Home Out of Pocket Expenses
Part II Clause 12 of the Drug Tariff sets out the out of pocket expense arrangements. Out of Pocket Expenses (OOP) can be claimed, where in exceptional circumstances, the contractor has incurred expenses in obtaining a drug, appliance or chemical reagent other than those listed in Part VIIIA Category A or M, Part VIIIB, Part IXA and Part IXR of the Drug Tariff and where the product is not required to be frequently supplied by the contractor.
If a Part VIIIA 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.
Actual costs incurred during the process of obtaining specific items to fulfil specific prescriptions can be claimed. This includes costs such as postage, handling and the cost of phone calls to manufacturers or suppliers to order products. It is important that any charges incurred can be linked back to an order for a specific product on a specific prescription.
Recently, there has been an increase in suppliers levying charges where a minimum spend threshold has not been met. Where it is not possible to avoid incurring a minimum order surcharge, PSNC's view is that this could be claimed as an out of pocket expense, but only in exceptional circumstances. Where a contractor can reasonably be expected to routinely order a range of low volume products from a wholesaler, in order to bring their value of purchases above the minimum threshold, our advice is that they should attempt to do this, as there is a substantial risk that routine orders would not satisfy the description of 'exceptional circumstances'.
We have been asked about the situation where a small order charge was imposed due to a mistake at the pharmacy, in ordering from the wrong wholesaler. It is highly unlikely that a PCT would accept that such a mistake should be treated as grounds for making a claim for out of pocket expenses incurred.
It is important that contractors have clear, auditable procurement policies in place in order to demonstrate that minimum order surcharges or delivery charges are avoided where possible.
Frequently Asked Questions
How should I make the Out of Pocket Claim?
Payment for out of pocket expenses is based on the declaration on the FP34C Submission Document. 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.
Note, the first 10p of any out of pocket expenses claim is retained by NHS Prescription Services.
Can I claim staff costs as an out of pocket expense?
No, staff costs should not be claimed as an out of pocket expense. A current issue is the branded medicine supply problems. Community pharmacists work extremely hard to ensure patients get the medicines they need; where shortages occur this often involves spending additional hours sourcing required products from wholesalers and manufacturers. The 2009/10 funding settlement recognises and allows for costs associated with this time and resource.
Can I claim a minimum order surcharge?
Where it is not possible to avoid incurring a minimum order surcharge, PSNC's view is that this could be claimed as an out of pocket expense, but only in exceptional circumstances. Where a contractor can reasonably be expected to routinely order a range of low volume products from a wholesaler, in order to bring their value of purchases above the minimum threshold, our advice is that they should attempt to do this, as there is a substantial risk that routine orders would not satisfy the description of 'exceptional circumstances'.
We have been asked about the situation where a small order charge was imposed due to a mistake at the pharmacy, in ordering from the wrong wholesaler. It is highly unlikely that a PCT would accept that such a mistake should be treated as grounds for making a claim for out of pocket expenses incurred.
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.
I have heard that I can claim ‘Out of Pocket Expenses’ for incontinence appliances – is this correct?
Part II Clause 12 of the Drug Tariff sets out the out of pocket expense arrangements. Out of Pocket Expenses (OOP) can be claimed, where in exceptional circumstances, the contractor has incurred expenses in obtaining a drug, appliance or chemical reagent other than those listed in Part VIIIA Category A or M, Part VIIIB, Part IXA and Part IXR of the Drug Tariff and where the product is not required to be frequently supplied by the contractor.
Whilst out of pocket expenses can be claimed when dispensing those products in the ‘incontinence appliances’ section of the Tariff (Part IXB), it is not possible to claim out of pocket expenses when dispensing catheters as they are listed in Part IXA of the Drug Tariff.
What should I do if I can't obtain a Part IXA or IXR Appliance without out of pocket expenses?
Out of pocket expenses cannot be claimed for appliances in Part IXA or IXR of the Drug Tariff.
Where a Part IXA appliance is not available from your normal wholesalers without additional charges, it is worth contacting the manufacturer and finding out who they supply to and whether it is possible to obtain the product directly without charge.
In order to list a product in the Drug Tariff, manufacturers must declare that their product "will be readily available to dispensing contractors either through the normal wholesale network or on equivalent terms" so if a product is unavailable without additional charges from either the manufacturer or the wholesale network, the manufacturer may not be meeting the requirements for their product to remain listed in the Tariff. Please report any products in this scenario to the PSNC Information Team (0844 381 4180) who will escalate this to NHS Prescription Services.
Whilst a problem is being looked into, as it can take some time, it may be worth talking to the PCT as we are aware that in some areas, to ensure patient access to affected appliances, PCTs have agreed to make discretionary payments to cover the difference between the costs incurred in obtaining a particular appliance and the reimbursement.
Another alternative is to discuss the problem with the prescriber and consider requesting a new prescription for an equivalent product which is available without additional charges.
As a last resort, 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.
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.
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 (0844 381 4180 or you can email info@psnc.org.uk).
My wholesaler has introduced a monthly fuel surcharge. Can I claim this back as an 'Out of Pocket' Expense?
As wholesaler fuel surcharges are levied once a month to customer accounts, this does not relate to a specific product or order, 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 surcharges are considered in the general funding arrangements.
I have had to obtain a product using my wholesalers ‘specials obtain’ service. My wholesaler has offered to provide me with a quick payment discount on the invoiced handling charge. When claiming back the cost of the handling charge from the NHS under the out of pocket expense arrangements, should I claim the cost before or after the quick payment discount has been applied?
Part II Clause 12 of the Drug Tariff sets out the out of pocket expense arrangements. Out of Pocket expenses (OOP) can be claimed, where in exceptional circumstances, the contractor has incurred expenses in obtaining a drug, appliance or chemical reagent other than those listed in Part VIIIA Category A or M, Part VIIIB, Part IXA and Part IXR of the Drug Tariff and where the product is not required to be frequently supplied by the contractor.
Pharmacies are only entitled to claim the expenses that have actually been incurred therefore the pharmacy should claim the cost of the handling charge after quick payment discount has been applied.
Payment for out of pocket expenses is based on the declaration on the FP34C submission Document. Contractors must also 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 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.
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