Introduction

1. For the financial year 2023/24 all primary care dental services have returned to usual contracting arrangements and all income protection arrangements have ended.
2. This guidance sets out the arrangements and principles for 2023/24 year-end reconciliation across general dental service contracts (GDS) and personal dental services agreements (PDS) within England, to support commissioners in fulfilling their responsibilities within the required timescales.
3. This guidance should be considered alongside the Policy book for primary dental services.

Roles and responsibilities

Role of the commissioner

4. To be the local decision-maker when required and to provide all necessary and relevant information to NHS Business Service Authority (NHSBSA) in a timely manner. A failure to provide information to NHSBSA within the relevant timescales set out in Appendix 1 will delay publication of the integrated care boards’ (ICBs’) year-end letters.

Role of NHS Business Service Authority

5. To support local commissioners with calculating and concluding contractor’s year-end position, within the nationally agreed governance process.

Definition of terms

6. The terms as used in this guidance are defined as follows:

• performance threshold – the 96% performance tolerance of contracted UDAs for all contracts delivering mandatory services and of UOAs for contracts delivering orthodontic services
• negotiated annual contract value (NACV) – the annual payment paid to the contractor in respect of agreed number of UDAs and UOAs to be delivered over a financial year
• scheduled activity – actual activity delivered
• adjusted scheduled activity – activity delivered that has been adjusted to reflect any carry forward
• total contracted units of dental activity (UDAs)/orthodontic activity (UOAs) – the number of UDAs/UOAs contracted to be delivered over a financial year
• carry forward activity – the number of UDAs/UOAs carried forward from the previous financial year(s)
• category 1 contracts – NHSBSA is responsible for year-end annual reconciliation of these contracts where details recorded in Compass are up to date and accurate. Commissioners must confirm these contracts by 31 May 2024
• category 2 contracts – NHSBSA is responsible for year-end annual reconciliation of these contracts where the commissioner has supplied additional information to NHSBSA. Commissioners must confirm these contracts and commissioning arrangements by 31 May 2024
• category 3 contracts – commissioner is responsible for the year-end annual reconciliation of these contracts and confirming delivery position. NHSBSA is responsible for checking year-end annual reconciliation has taken place.

Arrangements for reconciling year-end activity

Measurement of contract delivery

7. To reflect that all contractors have returned to usual contracting arrangements, all contractors will now receive a single year-end position that includes any carry forward activity.
8. For the avoidance of doubt activity delivered by any dental foundation trainees will not count toward the scheduled activity of the trainer’s mandatory services contract during 2023/24.

Carry forward of activity from previous year(s)

9. Carry forward of underdelivered activity (UDA/UOA) from previous financial years will be added to the overall contractual requirement for 2023/24 and is deemed to have been delivered within the first 60 days.
10. This includes carry forward for contractors that benefited following the announcement in June 2023 of a one-off reduction in the performance threshold to 90% (or 80% for practices that had previously exited the prototype arrangements). A worked example is given in Appendix 2.
11. Carry forward of over-delivered activity (UDA/UOA) will be deducted from the overall contractual requirement for 2023/24.

New Patient Premium

12. As part of the NHS and government’s dental recovery plan, a New Patient Premium (NPP) scheme started on 1 March 2024 and will run until 31 March 2025.
13. Participating practices will receive a nominal credit of UDAs equivalent to:

• £15 for new patients requiring only band 1 care
• £50 for each eligible new patient requiring a band 2 or 3 treatment

14. To correctly reconcile the contract in the year-end reconciliation, any eligible credits received under the NPP scheme will be deducted from the overall contractual requirement for the financial year that the credits relate to.
15. Any treatment started in March 2024, completed by 31 March 2024 and received within NHSBSA by 31 May 2024 will count toward the financial year 2023/24 in line with normal reporting procedures.
16. Where a contractor delivering mandatory services is eligible to receive credits under the NPP scheme, the credits will be shown separately on the monthly electronic schedules sent to practices.
17. Any eligible credits received during March 2024 under the NPP scheme will contribute toward contractual requirements for 2023/24; however, they cannot have the effect of taking a contractor above 100%. If a commissioner agrees during the year to fund additional activity – for example, up to 110% – then NPP credits will be available up to this new agreed level. Worked examples are included in Appendix 2.

Year-end reconciliation outcomes for contracts delivering mandatory services and orthodontic services

18. Where a contractor has failed to deliver 4% or less of the total contracted activity, this shortfall will be entered onto the payment system and carried forward into 2024/25 contractual requirements.
19. Where a contractor has delivered less than 96% of the contracted activity, the commissioner will recover the full amount of money (the overpayment to the contractor in respect of the activity delivered under the contract) up to the full annual contract value.
20. Where a contractor has delivered over 100% of the contracted activity, the commissioner may allow a tolerance of up to 2% of UDAs or UOAs per year (therefore a maximum of 102% of the contracted UDA/UOA activity). The commissioner may also allow for carry forward/payment of up to 104% of the contracted UDA and/or UOA activity delivered under pre-approved oral health programmes.
21. Where commissioners have the resources and have reached prior agreement with the contractor, contractors may be remunerated up to a maximum of 110% of the contract value/activity at the contract indicative UDA/UOA rate for 2023/24.
22. During the process to categorise contracts commissioners will have the opportunity to confirm local over-delivery arrangements and supply any necessary information to NHSBSA by 31 May 2024. This information includes whether over-delivery up to 110% is part carry forward (up to 2%) instead of a full payment where this has been agreed with the contractor.

Year-end reconciliation outcomes for contracts delivering domiciliary and sedation services

23. Underperformance of contract delivery for courses of treatment (COTs) for domiciliary and sedation services is set out in the Policy book for primary dental services.
24. Where the contract details the financial sum payable in respect of the domiciliary and sedation services and these are not provided by the contractor in the relevant financial year, the commissioner may seek to recover the overpayments. Where the contractor fails to provide the contracted number of COTs the commissioner may serve a breach notice to the contractor.
25. Overperformance for COT activity for domiciliary and sedation services is not carried forward or paid unless specified in the contract. If overperformance is specified in the contract, the commissioner must provide this information to NHSBSA by 31 May 2024.

Community dental services and tier 2 and 3 services

26. Community dental services and tier 2 and 3 services are usually Category 3 contracts and commissioners will have local commissioning and monitoring arrangements with contractors delivering these services.
27. Commissioners continue to be responsible for the year-end reconciliation of category 3 contracts as referenced in paragraph 8.2.2: Categorisation of the Policy book for primary dental services.

Exceptional circumstances

28. The established process outlined in chapter 14: Adverse events of the Policy book for primary dental services should be followed in instances when a contractor is unable to fulfil its requirements to deliver the annual contracted activity due to an adverse event.
29. The commissioner will have regard to the circumstances listed in Annex 8.10 of the Policy book for primary dental services – Appendices.
30. Contractors are contractually required to inform the commissioner at the earliest opportunity if they feel that any contractual conditions cannot be met due to exceptional circumstances.
31. Contractors are also encouraged to work with the commissioner to improve compliance, to improve access and reduce the likelihood of financial recovery measures being implemented.
32. The commissioner will decide whether or not to grant dental relief in respect of a force majeure and exceptional circumstances and its decision must be communicated to NHSBSA by 31 May 2024. If the commissioner does agree to this, the number of unfulfilled UDAs or UOAs to be ‘carried forward’ to the following financial year will be included in the adjusted scheduled activity when a contractor is below tolerance and the outcome communicated in the year-end letter.
33. Any disputed claims should be resolved no later than 5 August 2024 to avoid any impact on the mid-year calculations.

Persistent under-delivery

34. The process for commissioners to assess performance over the course of the relevant 3 consecutive years is outlined in paragraph 8.4.6: Contract variation of value following persistent under-delivery of the Policy book for primary dental services.
35. Regulations that came into force from 1 April 2024 provide the commissioner with the ability to rebase a contract because of persistent underperformance.
36. Commissioners should assess performance over the course of the relevant 3 consecutive years and rebase the contract at the highest level across those 3 years. Where agreement to this cannot be reached, then the commissioner has the ability to take unilateral action to recurrently reduce the annual contract value and associated activity as an alternative to contract termination. However, to do so the commissioner must be able to demonstrate the following:

• the contractor has failed to achieve the activity levels required for contract tolerance in the preceding 3 years, excluding the pandemic years. The qualifying years for calculation are: 1 April 2019 to 31 March 2020 and any years from 1 April 2022 onwards
• there have been no exceptional circumstances as per paragraph 8.4.9 in the Policy book for primary dental services. Where exceptional circumstances do apply in a year, that year should not be taken into account

37. The commissioner must be able to evidence that it has attempted to hold:

• an annual or mid-year review with the contractor for each year of underperformance
• a mid-year review with all contractors who failed to deliver contract tolerance in the preceding year

38. After a rebasing notice is served on the contractor for persistent underperformance, the rebasing date must be no earlier than 1 April of the following financial year. For example, if the rebasing notice is served during financial year 2024/25 then the rebasing date must be no earlier than 1 April 2025.

ICB governance

39. NHS England delegated the commissioning of dental services to ICBs on 1 April 2023.
40. The year-end reconciliation is a national process undertaken by NHSBSA on behalf of ICBs. It remains essential that the local ICB commissioner has ICB governance processes in place for decision-making including the authorisation of contractual sanctions. It is the commissioner’s responsibility to ensure local governance processes are in place and followed, before instructing NHSBSA.

Managing disputes

41. The established process outlined in Chapter 13: Managing disputes of the Policy book for primary dental services should be followed when managing disputes.
42. It is essential that the commissioner maintains accurate and complete written records of all discussions, including notes of telephone calls and correspondence, on the contract file in relation to the dispute and at all levels of dispute resolution. The records should include the dates of communications and who was involved from both parties. The commissioner should ensure that it responds to contractor concerns and communications in a timely and reasonable manner.
43. Most disputes should be resolvable at the informal stage. The formal process should not be initiated until the informal process has been exhausted.
44. The table in Annex 13.1 of the Policy book for primary dental services – Appendices provides the steps to be taken in managing disputes.

Appendix 1: Key timescales

For the commissioner

By 31 May:

• confirm to NHSBSA categorisation of all contracts (category 1, 2 and 3 – see definitions)
• confirm to NHSBSA local arrangements for over-delivery and supply necessary information
• confirm to NHSBSA outcome of claims for relief in respect of a force majeure and exceptional circumstances
• provide NHSBSA with electronic signature and letterhead for year-end letter and breach notices
• include/exclude contracts for breach notices (subject to final delivery)

For NHS Business Service Authority

By 1 May:

• provide details of all contracts to commissioners as part of categorisation of all contracts (including details of persistent underperformance in previous years)

By 30 June:

• all Category 1 and 2 contractors will receive a single year-end position letters in Compass

By 5 August:

• ensure all queries and disputes are resolved

By 30 August:

• publish breach notices in Compass and communicate to contractors

Appendix 2: Worked examples

Example 1: Practice with a carry forward of up to 10% from 2022/23

The contractor (delivering mandatory services) met the 90% performance threshold in 2022/23 so had a carry forward of up to 10%. This has been added to the overall contractual requirement for 2023/24.

The calculation for overall performance is:

• Adjusted scheduled activity / Total contracted UDAs

Example 2: NPP – contractor under delivers on contracted activity

The contractor (delivering mandatory services) has an NACV of 12,000 UDAs, equivalent to £360,000 at a UDA indicative value of £30. It has delivered under the total NACV/contracted UDAs and is eligible for credits under the NPP scheme.

The calculation is:

• credits for New Patient Premium (band 1): £15 / £30 = 0.5 equivalent UDAs x 100 new patients = 50 equivalent UDAs
• credits for New Patient Premium (band 2 and 3): £50 / £30 = 1.67 equivalent UDAs x 50 new patients = 83 equivalent UDAs

Example 3: NPP – contractor under delivers on contracted activity

The contractor (delivering mandatory services) has an NACV of 12,000 UDAs, equivalent to £480,000 at an indicative UDA value of £40. It has delivered under the total NACV/contracted UDAs and is eligible for credits under the NPP scheme.

The calculation is:

• credits for New Patient Premium (band 1): £15 / £40 = 0.38 equivalent UDAs x 100 new patients = 38 equivalent UDAs
• credits for New Patient Premium (band 2 and 3): £50 / £40 = 1.25 equivalent UDAs x 50 new patients = 63 equivalent UDAs

Example 4: NPP – Commissioner has permitted overperformance

The contractor (delivering mandatory services) has delivered above its total NACV/contracted UDAs. The commissioner has permitted overperformance up to 110%, which means that the contractor is eligible for credits under the NPP scheme.

The calculation is:

• credits for New Patient Premium (band 1): £15 / £30 = 0.5 equivalent UDAs x 100 new patients = 50 equivalent UDAs
• credits for New Patient Premium (band 2 and 3): £50 / £30 = 1.67 equivalent UDAs x 50 new patients = 83 equivalent UDAs

Publication reference: PRN01067