overheads’ ‘true overheads’ or similar.
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51 | > CP2: Clearly identifiable costs
a. Income received for clinical excellence awards can be netted off the
consultant’s salary cost.
b. Where 100% of an individual care professional’s costs are reported in
the provider’s general ledger but they spend part (or all) of their time with
patients at another provider.42 For example, a psychiatrist provides a
liaison service at an acute hospital and this is part of the acute hospital
activity. Your organisation will normally invoice another organisation for
this. The income received for this activity at another provider can be
netted off the care professional’s pay costs to avoid inflating the cost per
minute of the provider’s own-patient activity. It is important to determine
whether the recharged value includes overhead recovery, as netting this
additional overhead income off staff costs would understate the
remaining resource cost.
c. Where the materiality principle applies – so for very small value contracts
or service-level agreements there is no need to determine the associated
costs.
Salary recharges
18. These are described as ‘pay recharge to’ and ‘pay recharge from’ in the
standardised cost ledger. Pay recharges can be classified as either clinical or
non-clinical in the cost ledger.
19. In line with paragraph 17b above, a ‘pay recharge to’ is where you invoice
another trust for an element of someone’s salary, without including any
service element for support costs or surplus (this may be included in the gross
recharge). This needs to be netted off against their actual salary so that 100%
of cost is not allocated to, for example, 50% of activity. The ‘pay recharge to’
needs to be moved to the cost ledger line for the individual and netted off;
whether non-clinical or clinical.
20. The ‘pay charge from’ needs to move to the cost centre that is paying for the
activity so the pay costs can be allocated to the activity.
42
Some NHS organisations call these arrangements ‘operating partnership agreements’.
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52 | > CP2: Clearly identifiable costs
Commercial activities
21. Activities where there are costs and income, such as providing staff meals,
should be reported in line with Standard CP5: Reconciliation and Standard
CM8: Other activities under the ‘other activities’ cost group. This is so that a
provider’s income generating activities do not inflate or deflate the cost of
own-patient care.
22. Where income is generated but the associated costs are difficult to identify,
such as car parking, you will need to make a sensible assumption about the
costs involved after discussion with the appropriate teams. Report the costs
and income under ‘other activities’.
Expenditure and activity recorded in different organisations
23. Where your organisation holds the expenditure budget but does not record the
activity, the costs should be reported under the ‘reconciliation items’ cost
group.
24. If your organisation is taking part in a national pilot or other such scheme,
where activity is recorded but all expenditure is provided by the project, you
should treat this activity as ‘other activities’ and report it under the ‘other
activities’ cost group until (or if) the pilot becomes business as usual.
What you need to implement this standard
• Costing principle 2: Good costing should include all costs for an
organisation and produce reliable and comparable results
• Costing principle 3: Good costing should show the relationship between
activities and resources consumed
• Costing principle 4: Good costing should involve transparent processes that
allow detailed analysis
• Costing principle 5: Good costing should focus on materiality
• Spreadsheet CP2.1: Standardised cost ledger (with mapping to resources)
• Spreadsheet CP2.2: Type 1 support costs allocation methods
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Approach
25. Before proceeding, review the spreadsheet costing diagram. This is a high
level visual aid to the costing process described in these steps.
26. We describe the process in steps to help you understand it. In reality these
steps may happen simultaneously in the costing system.
27. The initial setting up of your PLICS is a one-off exercise, but the interface
between your general ledger set up and the standardised cost ledger should
be understood and reviewed regularly to keep it up to date. This regular
process will also allow you to refine and improve the PLICS over time.
28. There will be various software solutions to deliver the costing process. We are
not prescribing the software solutions.
Setting up the costing process in your costing system
29. The costing process described in the standards has been designed to be
linear in approach, with each element mapping to the next in a standardised
and consistent way, as shown in Figure CP2.2.
30. There are three elements:
• analysing your general ledger and understanding how costs need to be
disaggregated to ensure they are costed properly, or where they need to
move to, to ensure they have the right label and are in the right starting
position
• using the information from this analysis to inform the processing rules in
your costing system
• having the prepopulated cost ledger in your costing system, so when you
load your general ledger output, it uses the information informing the
processing rules to move costs to the right line in the cost ledger.
Figure CP2.2: Mapping the costing process components
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54 | > CP2: Clearly identifiable costs
31. Mapping from the general ledger to the cost ledger is achieved by following
step 0 described below.
32. The mapping of each costing account code from the cost ledger to the
resources43 that indicate the prescribed cost allocation method to use is
provided for you in columns I to K in Spreadsheet CP2.1; and mapping from
these resources to the collections resources44 is provided for you in columns L
and M in Spreadsheet CP2.1.45
33. To help you identify where to prioritise analysis, use our cost ledger auto-
mapper application. This will analyse the naming conventions in your general
ledger based on expense codes and identify an appropriate line in the
standardised cost ledger.46
34. The cost ledger, resources and collections resources – with their coding
structure and the mapping between these elements – will be prepopulated in
your costing system. If these mappings change we will provide the information
to update your costing system.
35. However depending on what costing system you use,47 costing may take
place at a lower level than the resources shown in column B of Spreadsheet
CP3.1. Your system may use cost items, local resources or another
classification or grouping of costs. You can continue using this method in your
costing system, but be aware that it adds an additional mapping exercise to
your set up.
36. The cost allocation methods prescribed in the technical document take into
account that costing may happen at a lower level than the resource
description.
43
Resources are what the provider purchases to help deliver the service. A resource may be a care provider, equipment or a consumable.
44 ‘Collection resources’ is the group of resources used for the national submission. These resources
are not the same as the resources used in the costing process. 45
We appreciate that in this version of the standards additional cost centre mappings may need to be added to Spreadsheet CP2.1. We will review and update the technical document during the implementation process where appropriate. Please send suggestions for additional cost centres to [email protected]
46 The general ledger to cost ledger auto-mapper application is available as part of the early
implementer support package. If you have not volunteered to be an early implementer, the application is available on request from [email protected]
47 Or the work you have already performed for previous or local costing exercises,
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55 | > CP2: Clearly identifiable costs
37. In Figure CP2.2 above the only mapping exercise you need to undertake is
mapping your general ledger to the cost ledger as described in step 0 below.
38. If you use additional mappings you will need to do two mapping processes. If
you use a local resource in your costing process, you will need to map your
cost ledger to your local resource, then your local resource to the resource
that prescribes the allocation method. Figure CP2.3 below describes the
mapping costing process with the additional component of a local resource.
39. The mapping process will still need to be linear to maintain standardisation
and consistency. You must document your mapping assumptions in your
costing manual (Worksheet 10.2: Local resource mapping).
Figure CP2.3: Mapping the costing process components with the inclusion of a local resource
40. Do not treat these mapping exercises as separate entities. It is important to
ensure everyone is putting the same costs in the same place, to maintain the
linear mapping.
41. Figure CP2.4 is an example of how not to approach the mapping exercises.
Figure CP2.4: How not to map to the costing process elements
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56 | > CP2: Clearly identifiable costs
The costing process
Step 0: Analyse your general ledger to get your costs in the right starting position with the right label48
42. For the cost data to be credible we need to ensure everyone is putting the
same costs in the same place before the costing process begins.
43. To achieve this, before the costing process can start, you need to ensure all
the costs recorded in the general ledger are in the right starting position and
have the right label.
Step 0.1: Map the general ledger to the cost ledger using the standardised cost ledger algorithm
44. Use the standardised cost ledger columns A to F in Spreadsheet CP2.1 to
ensure all your costs are in the right starting position and have the right label
for the costing process.
45. Use the information from your in-depth investigation of your general ledger to
inform the processing rules in your costing system. Your organisation may use
sub-analysis codes that give a finer separation of costs. Understand these
codes and use them if available to ensure your general ledger to cost ledger
mapping is informed by them.
46. You will not be able to analyse each line of the general ledger in depth the first
time you do this exercise, but over time – with good communication between
you and your finance colleagues – this can be refined, starting with where the
largest values are involved.
47. Columns I and J in the standardised cost ledger contain the mapping to the
resources that, with the prescribed activity, identifies the prescribed cost
allocation to use. This means that everyone will treat the same cost in the
same way, so that variation in activity costs will not be due to variations in the
costing process.
48. Mapping from the standardised cost ledger in your costing system to the
resources ensures that everyone classifies the same costs in the same way.
48
This is step 0 as it is not part of the monthly costing process.
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57 | > CP2: Clearly identifiable costs
This means that when you compare activity costs you are comparing ‘apples
with apples’.
49. To help prioritise your analysis, use our cost ledger auto-mapper application49.
This will analyse your general ledger’s naming conventions for expense codes
and identify an appropriate line in the standardised cost ledger Spreadsheet
CP2.1 to map to.
50. Where the cost ledger auto-mapper application algorithm (or the standardised
cost ledger spreadsheet shown in full in Spreadsheet CP2.1) cannot identify
an appropriate line in the cost ledger, you will need to analyse the general
ledger line, identify what cost sits there and map it to the appropriate line in
the cost ledger
51. Analysis of your general ledger will help you understand how costs are
recorded in it and what steps you need to take to get the costs in the right
starting position with the right label. This will include disaggregating costs that
need to be mapped as different resources, or where the labels on the general
ledger do not correspond to the costs recorded on that line in the general
ledger.
Step 0.2: Disaggregation of necessary general ledger codes
52. Figure CP2.5 shows an example of the disaggregation you may need to do to.
You may have a therapies cost centre in your general ledger and on an
expense line called ‘band 6’ you may have occupational therapists and art
therapists. The costs for the occupational therapists and the art therapists
need to go to different resources, so must be disaggregated. You can use
relative weight values50 to determine the apportionment of costs between the
two appropriate lines in the standardised cost ledger.
49
The general ledger to cost ledger auto-mapper application is available as part of the early implementer support package. If you have not volunteered to be an early implementer, the application is available on request from [email protected]
50 See Standard CP3: Cost allocations for more detail on relative weight values.
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Figure CP2.5: Example of disaggregation between the general ledger and the cost ledger
53. Although this mapping process is largely a one-off exercise, you need a rolling
programme for analysing your general ledger over time to ensure that costs in
the cost ledger continue to be in the right starting position with the right label.
Review all mapping regularly, at least annually, to ensure all changes or
additions to the general ledger are understood and included in the cost ledger.
Step 1: Load your general ledger output into your costing system
54. The general ledger output must be transformed into the cost ledger within the
costing system to ensure that any changes can be traced and reconciled to
the provider’s general ledger.51
55. The cost ledger template should be prepopulated in your costing system. This
means that when you load your general ledger input into your costing system
in step 1, it will use the information from your analysis of the general ledger in
step 0 to move those costs against the appropriate line in the cost ledger.
51
If you are attempting to adopt the standards before purchasing a compliant software product, please ensure that your process for mapping is robust, transparent and documented. All PLICS costing software used in NHS organisations should comply with the minimum software requirements.
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59 | > CP2: Clearly identifiable costs
56. This means you will have the right costs in the right starting position
with the right label ready for the costing process to begin.
Step 2.1: Allocating support costs
57. Once the PLICS has received your general ledger output, it can process the
data to allocate type 1 support costs to the patient-facing costs and type 2
support costs, as well as to any other type 1 support costs that have used
them (eg finance using HR and vice versa). The methods used are illustrated
in Figure CP2.6.
58. All52 type 1 support costs have been mapped to an allocation method in
Spreadsheet CP2.2.
Figure CP2.6: Extract from the spreadsheet costing diagram in the technical document showing step 2.1: Allocating support costs
Cost
ledger
Patient- facing
cost centres
Support
costs
Type 1 support
cost centres
Type 2 support
cost centres
Support cost centre
Line 1: SC type 2
Line 2: SC type 2
...
Patient-facing cost centre
Line 1: PF
Line 2: PF
...
Cost allocation
methods
Cost allocation
methods
General
ledgerReciprocal
allocation
process
52
In this version of the standards, we appreciate that additional support cost mappings may need to be added to Spreadsheets CP2.1 and CP2.2. We will review and update the technical document during the implementation process where appropriate. Please send suggestions for additional cost centres to [email protected]
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Centrally held and devolved type 1 support costs
59. It is important to identify whether a type 1 support cost is centrally held or has
already been devolved to the relevant cost centres in the cost ledger. For
example, are the computer hardware costs for clinical areas
• held in a ‘central’ place in your general ledger or
• purchased to a central code, but then recharged monthly to the service that
used them (devolved) or
• in the ward budgets to begin with (devolved)?
60. This is because the standards describe allocating type 1 support costs as a
two-step process of:
1. apportioning type 1 support costs to other cost centres that use them
2. getting those type1 support costs in the right place in the cost centre that
uses them, to be assigned to patient-facing or support resources for the
costing process to start.
61. The standards describe it this way to make the costing process transparent.
62. To help with this, column G in Spreadsheet CP2.1 states whether a cost is
centrally held or is a devolved type 1 support cost in the cost ledger.
63. The cost allocation methods prescribed for centrally held type 1 support costs
(identified with a C in column G in Spreadsheet CP2.1) are given in step 1 in
column G in Spreadsheet CP2.2.
64. If the type 1 support cost has already been devolved in the cost ledger
(identified with a D in column G in Spreadsheet CP2.1), you do not need
to do step 1 in Spreadsheet CP2.2 and can move directly to step 2.
Examples of type 1 support costs devolved to the cost centres that use them
65. Some type 1 support costs will already be reported in patient-facing cost
centres such as ward clerks on a ward on a ward. Therefore these costs do
not need to be moved.
66. Other type 1 supports costs – such as security in a high secure ward – may
have already been devolved in the general ledger, based on an internal
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recharge in the general ledger. There is no need to repeat this step, providing
the prescribed costing allocation method has been used.
67. Type 2 support costs, such as interpreting, should sit in their own cost centres
in the standardised cost ledger, as these have specific activity-driven
allocation methods specified in columns F and G in Spreadsheet CP3.3.
68. If you are using a type 2 support cost allocation method (that is, an activity-
based method) to allocate out a cost we have classified as a type 1, continue
to do this and document it in your costing manual (Worksheet 11: Superior
costing methods). We have adopted this scenario as a superior method in
Spreadsheet CP3.5.
Reciprocal costing
69. This step includes the reallocation of type 1 support costs between each
other. You should do this using a reciprocal allocation method, which allows
all corporate support service costs to be allocated to, and received from, other
corporate support services.
70. Reciprocal costing must take place within the costing system.
71. Type 1 support costs should not be allocated using a hierarchical method as
this only allows cost to be allocated in one direction between corporate
support services.53
72. A reciprocal allocation method accurately reflects the interactions between
supporting departments and therefore provides more accurate results than a
hierarchical approach.
Step 2.2: Apportioning type 1 support costs in patient-facing and type 2 support cost centres
73. Within the costing system, you should apportion type 1 support costs over the
patient-facing and support cost type 2 expense lines within the cost centre,
based on the allocation methods in column E in Spreadsheet CP2.2 (see
Figure CP2.7 below).
53
Providers using this method of allocation should adopt the reciprocal method as soon as possible. This can be done in conjunction with purchase or review of current costing software.
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Figure CP2.7: Extract from the spreadsheet costing diagram in the technical document showing step 2.2
ResourcesPatient-facing cost centre
After SC type 1 moved in
Support cost centre
After SC type 1 moved in
Support cost centre
Line 1: SC type 2
Line 2: SC type 2
...
Patient-facing cost centre
Line 1: PF
Line 2: PF
...Patient- facing resource
Support resource
LIne1: SC type 2
LIne2: SC type 2
LIne3: SC type 1
Cost allocation
methods
LIne1: PF
LIne2: PF
LIne3: SC type 1
Cost allocation
methods
74. At this point, patient-facing costs and type 2 supports costs, with their
allocated portion of type 1 support costs, are mapped to resources. Table
CP2.1 describes a high level example of this:
Table CP2.1: Example of costs within a patient facing resource
Resource name
Patient-facing cost
Type 1 support cost
Total resource cost for the costing process
CMHT nurse X Y XY
Psychiatry consultant (community service)
XX Y XXY
How to treat type 1 support costs in type 2 support cost centres
75. All type 1 support costs in type 2 cost centres have been mapped to the type 2
support cost allocation method and should use the prescribed allocation
method in column G of Spreadsheet CP2.2.54
54
The instruction in column G refers you to the relevant type 2 support cost allocation method in Spreadsheet CP3.4.
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76. This is because type 2 support cost centres all map to the same resource and
use the same allocation method.
77. Taking an extra step to allocate type 1 costs over the type 2 expense lines will
not produce a different result, so is unnecessary.
78. However, we must stress that the information in Table CP2.1 will still need to
be available if you allocate type 1 support costs in type 2 support cost centres
straight to the support cost resource.
How to treat type 1 support costs in patient-facing cost centres
79. You do not need to allocate type 1 support costs over the patient-facing
expense lines if:
• all the lines in the patient-facing map to the same resource and
• you are using an average cost per minute to allocate that resource.
80. Taking an extra step to allocate type 1 costs over the patient-facing expense
lines will not produce a different result, so is unnecessary.
81. The prescribed allocation methods to allocate type 1 support costs to patient-
facing cost centres and straight to the patient-facing resource are given in
column H of Spreadsheet 2.2.
82. However, we must stress that the information in Table CP2.1 will still need to
be available if you allocate type 1 support costs to patient-facing cost centres
and straight to the patient facing resource.
83. Where the standards state you should allocate the actual staffing costs
to their named activity for consultant medical staffing, you will need to
allocate the type 1 support costs over the patient-facing expense lines.
Otherwise individual staff members will not get their correct amount of
type 1 support costs.
84. If the lines in the patient-facing cost centre are mapped to different
resources, you will need to allocate the type 1 support costs over the
individual expense lines. Otherwise the different resources will not get
their correct amount of type 1 support costs.
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85. To do this, use the prescribed allocation methods in column I of Spreadsheet
CP2.2.
Things to consider when following this method
86. Under an expenditure-based allocation method, some areas of the ledger may
get a larger proportion of the allocated type 1 support costs because of
specific high-cost items, such as drugs. If so, investigate the type 1 support
cost allocation and use a more appropriate one.
Negative costs in the cost ledger
87. Negative costs arise for various reasons, such as a journal moving more cost
than is actually in the expense code. You should include all costs, including
negative costs, in the costing process to enable a full reconciliation to the
organisation’s accounts.
88. With the wider finance team, you need to consider the materiality of each cost
centre’s negative costs and expense code combination. If the negative value
is sufficiently material, you may want to treat it as a reconciliation item,
depending on the materiality and timing of the negative costs. The main
questions to ask before deciding are:
• What negative costs are there?
• Are they distorting the real costs of providing a service?
• Are they material?
• Do they relate to commercial activities?55
89. You need to investigate with the wider finance team why negative cost
balances have arisen. Several issues can cause negative values in the
general ledger to be carried into the cost ledger. We describe these below,
with suggested solutions.
• Miscoding: Actual expenditure and accruals costs are not matched to the
same cost centre and expense code combination. Ideally, the responsible
finance team rectifies such anomalies to give the costing team a clean
55
If yes, then the negative value may be a ‘profit’ element to the service provided. This profit should be treated as a reconciliation item.
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general ledger output; if not, you should make these adjustments in the cost
ledger.
• Value of journal exceeds value in the cost centre: If the value
transferred from the cost centre exceeds the value in the cost centre, this
will create a negative cost. Again ideally, the responsible finance team
rectifies such anomalies but if not, you should make these adjustments in
the cost ledger.
• Timing of accrual release: An inaccurate accrual release can result in a
negative cost value. When this happens, you must consider whether the
negative cost is material and whether its timing creates an issue. You may
need to report some negative costs caused by timing issues as a
reconciliation item.
90. Where the accrual is posted in the last month of the financial year and
released in the first month of the current year, this can result in an
overstatement in the previous year and understatement in the current year. To
resolve this, you may need to report the net over-accrual as a reconciliation
item to avoid understating the current-year costs. The same is true with an
equivalent misstatement for income.
91. Negative costs can be an issue because of traceable costs.56 If a particular
cost per patient or unit is known and allocated to an activity rather than used
as a relative weight value, and the total of the actual cost multiplied by the
number of activities is greater than the cost sitting in the costing accounting
code, it will create a negative cost.
92. Traceable costs should be used as a relative weight value. The only exception
is where the traceable cost is of a material value and using the actual cost as
a relative weight value will distort the final patient unit cost. If you do use the
actual cost you must ensure by doing this you do create a negative value in
the cost ledger.’
93. Negative costs may also be found in the cost ledger if, during the required
ledger movements, more cost is moved than is actually in the expense code.
To avoid this, you should use relative weight values or percentages to move
costs rather than actual values. For example, 50% of the pay costs rather than
a fixed amount. 56
For more information on traceable costs see Standard CP3: Appropriate cost allocation methods.
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94. Costs need to be shown in your local reporting dashboard in a way that allows
departments that provide clinical support services such as therapies and
services such as forensic services to see their own costs. Services need to
see all costs incurred in treating their patients, while clinical support services
need to see all costs incurred in delivering their care or support at a service
level. This information at service level is crucial as it allows clinical support
services to identify which services are their biggest consumers. Changes to
demand within services will affect the activity of clinical support services and
affect costs.
Advanced costing methods
95. Advanced allocation methods: If you are using a type 2 support cost
allocation method (that is, an activity-based method) to allocate a cost we
have classified as type 1, continue to do this and document it in your costing
manual (Worksheet 11: Superior costing methods). We have adopted this as a
superior method in Spreadsheet CP3.5.
96. Acuity/intensity: The allocation methods prescribed in this version of the
standards, in most cases, do not include a weighting for acuity or intensity. If
you are using a weighting for acuity or intensity with the prescribed allocation
method, continue to do this and record it in your costing manual (Worksheet
11: Superior costing methods). If you are not, you may wish to develop this
over time (subject to materiality principles). We have adopted this as a
superior method in Spreadsheet CP3.5.
Review of data after Step 2
97. At the end of the process for apportioning costs to patient-facing resources,
these resources will include both patient-facing and type 1 support costs, and
may also show some type 2 support costs. These resources are now ready to
be moved to patient level.
Identifying expected costs for high cost drugs or outsourced activity
98. Some drug costs – particularly those of newly released drugs or drugs in
clinical trials – may be significant but not yet identified at patient level in the
medicines feed. Costs for such drugs may skew the cost of some patient
groups, or be included within support costs.
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99. Work with the pharmacy or other relevant service team to understand where
such drug costs sit in the general ledger and if necessary, move material
values to an appropriate place to ensure the cost sits in the correct resource.
100. Outsourced activity – for example, capacity provided by a private mental
health hospital – can sit in the ledger where it appears to be a support cost.
Ensure such expected costs are understood and allocated to the correct
patient resource.
Audit of costing processes
101. It is essential to ensure the costing system reconciles at this stage; otherwise
further steps will not reconcile and may prove more complex to unravel. Refer
to Standard CP5: Reconciliation and Standard CP6: Assurance of costing
processes.
Note on clusters
102. The costing process is unaffected by how patients are classified into clusters.
The costing standards do not include guidance on how to do this or relate it to
costing.
PLICS collection requirements
Netting off other operating income
103. For the national cost collection, other operating income must be netted off
from the patient care costs. This includes education and training and research
income. Non-patient care costs must be allocated to patient care activity using
the standardised allocation methods or appropriate local allocation rules. We
are also collecting the costs for non-patient care activities as a memorandum
item in the reference cost workbook, to inform future decisions on the
treatment of non-patient care costs in the national collection. See the 2017/18
mental health development PLICS cost collection guidance for more
information.
Support costs
104. Type 1 and type 2 supports costs for the PLICS cost collection must be
mapped to the support cost collection resource and reported in the patient
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level extract. See Spreadsheet CP2.1 for the collection resource mapping. If
you have any questions, contact [email protected]
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CP3: Appropriate cost allocation methods
Purpose: To ensure that the correct quantum of costs is allocated to the correct activity using the most appropriate costing allocation method.
Objective
1. To ensure resources are allocated to activities using a single appropriate
method, ensuring consistency and comparability in collecting and reporting
cost information, and minimising subjectivity.
2. To ensure costs are allocated to activities using an appropriate information
source.
3. To ensure resources are allocated to activities in a way that reflects how care
is delivered to the patient.
4. To ensure relative weight values reflect how costs are incurred.
Scope
5. All costs reported in the cost ledger and all activities undertaken by the
organisation.
6. This standard covers relative weight values and how to identify and use
traceable costs in the organisation.
Overview
7. The standardised costing process using resources and activities aims to
capture cost information by reflecting how those costs are incurred.
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8. The costing process allocates resources to patients in two steps:
1. allocate resources to activities (explained in this standard)
2. match costed activities to the correct patient episode, attendance and
contact (explained in Standard CP4: Matching costed activities).
9. The allocation methods prescribed in the standards in most cases do not
include a relative weight value for acuity or intensity. If you are using a relative
weight value for acuity or intensity with the prescribed allocation method,
continue to do this and record it in your costing manual (Worksheet 11:
Superior costing methods).
What you need to implement this standard
• Costing principle 2: Good costing should include all costs for an
organisation and produce reliable and comparable results
• Costing principle 5: Good costing should focus on materiality
• Costing principle 6: Good costing should be consistent across services,
enabling cost comparison within and across organisations
• Spreadsheet CP3.1: Resources for patient-facing and type 2 support costs
• Spreadsheet CP3.2: Activities for patient-facing and type 2 support costs
• Spreadsheet CP3.3: Methods to allocate patient-facing resources, first to
activities and then to patients
• Spreadsheet CP3.4: Allocation methods to allocate type 2 support
resources, first to activities and then to patients
• Spreadsheet CP3.5: Superior costing methods
• Spreadsheet CP3.8: Ward round data specification
Approach
Resources
10. Resources are what the provider purchases to help deliver the service. A
resource may be a care professional, equipment or a consumable.
11. The costs within a resource may have different information sources and cost
drivers. For example, the patient-facing CMHT nurse resource could include
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the costs of nurses’ salaries and also support type 1 costs such as CMHT
service administrator costs, CMHT non-pay costs, HR and finance costs.
12. You should review the rows in Spreadsheet CP3.1 and type 2 support costs,
and identify which resources are relevant to your organisation. You can use
column G – ‘Likely sector’ – in Spreadsheet CP3.1 to suggest rows that are
relevant, and set up your own customised list in column H – ‘My organisation’.
13. The transparency of these costs – what they are and where they come from in
the general ledger – should be maintained throughout the costing process.
14. Once these separated costs have been calculated they can be aggregated to
whatever level the resources have been set at, and you can be confident the
resource unit cost is accurate because it is underpinned by this costing
process.
15. Column B in Spreadsheet CP3.1 lists the prescribed patient-facing and
support type 2 resources to be used for the costing process.
16. Column D in Spreadsheet CP3.1 classifies resources as either patient-facing
or support type 2.
17. Column J in Spreadsheet CP2.1 contains the mapping from each line in the
cost ledger to the patient-facing and support type 2 resources. Use this
information to identify the two-step prescribed allocation methods in
Spreadsheets 3.3 and 3.4.
Activities
18. Activities are the work undertaken by resources (including staff) to deliver the
services required by patients to achieve desired outcomes: for example, a
therapy session carried out in clinic by a community psychiatric nurse or a
CPA meeting with the patient and multiple staff members.
19. Together, resources and activities form a two-dimensional view of the costs
incurred to deliver specific activities. This can be displayed in a matrix such as
that shown in Table CP3.1.
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Table CP3.1: Example of a resource activity matrix for two patient contacts
Resources
Activities
Outpatient care CPA meetings
Consultant mental health X
Neuropsychologist X
Cognitive behavioural therapist X
Psychologist X
Community psychiatric nurse X X
Occupational therapist X X
20. Activities are classified either as patient-facing or type 2 support activities.
21. You need to identify all the activities your organisation performs from the
prescribed list of patient-facing and support type 2 activities in column B in
Spreadsheet CP3.2. You can use column J – ‘Likely sector’ – in Spreadsheet
CP3.2 to suggest rows that are relevant, and set up your own customised list
in column K – ‘My organisation’.
22. Some activities are informed by patient-level feeds: for example, the activity
‘Dispense all other medicine scripts’ uses information from the medicines
patient-level feed for costing.
23. Some activities use other information sources for costing: for example, the
activity ‘CNST indemnity’ requires the CNST schedule to allocate the
resources correctly.
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Allocating resources to activities
Figure CP3.1: Extract from the spreadsheet costing diagram in the technical document showing allocation of resources to activities
Resources Activities
Patient- facing resource
Support resource
Cost allocation methods
Cost allocation methods
Patient-facing activity
Support activity
24. Only costs that have an activity-based cost allocation method are assigned a
resource and activity in the prescribed lists of resources and activities.
25. You need to use these prescribed resource and activity combinations in the
costing system.
26. You can ignore the resource and activity combinations for activities that your
organisation does not provide. You can use columns I and F – ‘Likely sector’
in Spreadsheets CP3.3 and CP3.4 respectively to suggest rows that are
relevant, and columns J and G – ‘My organisation’ to set up your own
customised list.
27. You must allocate your patient facing resources to the patient-facing activities
using the methods in column F in Spreadsheet CP3.3.
28. You must allocate your type 2 support resources to the type 2 support
activities using the methods in column D in Spreadsheet CP3.4.
29. Resources need to be allocated to activities in the correct proportion. There
are three ways to do this:
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• based on actual time or costs57 from the relevant feed
• using relative weight values created in partnership with the relevant
departments or
• using a local information source.
30. Where resources need to be apportioned to a number of activities, you need
to determine what percentage of the cost to apportion after discussions with
relevant clinicians and managers, supported by documented evidence where
available (eg medical job plans). These splits and their basis should be
recorded in your costing manual (Worksheet 8.2: % allocation splits).
31. As an example, a division for medical staffing costs is shown in Figure CP3.2.
One way to do this is to disaggregate the cost ledger further to
resource/activity level. Figure CP3.2 shows how this could look in the
resource/activity matrix.
Figure CP3.2: Identifying the correct quantum of resources to apportion to activities
57
The costs should be used as a relative weight value rather than a fixed cost.
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Table CP3.2: Example of a resource and activity matrix for a consultant using the information in Figure CP3.2
Activity
Resource
Consultant
Ward round XX
Supporting contacts
XX
CPA meetings
XX
Outpatient care
XX
32. Do not apportion costs equally to all activities without clear evidence that they
are used in this way, and do not apportion costs indiscriminately to activities.
33. Use a relative weight value unless there is a local reason for applying a fixed
cost.
34. Where the same cost driver is used for several calculations in the costing
system, and providing that the costs can be disaggregated after calculation,
you can aggregate the calculations in your costing system to reduce
calculation time. For example, if numerous costs on a ward use the driver
‘length of stay’, you can add them together for the cost calculation.
35. If you have a more sophisticated cost allocation method for allocating patient-
facing or support type 2 resources to their activities:
• keep using it
• document it in your costing manual (Worksheet 11: Superior costing
methods)
• tell us about it.
36. For allocation methods we have adopted as superior methods, see
Spreadsheet CP3.5.58
58
This list is based on the implementation experiences in the acute sector. We would like to hear about your superior methods.
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37. Some superior methods will require a subset of resources.59 For example, the
Standard CM1: Medical staff superior method of allocating actual payroll detail
for non-consultant medical staff will need a resource below the standard level
of resources.60 There is no requirement currently to adopt this method, but if
you are already performing such detailed work, continue to do so and log it in
your costing manual (Worksheet 11: Superior costing methods).
38. We will not accept some cost allocation methods as superior to the prescribed
methods. These include using income or national averages to weight costs or
allocating costs equally to activities.
39. The patient-level feeds will inform the costing methods by providing key cost
drivers such as length of stay. The patient-level feeds will also provide
information for relative weight values to be used in the costing process, such
as drug costs in the medicines dispensed feed.
40. Investigate any costs not driven to an activity, or any activities that have not
received a cost, and correct this.
Traceable costs (patient-specific costs)
41. Where actual costs61 of items are known, use these in the costing process as
a relative weight value62 to allocate them to the activities (see Table CP3.3).
42. Items for which a traceable cost may be available include:
• drugs, including high-cost drugs
• security – patient-specific cost of escorting using an external provider
• blood tests – where an admitted patient’s blood sample is sent to another
provider for further investigation
• outsourced care at a private inpatient facility
• agency or external provider specialing and specialist care.
59
See Standard CP2: Clearly identifiable costs – including Figure CP2.3: Mapping the costing process components with the inclusion of a local resource.
60 This method will be discussed with the technical focus group that includes software suppliers for
the costing standards – mental health version 3. 61
These actual unit costs are known as traceable costs. 62
If an actual cost is applied, it is likely that costs will be over or under-recovered in the costing system, so actual traceable costs should be used as a relative weight value to allocate the costs.
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Table CP3.3: Using traceable costs as a relative weight value
Number of staff at a facility
Expected cost
Expected spend
Actual spend
Weighted spend ([expected spend/total expected spend] × actual spend)
Escort staff A
5 1,000 5,000 ? 4,091
Escort staff B
12 500 6,000 ? 4,909
Total 11,000 9,000 9,000
43. If the value of the item is material to the cost of the patient and you want to
use the actual cost, you must ensure the value matches the ledger cost. If
there is under or over-recovery you must use the cost as a weighting, as
outlined above.
44. Some departments may have local databases that record material cost
components against the individual patients who incurred them: for example,
an assessment by a specialist from another organisation. These values can
be used in the costing process as a relative weight value to allocate the costs.
Relative weight values
45. Relative weight values are values or statistics used to allocate costs to a
patient event in proportion to the total cost incurred.
46. One way to store the relative weight values for use in your costing system is to
use statistic allocation tables.
47. Income values and national cost averages should not be used as relative
weight values.
48. Relative weight values are used to allocate costs when other drivers are not
available or appropriate. You need to develop and agree them with the
relevant service managers and care professionals to ascertain all aspects of
the costs involved and ensure these are as accurate as possible.
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49. Different costs will require different approaches to derive appropriate relative
weight values to support their allocation to patients. For example, a group
therapy session may require relative weight values for:
• lead care professional time per session
• therapist time per session by band.
50. You should allocate all costs to patients based on actual usage or
consumption. In exceptional circumstances where you cannot do this, you
should use a relative weight value to allocate costs to a patient.
51. Where time is the actual usage measure, the time relates to patient-facing
time, and does not include preparation/follow-up time or travel time.
52. The approach should not be high level – for example, it should not be the
average time to carry out an observation or therapy session. Instead, the
measure should be tailored to the particular activity. To do this you need to
break down the activity into its component costs and measure the drivers of
these individual costs.63
53. Relative weight values should be reviewed on a rolling programme or when a
significant change occurs in the relevant department.
54. When developing relative weight values the materiality principle should inform
where you concentrate efforts to make the biggest improvements to your
costing.64
Care professional support of inpatient units
55. Although the APC feed contains information on the length of stay of patients
on a ward/facility, it does not contain the length of time a care professional
spends on ward rounds or the number of ward rounds undertaken.
56. A relative weight value is required to cost whether the care professional:
63
We appreciate that some areas may not have defined and collected their activity types in this way. Work with the information you have and recommend development of improved activity recording over time, as this type of data can benefit understanding of patient care as well as the costing process.
64 We are developing a costing assessment tool specifically for mental health costing. This will allow
you to understand where work will bring the greatest benefit to the quality of your costing.
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• does more than one ward round a day
• spends more time with one cohort of patients than with others during ward
rounds due to the complexity of their condition or care programme.
57. Use the template in Spreadsheet CP3.8 to obtain the information required
about ward rounds.
58. We recommend you start by identifying care professionals who care for
patients with varying needs, to ascertain if their ward rounds are longer for
particular cohorts of patients.
59. There is no need to calculate a relative weight value for ward rounds or care
professional services to inpatients that do not meet either of the criteria listed
above.
60. Some care professionals may want to refine the calculation of relative weight
values further, eg by focusing on the costs for a particular patient cohort to
identify the benefit to outcomes. Work with clinicians to derive relative weight
values that ensure the costing is accepted by them.
Support costs
61. To allocate support type 1 costs in the correct proportion, relative weight
values may need to be identified by obtaining the relevant information from the
departments.
62. An example of a statistic allocation table for the relative weight values for
budgeted staff headcount in whole time equivalents is given in Table CP3.4.
63. You may add additional information to weight a relative weight value even
further. For example, you may add cleaning rotas or location weightings to
floor area for cleaning, so the ECT suite or clinical areas receive a greater
proportion of cleaning costs than corridors. If you do this, continue to do it and
document it in your costing manual (Worksheet 10.2: Local resource
mapping).
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Table CP3.4: Whole time equivalent table for relative weight values
Department WTE
High-secure ward 15
General ward 25
Therapy rooms 20
Clinic reception 2
Psychiatric intensive care unit
30
Finance office 8
Total 100
PLICS collection requirements
Resources
64. Spreadsheet CP2.1 contains mappings from the standardised ledger codes to
the collection resources. This outlines costs that are out of scope for
collection. Spreadsheet CP3.1 contains a mapping from allocation resource to
collection resource. Some allocation resources map to multiple collection
resources; this is because we have included a department resource in the
cost collection for therapies, diagnostics, pathology and pharmacy costs. All
other service costs in the ledger must not map to the department resources.
Validations will be built into the collection to check resource and activity
combinations in the collection this year.
Activities
65. Allocation activities are mapped to collection activities in Spreadsheet CP3.2
in the technical guidance. Some allocation activities are out of scope for the
PLICS collection; these costs will either be reported in the reference cost
workbook or in the cost reconciliation. Review Spreadsheet CP3.2 with
Sections 7, 19 and 20 from the 2017/18 mental health development PLICS
cost collection guidance for all excluded services and costs from PLICS.
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CP4: Matching costed activities to patients
Purpose: To achieve consistency across organisations in assigning costed activities to the correct patient episode, attendance or contact.
Objective
1. To ensure the prescribed matching rules are used for consistency.
2. To assign costed activities to the correct patient episode,65 attendance or
contact.
3. To highlight and report source data quality issues that hinder accurate
matching.
Scope
4. This standard should be applied to all costed activities.66
5. The auxiliary data feeds, including the ‘medicines dispensed’ feed, need to be
matched to your master data feed. So if you have any of the auxiliary data
feeds listed in Spreadsheet IR1.1 – for example, the medicines feed to be
matched to the APC care feed or NAPC feed – this standard is relevant. If you
have any additional auxiliary data feeds67, they must also comply.
65
Note: traditionally, the mental health sector did not use the term ‘episode’ for an inpatient stay.
The MHMDS does now use this term, so it or inpatient stay is used throughout the Healthcare costing standards for England – mental health. In reporting terms, episodes can be aggregated up to spells or other measures.
66 Standard IR1.1: Collecting information for costing purposes identifies which patient-level activities are to be part of the matching process.
67 Some mental health organisations use a separate ward stay dataset which is matched as an
auxiliary feed. If your organisation does, please continue to do so, and record it in your costing manual (Worksheet 1.2: Additional information source). There is more detail around matching
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Overview
6. Matching is integral to accurate patient-level costing.68 For an accurate final
patient unit cost, the costed activities need to be matched to the patient
episode, attendance or contact in which they occurred.
7. The costing process matches costed activities to patients in two steps:
1. allocate resources to activities (explained in Standard CP3: Appropriate
cost allocation methods)
2. match costed activities to the correct patient episode, attendance and
contact (explained in this standard).
8. The costing process uses two approaches to match costed activities to
patients:
• for activities informed by a patient-level feed, use the prescribed matching
rules
• for all other activities, use the prescribed cost allocation methods to match
the costed activities to the patient.
9. The prescribed matching rules ensure the relevant auxiliary data feeds can be
attached to the correct patient episode, attendance and contact.
10. Matching rules need to be hierarchical and strict enough to maximise
matching accuracy, but not so strict that any matching is impossible. Matching
rules that are too lax risk ‘false-positive’ matches occurring – that is, activity is
matched to the wrong patient episode, attendance or contact.
11. The matching hierarchy in the prescribed matching rules dictates which
master PAS datasets the auxiliary feed is matched against, and in what order.
12. Where a data feed contains the patient’s point of delivery (POD) or location,
and the data field is considered robust, use this to determine which core PAS
rules for ward stay datasets in the Healthcare costing standards for England – acute. We will review these for their appropriateness to mental health providers for future versions of the Healthcare costing standards for England – mental health.
68 For mental health providers, staff costs constitute a major proportion of overall costs. However, to
make patient-level cost data more reliable, it is important to track and match other comparatively less material costs back to patients as well.
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patient dataset to match against. For example, if a patient event is classed as
a non-admitted patient contact in the data feed, this patient’s activity is first
matched against the master NAPC dataset. If the data in this field is
considered robust, records should only be matched to the NAPC dataset to
avoid the risk of ‘false-positive’ matches.
13. As data feeds have different matching patterns associated with their activities,
each has a distinct set of matching rules. Matching rules may differ in their
hierarchies, date parameters or additional data fields used in the matching
criteria.
14. The rules are designed to match iteratively by using the strictest matching
rules first and then relaxing these if a match is not achieved. These rules are
designed to achieve a balance between the number of false positives being
matched and the number of records remaining unmatched.
15. The accuracy of matching costed activities using the prescribed matching
rules depends on the quality of both the master feeds and the auxiliary feeds.
Follow the guidance in Standard IR2: Managing information for costing to
support your organisation in improving data quality.
What you need to implement this standard
• Spreadsheet CP3.3: Methods to allocate patient-facing resources, first to
activities and then to patients
• Spreadsheet CP3.4: Allocation methods to allocate type 2 support
resources, first to activities and then to patients
• Spreadsheet CP4.1: Matching rules
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Approach
Figure CP4.1: Excerpt from the spreadsheet costing diagram showing matching costed activities to patients
Activities
patients
Matching rules
Cost allocation methods
Patient-facing activity
Support activity
Cost allocation rules
Using the prescribed matching rules
16. The episode/attendance/contact ID always generates the best match as
this is unique to the patient and the relevant date range.69 In the MHSDS, this
is:
• admitted patient care (APC feed):
a. ‘local patient identifier (extended)’
b. ‘start date (care professional admitted care episode)’
c. ‘end date (care professional admitted care episode)’
• non-admitted patient care (NAPC feed):
d. ‘care contact identifier’
e. ‘care contact date’.70
69
If there is more than one contact on one day, the ID should also include this, whereas a simple aggregation of patient identifier and date will only reflect one contact on one day.
70 In some organisations the care contact identifier will include the care contact date. If this is the
case in your organisation, you do not need to add the care contact date twice.
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17. If your auxiliary data feeds (eg medicines dispensed feed71) are obtained from
the PAS, and you can include the episode or attendance ID in the feeds, use
this to match to the master feeds.
18. If your auxiliary feeds do not include the episode/attendance/contact ID, use
the prescribed matching rules in Spreadsheet CP4.1.
19. If your matching rules are more sophisticated than the prescribed matching
rules and improve the accuracy of your matching, continue to use them and
record them in your costing manual (Worksheet 3.1: Superior matching).
20. Activities from the non-integrated systems need to be matched to the following
groups of patients:
• patients discharged during the costing period (APC feed)
• patients not discharged and still in a bed at midnight on the last day of the
costing period (APC feed)
• non-admitted patient care (NAPC feed).
21. Some activities from non-integrated systems should not be matched. For
example:
• drugs dispensed from pharmacy for a patient whose episode is already
closed
• drugs issued by pharmacy but sent to another organisation without a
patient contact72 even if the patient is under a care plan with your
organisation
• drugs dispensed from pharmacy to patients who did not attend (DNA) or for
children/vulnerable adults were not brought (WNB).
22. For this reason there are no prescribed matching rules for the NAPC feed
relating to DNA/WNB.
71
We understand that some mental health organisations use the ‘ward stay’ data as a separate auxiliary feed. We are currently considering adding this to the information requirements.
72 For more guidance on how to cost patient-specific drugs, see Standard CM10: Pharmacy and
medicines.
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Matching hierarchy used in the prescribed matching rules
23. All the feeds with prescribed matching rules in Spreadsheet CP4.1 follow the
hierarchy:
1. APC
2. NAPC.
The hierarchy is adjusted slightly for each feed to reflect how the service is
provided
24. In addition to this hierarchy, there are additional searches up to 720 hours
either side of the delivery dates to increase the chances of a match.
25. You must search 24 hours before and after the exact date, expanding
consecutively up to 720 hours. For example:
• 24 hours before, 24 hours after
• 48 hours before, 48 hours after.
26. You must search APC 24 hours before, then NAPC 24 hours before, then
APC 24 hours after, then NAPC 24 hours after, expanding consecutively up to
720 hours. For example:
• 24 hours before APC
• 24 hours before NAPC
• 24 after hours APC
• 24 hours after NAPC
• 48 hours before APC
• 48 hours before NAPC
• 48 hours after APC
• 48 hours after NAPC.
27. There are also conditional criteria contained in the prescribed matching rules.
28. The prescribed matching rules then search again without the conditional
criteria.
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29. The mental health auxiliary feeds in Standard IR1: Collecting information for
costing should be matched in the order given in Spreadsheet IR1.1. If you
have (or develop) other auxiliary feeds, these should be matched after the
mandated fields.73
Using the prescribed cost allocation methods
30. For patient-facing activities not informed by a patient-level feed, use the
prescribed cost allocation methods in column F in Spreadsheet CP3.3 to first
allocate patient-facing resources to activities, and then use column G to match
the costed activities to patients.
31. For support type 2 activities not informed by a patient-level feed, use the
prescribed cost allocation methods in column D in Spreadsheet CP3.4 to
allocate type 2 support resources first to activities and then to patients.
Figure CP4.2: Allocating costs if patient activity information is unavailable
73 We are looking to include examples of best practice additional auxiliary feeds. Please let us know
if you have these.
Do you have information available that can help you
with allocating costs to patients?
If yes, allocate costs to activity following guidance provided in Standards CP2
and CP3
If no
Step 1: Speak to the team providing care to work out how costs can be allocated
to patients in absence of activity data
Step 2: Develop relative weight values in
collaboration with the providing team (eg
pharmacy) to allocate costs to the receiving teams (eg
CMHT). These costs should be reported as reconciliation
items
Step 3: If the receiving teams (eg CMHT) cannot be identified, report the costs by
providing team (eg pharmacy) as a
reconciliation item
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Other considerations
32. Some costed activities will inevitably not match because either the activity
took place too long before the episode/attendance, or the quality of the
information in the activity feed is so poor that an appropriate match cannot be
found.
33. Develop a list of ‘unlikely matches’ to be included in the matching rules for
your organisation to ensure that costs for some activities are not assigned to
episodes incorrectly. For example, as the drug melatonin is normally
prescribed to children, you should query its assignment to an adult patient,
even if other matching criteria are fulfilled. Engagement with clinicians, the
pharmacy team and other staff will help you identify these ‘unlikely matches’.74
34. Your costing system should produce a report of the matching criteria used in
your system as described in report CP5.1.8 in Spreadsheet CP5.1. You
should have a rolling programme to review this.
35. Review is necessary because costed activities may be being matched on the
least stringent criteria, and work is needed to improve data quality so that
activity can be matched more accurately. You should have a rolling
programme to review this.
Reporting unmatched activity for local business intelligence
36. Organisations have traditionally treated the cost of this unmatched activity in
different ways. Most commonly, it was absorbed by matched activity, which
could have a material impact on the cost of matched activity, particularly when
reviewing the cost at an individual patient level for comparison with peers and
tariff calculation.
37. For local reporting purposes we recommend you do not assign unmatched
activity to other patient episodes, attendances or contacts.
38. To achieve consistent and comparable costing outputs, unmatched activity
should be treated consistently across organisations. We suggest applying
these rules for any unmatched activity:
74
You will need to work with your costing software supplier to ensure regular reporting of these items is possible, and have a process in place to audit/amend any erroneous matches.
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• If the service that ordered the item can be identified but the item cannot be
matched to a patient episode, attendance or contact, the cost sits in the
service under unmatched items. It should not be matched to the other
patients within that service.
• If the service that ordered the item cannot be identified, the cost sits in the
providing department under unmatched items. Likewise, the cost should not
be matched to the patients within the estimated specialty. For example, if a
drug issue cannot be matched to a patient episode, attendance, contact, or
known other POD, the unmatched activity should be reported under the
pharmacy service line as this is the department that provided the service.
This data should be discussed with the pharmacy department to improve
understanding or improve data quality in the feed.
39. If reported unmatched activity forms a material proportion of an organisation’s
expenditure, this is likely to be due to poor source data. As this issue will
deflate the patient unit cost, it is important to identify it and improve the
quality of the source data, rather than artificially inflating the patient unit cost
by allocating unmatched activity.75 Please follow the guidance in Standard
IR2: Managing information for costing to support your organisation in
improving its data quality.
40. Follow the steps identified in Figure IR2.1 in Standard IR2: Managing
information for costing to make new auxiliary data feeds available for costing.
You will need to work with your informatics team to make information available
that can be used for matching. Guidance on how costs should be allocated to
patients is provided in Standard CP3: Appropriate cost allocation methods.
41. Your costing system should produce a report showing all unmatched activity
as described in Spreadsheet CP5.1 and you should have a rolling programme
to review this.
42. Tables CP4.1 and CP4.2 below show how unmatched activity could be
reported to assist business intelligence.
75
See paragraphs 18 to 34 in Standard CM2: Incomplete patient events for guidance on matching auxiliary feeds to incomplete patient events and how to treat events that occur in a different costing year.
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Table CP4.1: Example of unmatched activity within a service
Service: CAMHS South Team Total activity
Total resource cost
Inpatient care – core episodes XX
Drugs issued to CAMHS XX
Outpatient care XX
Education and training XX
Unmatched activity identified as CAMHS but unable to match to individual patients
XX
Total XXX
Table CP4.2: Example of unmatched activity within a providing department
Department: Pharmacy Total activity
Total resource cost
CAMHS XX
Adult acute service XX
Older persons secure unit XX
Adult outpatients XX
Unmatched activity unable to be allocated to a specialty or patient
XX
Total XXX
PLICS cost collection requirements
46. For the PLICS collection, costs should be aggregated at spell and care
contact level.
47. Unmatched cost should not be reported separately. All unmatched costs
should be allocated to patient spells and care contacts using matched activity.
Unmatched activity should be excluded from allocation methods so costs are
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allocated to matched activity only, with the exception of the activities from the
non-integrated systems outlined above. You need to be able to flag
unmatched activity and cost in your costing system to complete the costing
assessment tool.
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CP5: Reconciliation
Purpose: Process for reconciling costs and income to the organisation’s accounts and to reconcile the activity counts reported by the organisation.
Objectives
1. To ensure the cost and income outputs from the costing system reconcile to
the organisation’s accounts.
2. To ensure the activity outputs from the costing system reconcile to what the
organisation is reporting.
Scope
3. This standard covers all costs, income and activity included in the costing
process.
Overview
4. All outputs of the costing process must reconcile to the information reported to
the board and in the final audited accounts. This ensures a clear link between
these outputs and the costs and activity information captured in the source
data.
What you need to implement this standard
• Costing principle 2: Good costing should include all costs for an
organisation and produce reliable and comparable results
• Costing principle 4: Good costing should involve transparent processes
that allow detailed analysis
• Spreadsheet CP5.1: Cost and income reconciliation reports
• Spreadsheet CP5.2: Activity reconciliation reports
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Approach
Reconciliation of costs and income
5. The costs and income outputs must reconcile to the main sources of this
information, with the general ledger output and the organisation’s reported
financial postion.76
6. To demonstrate that the outputs of the costing process reconcile to the main
sources of information, use the cost and income reconciliation reports detailed
in Spreadsheet CP5.1.
7. To support reconciliation and reporting, once the costing model is fully
processed the costs associated with patients and other cost groups should be
classified into the five cost groups listed in Table CP5.1.
8. Where your organisation is commissioned to provide an activity, but this
activity occurs outside it and is recorded by an external body, you should
obtain this information and include it with your organisation’s costing data. If
you cannot obtain the activity data, report the cost in reconciliation items.
9. Cost and activity reconciliation items have these benefits:
• patient unit costs reflect the true cost of treatment, undistorted by provider-
incurred costs that are not patient-related
• the true cost is more appropriate for benchmarking between providers as
non patient-related costs could significantly affect cost reporting in different
organisations.
76
See Standard CP2: Clearly identifiable costs for guidance on where adjustments may be made between the general ledger output and the cost ledger, to be included in your reconciliation.
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Table CP5.1: Cost groups
Cost group Description
Own-patient care Costs relating to the organisation’s own-patient activity including:
• incomplete patient events.
• MDT meetings
• contracted-out services (such as capacity purchased from
private inpatient organisations)
• private patients, overseas visitors, non-NHS patients and
patients funded by the Ministry of Defence.
Education and training (E&T)
Costs relating to E&T at the organisation.
Research and development (R&D)
Costs relating to R&D in the organisation.
Other activities Includes the costs related to the organisation’s:
• commercial activities, such as pharmacy services for
another provider
• direct access services,77 where the patient is referred from
primary or community care for assessment only but the care
remains with the GP/community organisation
• local authority care
• voluntary and other third-party sector services
• national programmes.
Cost and activity reconciliation items
Includes where there is activity for which there are no
corresponding costs.
Includes costs for which there is no corresponding activity, such
as in these circumstances:
• grants or donations received
• a provider has an agreement to provide resources to an
external body with no responsibility for delivering that
service to a commissioner, eg a provider-to-provider
service-level agreement – including national programmes
77
We are looking for examples where mental health services provide diagnostic services directly to primary care. Please include these in your feedback on the consultation.
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Cost group Description
with funding outside the standard contracts with
commissioners
• a staff member such as a youth worker is employed by a
provider for activity undertaken by the local council and that
the provider is unable to include in the costing system.
Reconciliation of activity
10. The activity outputs must reconcile to what your organisation reports. For
example, if it reports XX contacts in NAPC in any costing period, your activity
costing outputs should reconcile to this. To avoid reconciliation differences
due to timing, we emphasise that patient-level feeds used in the costing
process and those reported by the organisation are created at the same
time.78
11. To demonstrate that the outputs of the costing system reconcile to the main
sources of activity information, the activity reconciliation reports detailed in
Spreadsheet CP5.2 must be available from the costing system.
12. You should also reconcile the activity outputs to the activity in the source
datasets to ensure all the activity you entered into your costing system has
been costed and then included in the costing output.
Proxy records
13. If possible, you should avoid generating proxy patient contact/attendance
records within the costing system to solve data quality issues in the main
patient feeds. It is better practice to work with your informatics department and
service teams to create the correct data entry on the ‘right first time’ principle –
see Standard IR1: Collecting information for costing. Creating proxy records
can lead to double counting of activity outputs: for example, when someone
later adds a missing record and it flows through to the costing system, a
second amount of cost will be picked up for the same activity. However, if you
78
Departments often continue to input data into the feeder system after the official end date. It is helpful if the costing professionals understand any changes to the activity data after the point the costing activity dataset was run, as they may be asked questions about why the current data showing in organisation dashboards does not reconcile to costing activity data.
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have created proxy records, these will need to be shown in the activity
reconciliation; otherwise PLICS will not reconcile to provider reports.
14. In your costing process do not include activity that is recorded in your data
feeds but whose incurred costs sit in another organisation. Report this activity
in ‘cost and activity reconciliation items’.
15. To reconcile the activity used in the system to that actually carried out by the
department/service, the activity count must be correct on the information
feeds. For example, if each line on the NAPC feed represents one contact, a
straight count of activity is adequate. If three separate lines on the feed
represent a single contact, the reconciliation report needs to aggregate these
lines to give an accurate activity count. Record this information in your costing
manual (Worksheet 1.1: PL activity feeds).
PLICS collection requirements
16. For collection, the provider’s PLICS quantum must reconcile to its final audited
accounts. See the 2017/18 mental health development PLICS cost collection
guidance for more information.
17. Reported hospital provider spell and care contacts must reconcile to your
MHSDS and IAPT submissions, with variances explained. An additional cost
group is required to identify services that are out of scope of the patient-level
collection extracts. See the 2017/18 mental health development PLICS cost
collection guidance for a list of these services.
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CP6: Assurance of cost data
Purpose: to ensure providers develop and maintain a high quality assurance process for costing and collection purposes.
Objectives
18. To provide assurance that:
• providers have implemented the standards and collections guidance
properly
• the costing principles have been applied in the costing process and outputs
• providers are maintaining a clear audit trail of the costing and collection
process
• processes are adequate to validate the accuracy of the data being
submitted in line with the Approved Costing Guidance
• opportunity has been provided for clinical review of the patient pathways
and cost data.79
Scope
19. All costing processes and outputs produced by the provider.
Overview
20. There are several ways to provide assurance on the costing and collection
process, including:
79
Later versions of the standards will require clinical review, but having taken feedback, developing these review processes is the goal.
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• formal audit of process and submission by the providers’ internal and
external auditors
• evidence demonstrating:
– compliance with the standards and associated guidance
– users’ review of cost data
– use of the cost information to support decision-making (eg cost
improvement plans, returns to regulators, local prices)
– minutes of regular user/working group meetings.
21. The assurance process should be an integral part of producing cost
information. Producing an audit trail covering assumptions, decisions and
reviews should be part of the process. This will enable the organisation to
demonstrate it has adequate processes in place for ensuring the accuracy of
cost information, both to internal and external users.
22. Many stakeholders require assurance:
• the executive team in its strategic decision-making
• clinicians and their operational managers in analysing activities and clinical
procedures
• external stakeholders who may make varied use of the information.
23. The level of evidence should be sufficient to support the reason for making the
change. It will also allow updates and changes to be made to the costing
processes and can be described in your costing manual (Worksheet 12.2:
Decision audit trail), showing why processes have been changed. This will
support the assurance process for the board when submitting the costing
submission. It can also help identify areas where costing needs to be
improved, based on findings that could not be completed in time for
submissions.
24. We provide several tools to help develop and maintain an assurance process
that will promote continued improvement of costing in your trust. Figure CP6.1
shows examples of these.
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Figure CP6.1: Assurance tools
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What you need to implement this standard
• Costing principle 4: Good costing should involve transparent processes
that allow detailed analysis
• Costing principle 7: Good costing should engage clinical and non-clinical
stakeholders and encourage use of costing information
• Costing manual template80
• Standards gap analysis template
• Information gap analysis template
• Costing assessment tool for mental health
• Data validation tool
• Data quality tool
• Access to NHS Improvement’s PLICS portal.
Approach
Good documentation of all costing processes
25. You should use our tools to document the costing processes used in your
organisation to produce the cost information. In particular:
• The costing manual helps document compliance with the standards. It will
record where your have made local adjustments and the reasons why. It
will also ensure your organisation retains costing knowledge and expertise
when costing practitioners change.
• The standards gap analysis template summarises the costing process
standards (CPs) and the costing methods (CMs) to help your organisation
plan and prioritise implementing the standards.
• The information gap analysis template helps assess the gaps between
the information collected and what the information requirements standards
(IRs) require. This will help discussions between informatics teams and
costing practitioners on assessing and closing the gaps identified.
• The costing assessment tool (CAT) for mental health81 helps providers
to understand and record their progress in the implementation of the
80
These tools/templates are available on our website. 81
This tool is under construction and will be available in the next few months. The current CAT is designed for acute services, but mental health providers can use it as guide.
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costing standards. It will help you focus your attention on areas to develop
and improve based on their materiality.
• Spreadsheet: Transition path describes a three-year plan for
implementing the standards.
• Table CP6.1 at the end of this standard is an example of a checklist to help
you develop an assurance process.
26. Documenting all costing processes effectively brings benefits that include:
• being able to show the assumptions and source data to end users, which
will improve the outputs’ credibility and increase confidence in their
usefulness
• a clear audit trail – an integral part of good documentation – will facilitate
reconciliation and assurance, as well as provide evidence for the
management of the overall process; it will also provide a template for
improving future calculation of costs
• understandable assumptions that can more easily be challenged, leading to
improvements in the costing process.
Assurance on the quality of costing processes and outputs
27. Costing is a material and significant system in providers as it supports national
and local pricing processes, and generates the underlying data for business
and investment decisions. Therefore we expect providers to ensure costing is
included in internal and external audit. This will provide assurance on the
accuracy of cost data for its internal and external users.
28. It is important to remember that understanding the costs of delivering services
is fundamental to providers managing their financial position and to their
business planning. This is why it is recognised that unless cost information is
linked to the organisation’s ongoing management, it will not accurately reflect
the services being delivered.
29. The more that services use cost information, the more they will understand the
cost data and how it has been calculated. This in turn will build their
confidence in the cost information produced for their service. This is why it is
vital to offer an opportunity for services to review and give feedback on their
cost data.
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30. Cost information should be owned by senior managers and clinicians. The
finance function needs engagement from across the organisation if it is to
provide meaningful support.
Costing user group
31. An example of best practice in engaging stakeholders is to form a ‘costing
user group’ with executive and clinical membership. Ideally the chair would be
a clinician.
32. Such a group’s overall purpose is to improve the quality of cost information
and oversee, provide ideas for, and encourage and evaluate the use and
understanding of cost information in the organisation.
33. It can achieve this by:
• reviewing cost information and the cost submission
• reviewing the quality and coverage of underlying data
• reviewing the costing processes
• agreeing priorities for reviewing and developing the system.
34. To assist with this, the group should be supported by members from:
• IT (technical services)
• informatics (information services)82
• clinical coding (if relevant)
• finance
• service management
• other care professions including senior nursing
• E&T
• senior nursing
• a clinical champion (any discipline).
35. This type of review should be part of a rolling programme rather than one-off
as part of a national annual collection.
82
IT technical services and information services may be form one department or separate. Regardless, as both elements are so critical to PLICS, both should be appropriately represented.
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Regular assurance processes
36. You should have a rolling programme of reviewing the costing processes and
outputs to provide assurance that the costing information is sufficiently
accurate for its intended use. The effort applied to this type of validation
should be proportionate to the significance of the costs being measured, and
to the costing purpose, in line with the principle of materiality.
37. It is important for you to work with clinicians, other care professionals and
service managers so you can:
• understand all the resources and activities involved in delivering patient
care
• understand the information sources available to support costing
• identify the expected costs associated with that care
• ensure that this is reflected in your costing processes within your costing
system.
38. Effective board engagement with costing is a prerequisite for improving and
making better use of patient-level cost information. Boards have an important
role in securing greater engagement between clinical and costing staff.
39. Effective executive support will also lead to more and better governance,
including documenting and defining policies and procedures.
40. The director of finance signs off the cost submission as part of the self-
assessment checklist. This is on the provider’s behalf and confirms the trust
has completed all required actions to ensure the submission’s accuracy.
Assurance on the reconciliation to other information sources
41. Reconciliation to financial and activity sources is an important part of providing
assurance on the quality of the costing outputs. It is important to provide
assurance that a single source of data is used for all decision-making. Follow
the guidance in Standard CP5: Reconciliation to ensure you are reconciling to
the appropriate information sources, and Spreadsheets CP5.1 and CP5.2.
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Assurance on the quality of the cost submission83
42. We provide tools to help you with the quality of your cost submission. These
include:
• The self-assessment checklist: ensures providers are reviewing their
data quality, and includes executive review and sign-off and minimum
expected quality checks.
• The PLICS data quality tool: reviews the submitted cost data, quickly
identifying quality issues, and informs providers if resubmission is required.
Providers will receive a quality/index report to help inform their costing and
to investigate their data.
• The data validation tool: comprises mandatory validations that indicate
whether the submission will fail based on the field and values formatting
requirements for uploading the data. The tool also includes checks where
analysing the data reveals warnings about expected outputs. These
warnings are non-mandatory and should lead your investigation, validation
and assurance of the cost data uploaded.
Comparison with peers
43. The PLICS portal will allow providers to review their submitted data and
anonymously compare their outputs to their peers. This allows providers to
focus on their outlying areas and review the activity and costing for these. The
PLICS portal will provide a suite of reports that focus on the areas where
providers can improve the costing and assurance of their data.84
44. The data validation tool provides a baseline analysis of warnings that give
assurance that all providers submitting data have input data that is
comparable and subject to the same validations as their peers. The work that
follows the warnings generated from the data validation tool will give additional
assurance that providers have investigated and corrected their data to best fit
the expected costs of the submission and those of their peers. You should
have a rolling programme of local exercises to regularly compare your
organisation with its peers.
83
Information on these tools and where to find them is given in 2017/18 mental health development PLICS cost collection guidance.
84 The portal is only available to those providers that have submitted PLICS data.
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Costing assurance programme85
45. The aim of the assurance process is to provide evidence of the work
undertaken and the reasoning behind the decisions made. As such, the audit
trail, evidence of meetings, discussions with clinicians, etc should be
maintained but not an end in itself.
46. Providing evidence for an external assurance audit should not be the main
purpose for collecting this information.
47. The evidence provided should also be in harmony with the costing principles.
Example: An assurance checklist
As part of the ongoing assurance process you should use a checklist. Table CP6.1
is an example of a costing assurance checklist. When used, your specific dates
should be added to each line.
CP6.1 Example of a costing assurance checklist
Month Process stage Checklist Completed
1 Implementation of the standards
Standards and associated guidance read by costing team
1 Implementation of the standards
Relevant standards shared and discussed with relevant departments, eg:
• Standards IR1: Collecting information for costing and Standard IR2: Managing information for costing, shared with informatics
• Standard CP2: Understanding the general ledger, shared and discussed with finance colleagues
• Standard CP5: Reconciliation, shared with your software supplier to ensure system can produce their reports
• CM standards, reviewed with relevant departments
85
Details of the annual costing assurance programme, including the scope of services included, are given in the Approved Costing Guidance.
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Month Process stage Checklist Completed
2 Implementation of the standards
Complete the information gap analysis template
2 Implementation of the standards
Complete the standards gap analysis template
2 Implementation of the standards
Set up costing manual
3 Implementation of the standards
Identify areas to work on to improve the quality of costing for this cycle (implementation of standards through to collection)
3 Implementation of the standards
Sense check identified areas against the costing principles
3 Implementation of the standards
Meet clinicians and other care professionals and service managers to acquire understanding and information needed to inform the costing process
3 Implementation of the standards
Inform and agree with executive management the costing development approach you are taking for this cycle eg:
• following the transition path in the Approved Costing Guidance
• focusing on areas of local importance
3 to 6 Implementation of the standards
Implement developments in the costing system
6 Implementation of the standards
Document processes, assumptions made, etc
6 Implementation of the standards
Revisit and refine assumptions with clinicians and other care professionals and service managers to ensure understanding is correct and will provide meaningful results
6 Implementation of the standards
Sense check refinements against the costing principles
6 to 9 Implementation of the standards
Implement developments in the costing system
9 Implementation of the standards
Sense check first results from implementation developments with
Mental health costing processes
107 | > CP6: Assurance of cost data
Month Process stage Checklist Completed
clinicians and other care professionals and service managers
9 Implementation of the standards
Update executive management on first results
10 to 12
Implementation of the standards
Update costing system on refinements from sense check
11 Preparing for the collection
Prepare for collection – review collection guidance again
12 Preparing for the collection
Prepare submission using:
• self-assessment checklist
• data quality tool
• data validation tool
12 Preparing for the collection
Run the reconciliation reports in Standard CP5: Reconciliation to ensure financial and activity values reconcile
12 Preparing for the collection
Sense check costing outputs and reconciliation reports in line with the costing principles
12 Preparing for the collection
Complete the costing assessment tool
12 Preparing for the collection
Obtain executive management sign-off of the submission
12 Post submission and before next implementation phase
Update the costing manual
Post month 12
Post submission and before next implementation phase
Do peer comparison to identify outliers and to inform next cycle of costing development
© NHS Improvement 2018 Publication code: CG 61/18
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