“Switching” of prescriptions occurs if the PPD does not agree with the charge group (paid or exempt) in which a prescription is submitted. For forms submitted as exempt: if a declaration of exemption by the patient (or their representative) is required, but is not provided, the PPD deducts a prescription charge from a contractor’s payment for each item on that form. For forms submitted as chargeable: if the PPD detects a completed declaration of exemption charges are not deducted for the items on that form.

Investigations by the PPD and the Pharmaceutical Services Negotiating Committee have revealed that the majority of the prescriptions “switched” did not have completed declarations of exemption on the prescription forms. The PPD legacy pricing system was less successful at identifying these forms and therefore contractors had not been alerted to these problems prior to CIP implementation. In addition, instances of PPD “switching” forms in error due to systems failure have been identified.

PPD, the Department of Health and PSNC have agreed compensation arrangements for any error due to PPD system failure and as a concession for contractors who may not have been aware of flaws in their own business processes for checking declarations of exemption on prescription forms, for the period to the end of December 2007.

Each contractor will receive a payment of 90% the difference in the NHS charge values deducted due to the difference in average switching rates between legacy and CIP processes for each month that a pharmacy's prescriptions were processed through CIP until December 2007. This calculation will be specific to each pharmacy, based on the number of prescriptions switched by CIP in each month. The payment will reach contractors in early September 2008.

The compensation payments will exclude from the calculations months where PPD has already checked the switching and made adjustments to payments. The level of compensation recognises the delays in payment reaching contractors. PPD , the Department of Health and PSNC hope to reach agreement on arrangements for the early months of 2008 shortly.

It is essential that all contractors review their processes for ensuring that patient declarations are completed correctly. Further guidance is available on the PPD and PSNC web sites. There will be no concession made for patients’ failure to endorse for prescriptions submitted dispensed from 1st June 2008. PPD and PSNC will continue their work to audit the accuracy of the CIP system.