Home Out of Pocket Expenses
Out of Pocket Expenses (OOP) can be claimed in exceptional circumstances on all medicines which are not required to be supplied frequently by the contractor, except products in Category A or M of Part VIII of the Drug Tariff. If a Part VIII Category A or M product has been granted NCSO Status and the prescription has been fully endorsed, the prescription will be processed based on the dispensed item so out of pocket expenses claimed will be reimbursed.
Out of Pocket Expenses can also be claimed on appliances in Part IXB and IXC of the Drug Tariff but cannot be claimed on items in Part IXA or IXR.
Payment for out of pocket expenses will be based on the declaration on the FP34C Submission Document for all contractors priced via CIP. Therefore to ensure correct payment, it is essential that this declaration is completed accurately and clearly. Contractors must also continue to endorse individual prescriptions when making an OOP expense claim for NHS Prescription Services’ audit purposes. Such prescriptions should be clearly marked with an indication that out of pocket expenses are being claimed (the recommended endorsement is ‘XP’) along with information on the amount being claimed and the reason for the claim. Documentary evidence of the claim should not be sent to the NHS Prescription Services, however PSNC recommends that evidence to support the claim, for example the receipt or invoice, is stored in the pharmacy in case of query or investigation.
What can be claimed?
Actual costs incurred in during the process of obtaining specific items to fulfill patient prescriptions can be claimed this includes costs such postage, handling and the cost of phone calls to manufacturers or suppliers to order products.
What can’t be claimed?
Claims cannot be made for expenses which do not pertain to a specific product; this includes costs such as minimum order surcharges and fuel surcharges. These costs are reflected in PSNC's profit monitoring work and are considered in the wider funding arrangements.
Staff time costs can also not be claimed. At present, contractors are spending additional time sourcing certain branded medicines because of problems in the supply chain. PSNC is working to measure these costs so that they are considered in the funding arrangements.
The first 10p of any out of pocket expenses claim is retained by NHS Prescription Services.
What can be done in the event of an administrative error in claiming?
There have been a number of cases where contractors have not endorsed the total value of the claim on the FP34C Submission document, due to staff administrative error. If the out of pocket expense declaration is not completed on the FP34C submission document, contractors will not be reimbursed correctly. Contractors in this situation should contact their PCT to discuss the issue, individual PCTs can at their discretion instruct NHS Prescription Services to make compensatory payments to contractors in the event of administrative error.
What should a contractor do if they suspect incorrect payment?
Staff at NHS Prescription Services manually transcribe the information from the FP34C submission document on out of pocket expenses into their computer system. There have been reports of some errors occurring. The total out of pocket expenses paid is shown on the Schedule of payments. If an error is suspected, contractors should contact the NHS Prescription Services helpdesk for support (0845 610 1171). Note the first 10p of each out of pocket expenses claim is deducted by NHS Prescription Services when making payment. PSNC recommends retaining a copy of the FP34C submission document in the pharmacy in case of later query.
PSNC position on Out of Pocket Expenses
A key problem with the current arrangements is that out of pocket expenses can not be claimed on products in Part IXA of the Drug Tariff including catheters. NHS pharmacy contractors are not contractually obliged to supply appliances that would not normally be supplied in the course of their business. Therefore if a contractor is faced with making a financial loss through dispensing an appliance, they may choose not to dispense it. PSNC strongly believes that to protect patient access to these products, changes should be made to the reimbursement arrangements to allow contractors to claim out of pocket expenses for items in Part IXA and IXR of the Drug Tariff. Or as an alternative solution, the Drug Tariff reimbursement prices for these products should be set in such a way that reflects the distribution costs. PSNC would also like to see contractors reimbursed for the first 10p of every claim.
PSNC has raised these issues frequently with the Department of Health both through the Department’s ongoing review of the reimbursement rules and the recent DH review on the reimbursement arrangements for stoma and incontinence appliances. We are continuing to press for change.
Frequently Asked Questions
In what circumstances can Out of Pocket Expenses be claimed?
Out of Pocket Expenses (OOP) can be claimed in exceptional circumstances on all medicines except products in Category A or M of Part VIII of the Drug Tariff. If a Part VIII Category A or M product has been granted NCSO Status and the prescription has been fully endorsed, the prescription will be processed based on the dispensed item so out of pocket expenses claimed will be reimbursed. Please note that if the prescription has no NCSO endorsement the contractor will be paid for the Part VIII item and Out of Pocket Expenses will not be paid.
Out of Pocket Expenses can also be claimed on appliances in Part IXB and IXC of the Drug Tariff but cannot be claimed on items in Part IXA or IXR.
What types of expenses can be claimed?
In exceptional circumstances, pharmacy contractors can claim for any expenses incurred in obtaining a product, for example postage and packaging and wholesaler handling charges. Pharmacy contractors can also claim the rental incurred in supplying oxygen cylinders (other than cylinders listed in the Drug Tariff).
Pharmacy contractors cannot claim for minimum order charges, telephone calls with the prescriber or monthly fuel surcharges applied by wholesalers.
The first 10p of every claim is subtracted by the NHS Business Services Authority.
I have obtained a product from another pharmacy. This was sent by taxi – can I claim this?
Yes, where in exceptional circumstances, products need to be obtained from another pharmacy to support patient care, the expenses incurred can be claimed. This may include taxi fares or postage and packaging.
How should I make the Claim?
Prescriptions should be clearly marked with an indication that out of pocket expenses are being claimed, information on the amount being claimed and the reason for the claim (e.g. "postage & packing"). Documentary evidence of the claim should not be sent to the NHS Business Services Authority.
As good practice, documentary evidence of the claim (e.g. the receipt or invoice) should be stored in the pharmacy in case of query or investigation. Invoices or copies of invoices should not be sent to the NHS Business Services Authority. The NHS Business Services Authority is moving towards the increased use of high speed scanners. Documents submitted to the NHS Business Services Authority together with prescriptions will in the future greatly decrease the efficiency of the prescription pricing process.
Pharmacy contractors are also required to declare the total number and value of out of pocket expense claims each month on the FP34C Submission Form.
If a prescription with an OOP Expense Claim is returned, should I declare the value of the claim again when re-submitting the prescription?
The out of pocket expense claim should be excluded from the declaration on the FP34C Form when the prescriptions are resubmitted to the PPA. For support on this issue, please contact the PSNC Information Team (01296 432823 /info@psnc.org.uk)
I have received a prescription for a Drug Tariff listed appliance, ‘Speedicath catheter'. I can order the product as a special order from my wholesaler but will incur a handling charge. Can I claim this as an out of pocket expense?
No. Catheters are listed in IXA (the Appliance section) of the Drug Tariff. Out of pocket expenses cannot be claimed against appliances listed in Part IXA or IXR of the Drug Tariff or against Category A and M drugs listed in Part VIII of the Drug Tariff.
An alternative would be for the pharmacy to order the product direct from the manufacturer, Coloplast without any additional charges however, Coloplast's terms require that pharmacies order the product direct using a credit card. Alternatively, they can provide a pro-forma invoice but will not dispatch the product until payment is received.
NHS pharmacy contractors are not contractually obliged to supply appliances that would not normally be supplied in the course of their business. Therefore if a contractor is faced with making a financial loss through dispensing an appliance, they may choose not to dispense it. PSNC strongly believes that changes should be made to the reimbursement arrangements to allow contractors to claim out of pocket expenses for items in Part IXA and IXR of the Drug Tariff. Or as an alternative solution, the Drug Tariff reimbursement prices for these products should be set in such a way that reflects the distribution costs.
To support contractors in making an informed choice on whether to supply a particular Part IXA appliance against an NHS prescription, the details of appliances that incur a charge which PSNC most frequently receives calls about can be found in the online Drug Tariff Resource Centre on the PSNC Website (www.psnc.org.uk/resourcecentre).
The Department of Health have confirmed that they will shortly be consulting again on the arrangements for the provision of stoma and incontinence appliances - and related services - in Primary Care. The consultation will be launched in May and will run for 12 weeks.
My wholesaler has introduced a monthly fuel surcharge. Can I claim this back as an 'Out of Pocket' Expense?
No. The Drug Tariff (Part II, Clause 12) states that pharmacy contractors can claim for out of pocket expenses:
'where, in exceptional circumstances, out of pocket expenses have been occurred in obtaining a drug, appliance or chemical reagent other than those priced in Part VIII category A and M and Part IXA and Part IXR of the Tariff and are not required be frequently supplied by the contractor'.
As wholesaler fuel surcharges are levied once a month to customer accounts, this does not relate to a specific product, therefore it is not possible for pharmacy contractors to claim this fee back under the 'Out of Pocket Expense' arrangements.
PSNC has had discussions with the Department of Health on this issue. We are working to ensure that fuel surchages are considered as part of the annual funding discussions.
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