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Payment by results system improves, auditors find

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The accuracy of a key component of the health service’s payment by results system has improved since 2007-08, according to a report from the Audit Commission.

Health reporting HSJ and LGC logo

The body found the overall national average error rate in the Healthcare Resource Group system that underpins tariff had fallen from 9.4% in 2007-08 to 7.5% in 2011-12, LGC’s sister publication Health Service Journal reports.

The HRG system bands together different procedures by cost to determine what price providers should charge for them. Errors could see commissioners being over- or under-charged.

Despite the improvement, the report said “overall progress was disappointing”, with less than half of trusts “making satisfactory progress on recommendations following outpatient data audits”.

The Audit Commission estimates there were between £600m and £700m of over- and under-payments across the country in 2011-12 and acute trusts were underpaid by a net total of approximately £60m.

The commission’s head of Health Andy McKeon said: “Payment by results can only ever be as good as the data that underpins it. We have found the overall picture to be one of gradually improving quality and accuracy.

“But health service providers can still do more to improve data quality. It was disappointing that only half of trusts had made good progress in implementing previous audit recommendations.”

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