From April 2014, sector regulator Monitor and the NHS Commissioning Board (NHSCB) will take over responsibility for pricing NHS services from the DH through the national tariff. The DH has now launched a consultation on proposals for objecting to a proposed pricing methodology used by Monitor in setting the new national tariff. Under the Health and Social Care Act 2012, if a certain number of commissioners and/or service providers object then Monitor must either reconsider its pricing methodology or refer the matter to the Competition Commission for determination.

The DH is now consulting on setting the thresholds for triggering this objections process. It is proposing that the objection percentage thresholds be set at 51 per cent of the total number of commissioners and 51 per cent of the total number of providers (both unweighted and by share of supply).

According to the Government, an effective pricing system is critical to achieving value for money, and the national tariff will include prices for specified services or bundles of services, delivered to prescribed standards.

However, "it is not about the cheapest price. It is about paying a fair price for the services patients want, delivered to high standards," the DH stressed.

The consultation is open until 21 December 2012.

Monitor’s duties will include developing the methodology for setting prices, setting out the prices, and setting the rules for local price setting, where services are not included in the national tariff.

Commissioners will describe "what currencies [the unit of reimbursement for services] they will need in contracting for health services, while ensuring these are aligned with their priorities for service improvement.”

The NHSCB will be responsible for defining the scope of the tariff, determining currencies, and setting rules to variations to the tariff.