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LPS / ESPLPS

Since Local Pharmaceutical Services (LPS) contracts were introduced a number of years ago, as an alternative to the national contractual framework, a number of developments have occurred in the proposed use of LPS contracts.

PSNC and the Department of Health agreed as part of the new contract negotiations that LPS contracts would be used as the basis to provide support to exisiting ESPS pharmacies and also to some pharmacies that are dispensing low volumes of prescriptions.

The Pharmacy White Paper - Pharmacy in England Building on strengths – delivering the future published in April 2008 also proposes that Local Pharmaceutical Services may be a mechanism to allow Primary Care Trusts to commission services locally, where the services do not fit neatly within the national framework.

Details of the different emerging forms of LPS can be found below.

NOTE: LPS arrangements do not apply in Wales - the contents of this page apply to England only

LPS

In April 2006, the former LPS Pilot Schemes were replaced when Regulations were introduced providing for permanent arrangements.  The Regulations are accessible on the website of the Office of Public Sector Information.  Click the following link to access the 2006 Regulations.

LPS Regulations 2006

The Department of Health has issued guidance on the LPS Regulations, which can be accessed on the link below:

Department of Health Guidance on LPS

In May 2009 the Department of Health issued a template for a model contract for LPS for PCT consideration for use when commissioning these services. The template reflects the mandatory terms for any LPS contract and can be accessed on the link below

LPS Model Contract

For more information or support on Normal LPS, please contact Barbara Parsons at PSNC's Aylesbury Office (01296 432823).

Low Volume LPS

PSNC discussed with the Department of Health and the NHS Confederation  the development of Low Volume LPS (LVLPS) for low volume contractors. A LVLPS contract can specify services to be provided by a low volume pharmacy in order to meet local needs for which the pharmacy would receive increased payment levels.

Subject to the agreement of the PCT, this enables a low volume pharmacy providing valuable services to its patients to continue to remain viable, after the protected professional allowances ended on 31 March 2008.

The Department of Health prepared detailed guidance on the new LPS arrangements which commenced in April 2006 (see link above). A LVLPS contract could be made under these new regulations and PSNC with the assistance of London LPCs proposed a number of additional services that might be useful in meeting the needs of the local population for which LVLPS contractors would receive additional funding to offset the loss of the protected professional allowance. The guidance draws attention to the benefits of LVLPS as a means of continuing provision of pharmaceutical services after the protected payments ceased.

The Department of Health wrote to all PCTs in March 2007 to remind them that the Protected Professional Allowance would be withdrawn after 31 March 2008, and indicated how PCTs might identify those pharmacies. The letter stated that PCTs might wish to consider whether further action is required to secure the adequate provision of pharmaceutical services in areas served by pharmacists affected by the cessation of Protected Professional Allowance payments.

Affected pharmacy contractors should also identify for themselves, what services they are currently not providing, but which could be of interest to the PCT in meeting local needs.

PSNC encourages Pharmacy Contractors to contact their LPC who will be able to offer guidance, particularly if there are local unmet needs, and can also provide contact details for relevant staff at the PCT.

For more information on the Low Volume LPS, please contact Barbara Parsons at PSNC's Aylesbury Office (01296 432823).

ESPS - ESP LPS

PSNC and the Department of Health agreed that an LPS contract would replace ESPS from 1st April 2006.

This new ESP LPS has been developed through negotiation by PSNC with the Department of Health and the NHS Confederation.

Click on the link below to access the Department of Health website, from where copies of the ESP LPS Direactions sent to PCTs in England about the implementation of the Essential small pharmacies (ESP) pilot scheme and the ESP Local pharmaceutical services (ESPLPS) agreement can be downloaded:

Essential Small Pharmacy LPS Directions

From the July 2008 edition of the Drug Tariff, there will be amendment of the reference to the Essential Small Pharmacy Scheme.

This follows the Department of Health informing the NHSBSA of the discontinuation (in England) of the Essential Small Pharmacy Scheme, which came to an end in 2006, when eligible pharmacies transferred to the ESPLPS.  The Essential Small Pharmacy Scheme continued on a transitional basis for those pharmacies that had formerly been eligible for the ESPS arrangements, but no longer satisfied the criteria for the Essential Small Pharmacies (for example, those dispensing less than 500 items a month who were no longer identified as special consideration cases by the PCT).

The discontinuation of the ESPS arrangements have no impact on pharmacies that are contracted under the Essential Small Pharmacy LPS arrangements, which continue under the contracts agreed from 1 April 2006.

The Essential Small Pharmacy Scheme continues in Wales.
 
For more information or support please contact Steve Lutener at PSNC's Aylesbury Office (01296 432823)

ESPS/ESP LPS FAQs

1. I have heard that ESPS stopped in March 2006, is that correct?
Yes. The Essential Small Pharmacy Scheme ended on 31 March 2006, and was replaced by the Essential Small Pharmacy Local Pharmaceutical Services scheme (ESPLPS) from 1 April 2006. In many respects the ESP LPS scheme is the same as the ESPS arrangements.

2. I have opened a pharmacy since 1 April 2006 and I would satisfy the ESPS criteria. Can I claim ESPS payments.
No. The ESP LPS which replaced the ESPS arrangements was available only for pharmacies that applied by 31 October 2005.

3. If I did not apply for ESP LPS, is there any other means of receiving financial support for my business?
First, you should ensure that you are maximising the potential of the existing contractual arrangements - Are you providing Medicines Use Reviews? A pharmacy undertaking the maximum number of 400 MURs can receive fees up to £11,200 per year. Have you identified any Enhanced services that the PCT might want to commission? Your Local Pharmaceutical Committee will be able to advise on the possibility of contracting to provide Enhanced services. Subject to the agreement of the PCT, it may be possible to convert to an LPS which can be used now, to provide a range of services not currently provided in the national pharmacy contractual framework.

4. When will the LV LPS guidance be available for low volume pharmacies?
The guidance (which covers the whole of the LPS system, not just the LV LPS) has been published by the Department of Health - see link above.

5. What are the Protected Professional Allowances and what was the change in March 2008?
The Protected Payments were available to certain pharmacies that were in receipt of the Payment for Additional Professional Services during the year ending 31 March 2005. It is not available for pharmacies that opened after 1 April 2005. Full details are given in Part VIA of the Drug Tariff.

A pharmacy dispensing at least 1600 prescriptions but less than 2120 prescriptions per month was entitled to £1500 per month. This payment was withdrawn after the three year transitional period, which ended on 31 March 2008.

6. I have an ESP LPS contract. Will this have stopped in March 2008?
ESP LPS terms are set out in binding contracts, signed by individual contractors and PCTs before the ESP LPS arrangements came into effect on 1 April 2006. The model contract provided for a duration for the contract of 5 years, so check your own contract to see if the same duration is specified. If so, the ESP LPS contract will operate until at least 2011 unless the pharmacy becomes ineligible (for example if the prescription threshold is exceeded).

The Department of Health and PSNC will discuss renewal rights for ESP LPS contracts in due course.

Under the model ESP LPS contracts the pharmacy is entitled to top up payments up to a target payment, which can be considered to be guaranteed income irrespective of changes to individual elements of the funding - such as fees and allowances.

7. I have an ESP LPS contract. Did the discontinuation of the Protected Professional Allowance in March 2008 affect the target payment?

You will need to check the contract you signed with the PCT.

Under the ESP LPS arrangements, negotiated between PSNC and the Department of Health, it is intended that adjustments are made to actual income from fees and allowances so that the pharmacy receives the target payment. It follows that if the total fees and allowances are less than the Target Payment, there will be a top up payment to the Target. If the pharmacy was in receipt of the Protected Professional Allowance, then when this element of funding ended in March 2008, the top up payment will be greater, to offset the loss, and so the Target Payment will still be achieved.

Although this is the intention behind the funding of the ESP LPS pharmacies, some contractors may have signed contracts with their PCTs that differed from the national templates. If so, the contract should be checked, to ensure that the payment of fees and allowances, and top up to Target Payments follows the arrangements negotiated between PSNC and the Department of Health.

Updated 6 April 2010

More Information on LPS

For more information on Normal LPS and Standard Form LPS, please contact Barbara Parsons at PSNC's Aylesbury Office (01296 432823)

For more information on ESP LPS, please contact Steve Lutener at PSNC's Aylesbury Office (01296 432823).