Loss Of MPIG Will Hit Small Practices Hardest

The Government’s plans to phase out the Minimum Practice Income Guarantee (MPIG) will hit smaller and multi-site practices hardest and could lead to many practices closing.

As of April 2014, the MPIG will begin to be gradually phased out over seven years and the system will be replaced with ‘equitable core funding’. At the moment, around 65 percent of UK practices on general medical services (GMS) contracts rely on MPIG top-ups to core pay to maintain the levels of funding they received before the 2004 contract took effect.

The new plan was outlined by the Department of Health at the end of October and will move all practices to a common capitation price, based on current average expenditure on the global sum, correction factor payments under MPIG, and basic elements of personal medical services (PMS) funding.

The MPIG was originally agreed by the GPC and the Labour Government in 2004 to ensure financial stability and continuity of care when the new GMS contract came in, but successive governments have for a long time tried to phase out the payment on the grounds that it is inequitable to some practices.

However, the Government says that when the MPIF is withdrawn, 50 percent of practices will gain income, although the other half will lose anything from “a few hundred to thousands of pounds”.

Critics say that the withdrawal of MPIG will change general practice in England, as small practices will gradually disappear and many practices will join together or be absorbed into larger units. But many practices will welcome the move towards the equitable funding, as it will make payments to practices fairer.

However, a spokesman for the Department of Health has said that the discussions between NHS Employers and the General Practitioners’ Committee remain unresolved on the matter.

As an accountant; David Jacobs offers a range of accounting, audit and taxation advice to the legal and medical professions.

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