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Wednesday, October 12, 2005

Audit Commission - Early lessons from payment by results

Audit Commission - Early lessons from payment by results

The audit commission has released its report on "Early lessons from payment by results" which includes some important lessons for all sectors of the NHS.

In particular the report highlights problems with the quality of data and the mechanisms for recording clinical activity, particularly coding, on which the payments are being made.

"Good information systems that produce high-quality data on clinical activity and cost are important for sound management and delivery of patient care......As part of investment planned under NHS Connecting for Health, a comprehensive electronic Care Records Service should be in place by 2010, which will go some way towards achieving this. However, trusts still need to strengthen their internal arrangements to produce timely and accurate data."

"Coding of diagnoses and procedures is particularly important under payment by results, as these codes are two principal determinants of the HRG that the patient is assigned to, which in turn determines income. Incomplete coding translates to loss of income for trusts, while inaccurate coding leads to inaccurate payments, which can impact negatively on the finances of providers or commissioners.

We have previously highlighted weaknesses in clinical coding at NHS trusts, pointing to significant levels of uncoded activity, outdated patient administration systems and weak coding arrangements. Payment by results provides the incentives to improve data quality and we can already see the increased priority this is being given across the NHS."

As a result of these systems being introduced it appears that the average number of diagnoses recorded for each patient has increaswed significantly. The report also considers moves from ICD10 and OPCS classifications to SNOMED and the disruption involved.

"NHS Connecting for Health will require most NHS trusts to invest in their information systems and migrate data between systems. Several NHS trusts, including foundation trusts, implemented new systems in 2004/05, and found that the level of disruption was greater than expected. In extreme cases, it resulted in no activity information being available for the majority of the financial year. Under payment by results, where income is based on activity levels, this exposes trusts to considerable financial risk. Trusts and PCTs need to be aware of the risk that this presents and, if possible, put in place contingency arrangements to protect against loss of income due to associated data-quality issues. One foundation trust negotiated a block contract for 2004/05, which set a minimum level of income; while another based financial reports on estimates rather than actual activity."

For further discussion of this report and it's implications see:

E-Health Insider Investment in clinical coding now critical

Guardian - Too much, too often, too disruptive

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