Standardised Maternity Contracts To Be Introduced

THERE will be minimal disruption to the maternity sector as a standard contract for Lead Maternity Care providers is introduced the Ministry of Health announced today.

Maternity Manager Barbara Browne said moving providers to one contract will see an end to price inequities and ensure women have a service that is of a similar quality regardless of where they live.

At present 70 per cent of primary maternity services are provided under national arrangements known as Section 88 of the New Zealand Public Health and Disability Act 2000. However 20 provider groups have other non-standard types of contracts and the Ministry of Health pays them differently - sometimes more - for the service.

"The Ministry of Health could not justify continuing to pay different rates for the same services and now the contracts will be standardised," Ms Browne said.

"Today's decision provides the mechanism for achieving price equity within two years using a two-stage approach."

"The first stage is to move all providers to the Section 88 contract. In an effort to reduce disruption to the sector during this stage a short term transitional monthly payment will be made to non-section 88 Lead Maternity Care providers allowing them to retain any difference in revenue between their current contract and a contract under Section 88."

"The second stage is to move to equity by reducing the monthly transitional payments where there is a corresponding increase to Section 88 prices. The Government has set aside $3.7 million for the Section 88 price increase and hopes to identify further revenue as soon as possible."

"This is the fairest way to contract with maternity services providers and ensure consumers continue to have free access to maternity services that are of a similar quality around the country."

Ms Browne said the Ministry of Health would make additional payments where appropriate to providers who offer services over and above those in the standard contract.

Background

How was today's decision reached? During May and June this year the Ministry of Health entered into a period of consultation with maternity providers on the following proposal: "Should the Ministry of Health move to a standard national primary maternity contract (being the Section 88 Maternity Notice) while explicitly recognising additional needs through separate contract arrangements?"

Twenty-seven organisations including the twenty non-section 88 providers, the New Zealand Medical Association and the New Zealand College of Midwives were consulted and nearly all of them made submissions. Also, 42 other letters were received from other individuals or organisations

Following the consultation the Ministry of Health conducted a financial analysis and came to the following decision:

The Section 88 Maternity Notice will be recognised as the standard contract for LMC providers All non-section 88 LMC providers will be moved to the Notice with this change occurring by 1 May 2002 A transitional payment will be made to non-section 88 LMC providers allowing them to retain any difference in revenue between their current contract and the Notice An implementation plan will be developed in consultation with the providers to effect this change Price equity will be achieved over time by reducing the transitional payment where there is a corresponding increase to the prices in the Notice Devolution of LMC contracts to District Health Boards will occur when the price equity has been substantially achieved

What was the difference between providers on the Section 88 arrangements and those on the non-standard arrangements?

A primary maternity provider currently working under a Section 88 notice offers specified lead maternity care and other primary maternity services. Providers on the non-standard contract offer similar services but they may be specified differently - thus making them difficult to compare. There are differences in prices, payment rules and reporting processes.

Why did the Ministry want the 20 providers to sign up with the standard Section 88 contract?

1)Currently, data from most non-section 88 providers cannot be used in the national information system due to it being insufficient, poor or uncertain quality. The Ministry of Health needs all information to be collected in the same way so it can obtain a national view on what is happening in maternity services.

2)The Ministry of Health wants to ensure there is an across-the-board system for processing and checking payment claims made by the providers to the Ministry of Health. All the different contracts make the current payment and audit process very complex.

3)Currently the Ministry of Health pays providers on non-standard contracts more money even if they are in fact providing the same service as everyone else. It is fair and reasonable to pay the same price for the same service.

What will the changes mean for mothers-to-be? The Ministry of Health will continue to pay for primary maternity services to be available to mothers throughout the country. Under the changes the Ministry will be better able to ensure that mothers will get the same quality service no matter where they live in New Zealand. Increases in funding announced in the budget will improve payment rates under the standard contract and help to retain practitioners everywhere.

Will mothers to be still be able to access shared care? There are doctors and midwives who offer shared care under Section 88 at present and these same arrangements can be operated by any other groups who are willing to do so.

Can an organisation (a group of maternity practitioners) operate under the Section 88 Notice? Yes, and there are already organisations doing this.

Could there be a loss of practitioners to the service? Practitioners who do not currently operate under Section 88 will not be paid less when they shift to the Notice because of the transitional payments. Increases in funding announced in the budget will improve payment rates under the standard contract and help to retain practitioners everywhere. The Government set aside $3.7 million for the Section 88 price increase and hopes to identify further revenue as soon as possible.

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