Schedule 7
Agreement and Performance Management
[DN: PCTs should set the hurdle rates for the KPI Performance Bands A, B and C and the contract management remedies (table 6.1) to meet the requirements of their dental service provision]
1.Introduction
Overview
1.1ThePCT is looking for Contractors to deliver high quality, patient centred and VfM dental services, delivered in a safe and effective manner.
1.2In order to support the PCT's aspirations and to encourage a partnership approach with the Contractor, a simple, self-auditing approach to performance management has been adopted.
1.3The Contractor is required to report, score and manage their performance in accordance with and to meet the requirements of this Schedule 7 and to meet the satisfaction of the PCT.
1.4Any deductions to be made from the Contractor in relation to the Key Performance Indicators (KPIs) under this Schedule 7 will affect the Performance Payment only and will not affect the Services Payment or Access Payment under Schedule 3 (Payment Mechanism).
Key Performance Indicators
1.5The key areas of focus and importance are identified by their inclusion as Key Performance Indicators (KPIs) in Annex 1(the KPI Performance Summary). The KPIs are detailed in Annex 1 (the KPI Performance Summary) of this Schedule 7. The KPIs are covered under the Performance Payment element and are organised into the following areas:
Performance Payment
Table 1
KPI Category / Performance Bands / Maximum %[1](a) / Effective Care; / A/B/C / [15]
(b) / Health Promotion; / A/B/C / [10]
(c) / Patient Experience. / A/B/C / [5]
Total / [30][2]
Performance Bands
1.6The standard of performance required for each KPIis defined in terms of three Performance Bands A, B and C.
1.7The Bands are represented as follows:
- Band A – desired performance
- Band B – minimum acceptable performance
- Band C – unacceptable performance
1.8For each Performance Bandthere is a correspondingPayment Band and a range of performance has been defined by the PCT.
Payment Bands
1.9EachPayment Band shows the percentage of the maximum payment for that KPI that a Contractor will receive for demonstrating performance of that KPI to that Performance Band.
Weighting
1.10Taken together each of the three KPI categories should add up to the percentage allocated in Paragraph 2.1 of Schedule 3 of the Agreement for the Performance Payment (see table 1 example). Within each KPI category the aggregate of the individual KPI weightings should add up to 100% of the overall KPI category allocation.
1.11The performance achieved by a Contractor for each individual KPI will be combined inAnnex 1 (KPI Performance Summary), to give a total performance rating for the associated KPI category which is then aggregated to give an overall Performance Percentage (see worked example in Annex 2).
1.12The Performance Percentage achieved(as per Annex 1),is then usedfor the Half Year Review and Annual Reconciliation Meeting in accordance with Paragraph 8 of Schedule 3 (Payment Mechanism)[3] to calculate the Achieved Performance Payment to be used as part of the reconciliation.
1.13Annex 2includes an example of how the payment mechanism works using the Performance Bands, Payment Bands and KPI weightings in order to calculate the Performance Payment.
1.14[The PCT will give the Contractor the period of up to [12] months from the [Commencement Date][Service Commencement Date][4]in which to achieve Band B performance for [all of the KPIs]].
1.15[The relaxation of KPI requirements and the assumption of Performance Band B performance for payment purposes during such period is conditional upon the Contractor demonstrating to the PCT's satisfaction at the end of each month that the KPIs have been relaxed that sufficient reasonable progress is being made to achieve Performance Band B across all the KPIs by the end of such period. This may include (at the PCT's request) the submission of a report from the Contractor demonstrating the current level of performance against the relevant KPIs and the actions which have been taken (and which will be taken over the next month) to move towards achieving Performance Band B.]
2.Meetings - General
2.1The parties acknowledge and agree that they shallmeet for Half Year Review and Annual Reconciliation Meetings convened in each Financial Year in accordance with paragraph 4 of this Schedule 7.
2.2Without prejudice to the remaining provisions of this Schedule 7, the Board Directors shall meet at such other times as either the PCT or the Contractor'sAgreementManager may reasonably require by giving not less than ten (10) Business Days (or such period as is otherwise agreed by the parties) prior written notice to discuss any matters referred to them by the relevant Agreement Manager.
2.3The purpose of the meetings in Paragraph 2 of this Schedule 7 is, without limitation, to allow the formation of groups by the parties, to discuss any matter relating to the Services with the intention of ensuring the successful and efficient operation of the Services and avoiding so far as reasonably practicable disputes being referred to the Dispute Resolution Procedure.
3.Monthly Contract Management Reporting
3.1The Contractor will co-operate with NHS Dental Services division of the NHS Business Services Authority ("NHSDS") in providing any information specified by the PCT in relation to the performance of the Services against the KPIs as soon as practicable in order to enable NHSDSas an agent for the PCT to provide a report to the PCT onthe Contractors performance under the KPIs within 10 Business Days after the end of the relevant Agreement Month.
3.2The Contractor may be required to provide information to the PCT under Paragraph 3.1 above in order to enable the PCT to review the following areas:
(a)identifyKPIs where the Contractor anticipates achieving a rating of Performance Band C for the Half Year Review and Annual Reconciliation Meetingand the corrective action the Contractor has implemented or intends to implement to improve the rating;
(b)identify any adverse reports of any relevant statutory and non-statutory bodies received by the Contractor in the immediately preceding Agreement Month which relate to the Services;
(c)identify any Patients’ complaints received by the Contractor in the immediately preceding Agreement Month which relate to the Services;
(d)any explanation for and the proposed Rectification Plan for eachKPI where the Contractor achieves Performance Band C; and
(e)provide any suggestions for the possible improvement of the delivery of the Services.
4.Half Year Review and Annual Reconciliation Meetings
4.1Throughout the term of this Agreement the parties shall convenetwo (2)Half Year Review and Annual Reconciliation Meeting(s)for each Financial Year(with one such meeting scheduled to review the first half of the relevant Financial Year and the second to be scheduled within twenty (20) Business Days of 30 June in the nextFinancial Year). Such meetings shall be in addition to (and will not affect) any obligations on the parties to hold other reviews or meetings in accordance with the Regulations.
4.2As a minimum, each of the [PCT Agreement Manager, the PCT Dental Lead (one of whom shall act as chair of the Half Year Review and Annual Reconciliation Meeting), the Contractor’s Agreement Manager and the Contractors Dental Director][5] shall participate and co-operate fully in each and every Half Year Review and Annual Reconciliation Meeting. The PCT and Contractor may also ask other individuals to attend meetings as may be reasonably necessary from time to time.
4.3The PCT and the Contractor shall use reasonable endeavours to use each Half Year Review and Annual Reconciliation Meeting to hold open and honest discussions to reach a mutually agreed conclusion.
If agreement cannot be reachedbetween the PCT and the Contractor onany matter discussed at a Half Year Review and Annual Reconciliation Meeting (including without limitation upon the nature of remedies to be applied for a Contractor KPI Failure) then any such dispute will be dealt with in accordance with Paragraph 4.8 below.
4.4AHalf Year Review and Annual Reconciliation Meetingmay consider, without limitation:
(a)the Contractor’s performance of the Services under this Agreement (save that the parties shall not take any action as part of the Half Year Review and Annual Reconciliation Meeting which is contrary to the provisions of Paragraphs 58 and 59 of Schedule 3 of the Regulations)[6];
(b)the operation of the Performance Monitoring Regime;
(c)reports of any relevant statutory and non-statutory bodies received by the Contractor in the immediately preceding twelvemonth(s) (or such period as the PCT may determine) which relate to the Services;
(d)Patients’ complaints received by the Contractor in the immediately preceding Financial Year (or such period as the PCT may determine) which relate to the Services;
(e)the KPI Performance Summary for the period of the relevant Financial Year (or such other period as the PCT may determine)and hence the Performance Percentage for the period;
(f)the progress of the Contractor in respect of each current Rectification Plan;
(g)a Rectification Completion Report in respect of any Rectification Plan which has concluded;
(h)the results of any Contractor Data Reviews carried out in the immediately preceding Agreement Month(s); and
(i)any other relevant issues.
The Contractor shall provide any relevantinformation in respect of the matters detailed in Paragraph 4.4 to the PCT by no later than ten (10) Business Days prior to the date of the Half Year Review and Annual Reconciliation Meeting to which it relates.
4.5Subject to Paragraph 4.6 below, the Half Year Review and Annual Reconciliation Meeting will decide:
(a)whether any failure to achieve Performance Band A or B for a KPI by the Contractor is to be excluded from the overall Performance Band;
(b)whether or not any failure to comply with KPIs has been caused by the Contractor’s:
(i)poor performance; and/or
(ii)breach of this Agreement; and/or
(iii)clinical performance;
(c)whether the Contractor's performance necessitates the implementation of remedies in accordance with Paragraph 6 of this Schedule 7; and
(d)whether any changes should be made to the operation of this Agreement to achieve an improvement in the provision of the Services, and if so, how such changes could be made (including through the use of Schedule 8 (Change) where appropriate).
4.6The Contractor shall comply with and implement or procure the implementation of all of the requirements of any Rectification Planas agreed at a Half Year Review and Annual Reconciliation Meeting or otherwise determined. The costs of a Rectification Plan shall be paid by the Contractor insofar as the Rectification Plan relates to actions to be taken by the Contractor.
4.7If either Partyreasonably considers that the Contractor will not be able to implement all of the requirements of a Rectification Plan, it shall notify the other Party (as appropriate) as soon as reasonably practicable and may review and proposeany modification (including any change to the timescales and/or content of the Rectification Plan). Any modification to a Rectification Plan must be agreed, in writing, by the PCT Agreement Manager and the Contractor. On completion of all actions required by a Rectification Plan, a Rectification Completion Report will be submitted by the Contractor to the next Half Year Review and Annual Reconciliation Meeting, unless otherwise specified in the relevant Rectification Plan.In the event that the Contractor fails to comply with a Rectification Plan then the PCT may at its option elect to issue a Remedial Notice on the Contractor for the breach in accordance with Clause 57.1.
4.8Any dispute about a decision of a Half Year Review and Annual Reconciliation Meeting or the actions of the PCT pursuant to this Schedule 7 may be referred to the Dispute Resolution Procedure.
5.Contractor Self Audit
5.1The Contractor shall (at its own cost) conduct audits of its own data and systems to ensure the accuracy and completeness of the Contractor Performance Data.
5.2Periodic auditsshall be carried out at the Contractor’s discretion provided that Contractor Performance Data for each of the KPIs is auditedat least in respect of one (1)Agreement Month in each Financial Year and that for every Agreement Month the Contractor Performance Data for at least one (1) KPI is audited.
5.3The PCT may conduct an audit of the Contractor's Performance Data from time to time at its own cost in accordance with Clause 39.4 of the Agreement and for this purpose the PCT shall be entitled to have access to the Contractor's Performance Data and related Contractor Systems.
6.Remedies
6.1If the Contractor commits a Contractor KPI Failure then the PCT will be entitled to implement remediesfrom the options given in the Table 6.1 below which it considers proportionate to the nature of the failure by the Contractor.
Table 6.1
Contractor KPI Failure / PCT RemedyFailure to report performance of any KPI / Reduce the individual KPI Performance Band to C as a default
Falsely or inaccurately represent or report the Contractor's performance against any KPI / (i)Recalculate the Performance Payment for the previous twelve (12) months and deduct any over payment from future payments; and/or
(ii)set the affected KPI Performance Band(s) to C as a default; and/or
(iii)serve a Breach Notice or Remedial Notice (as appropriate) upon the Contractor in accordance with Clause 57, and/or
(iv)serve a notice on the Contractor to terminate this Agreement under Clause 56 where the PCT considers that as a result of the breach the safety of Patients is at serious risk if the Agreement is not terminated.
Failure to implement all of the requirements of a Rectification Plan; or
Failure to comply with the KPI(s) which the Rectification Plan was designed to ensure compliance with; or
Failure to achieve at least Performance Band B following completion of the Rectification Plan / (i)set the affected KPI Performance Bands to C as a default; and/or
(ii)serve a Breach Notice or Remedial Notice (as appropriate) upon the Contractor in accordance with Clause 57.
[Subject to Paragraphs 1.13 and 1.14 above][7]Achieving Performance Band C twice for the same KPI in any twelve (12) month period, except where the Performance Band is achieved as a result of a PCT remedy for a Contractor KPI failure / (i)serve a Breach Notice or Remedial Notice (as appropriate) upon the Contractor in accordance with Clause 57; and/or
(ii)serve a notice on the Contractor to terminate this Agreement under Clause 56 where the PCT considers that as a result of the breach the safety of Patients is at serious risk if the Agreement is not terminated.
Annex 1
KPI Performance Summary
[PCT to select relevant KPIs from the bank provided in Annex 1]
Annex 2
KPI Performance Payment Mechanism(Example)
The following example explains how the KPI Performance Summary calculates the Performance Percentage
Example:
%Type of KPI / Ref / Effective Care / [15]% (of bid price)
Individual KPI and associated weighting / 1.01 / % of FP17s for Completed Courses of Treatment that were received at NHS DS within 2 months of the date of Completion of the Course of Treatment / [10]% of Effective Care KPI (i.e. 1.5% of bid price)
Performance Band and corresponding Payment Band % for Agreement Month X / A / 125%
Performance Band and corresponding Payment Band % for Agreement Month Y / B / 100%
Performance Band and corresponding Payment Band % for Agreement Month Z / C / 25%
Individual KPI Performance Percentage =Type of KPI Weighting (15%)XIndividual KPI Weighting 10%)XPayment Band Percentage (125 - 25%)
Performance Band
Example 1 –Performance Band = A for Agreement Month X
Individual KPI Performance Percentage(Effective Care) = 15% x 10% x 125%
= 1.875% of bid price for this KPI
Example 2 –Performance Band = B for Agreement Month Y
Individual KPI Performance Percentage(Effective Care) = 15% x 10% x 100%
= 1.5% of bid price for this KPI
Example 3 –Performance Band = C for Agreement Month Z
Individual KPI Performance Percentage(Effective Care) = 15% x 10% x 25%
= 0.375% of bid price for this KPI
KPI Performance Percentages
If the Contractor achieved Performance Band A for each KPI then the overall Performance Percentage would be 125% which in this example would be 37.5% of the total payments under the Agreement.
If the Contractor achieved Performance Band B for each KPI then the overall Performance Percentage would be 100% which in this example would be 30% of the total paymentsavailable for Performance Payments under the Agreement.
If the Contractor achieved Performance Band C for each KPI then the overall Performance Percentage would be 25% which in this example would be 7.5% rather than the full 30% of the total payments available for Performance Payments under the Agreement.
The above examples assume that no remedies have been applied by the PCT in accordance with Paragraph 6 and also assumes that at least 90% or more of the required number of UDAs have been provided.
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[1] PCT to determine weightings for the categories based upon local requirements.
[2] Note: The Performance Payment here represents 30% of the overall Bid Price (with the Service Payment=51% and the Access Payment=19%) though these percentages are subject to PCT determination. The three elements should together add up to 100% of the Bid Price.
[3] Please note the examples of how this should operate in Annex 1 of Schedule 3
[4] PCT to amend as appropriate to the local scheme
[5] PCT to determine appropriate members of the group depending on local circumstances.
[6] PCTs should note that the Half Year Review and Annual Reconciliation Meeting process does not alter their statutory mid-year review obligations under the provisions of paragraphs 58 and 59 of Schedule 3 to the Regulations.
[7] Include the words in square brackets if Paragraphs 1.13 and 1.14 (relaxation of KPI requirements) are included.