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PCTs could face financial problems because of the new NHS tariff system

By Ian Cameron

Practice-based commissioning is not a panacea to solve major problems with the Payment by Results tariff system, public spending watchdogs warn.

An Audit Commission report into Payment by Results found it could destabilise local NHS budgets and pose serious problems for PCTs, particularly those with large deficits.

Implementation of the system – which sets a fixed tariff for each hospital procedure – had proved complex, time consuming, challenging and expensive, the report said.

Problems identified included perverse incentives for hospitals to increase activity, such as keeping patients in for more than 48 hours.

Miscoding of procedures so the most expensive was charged, and a rise in consultant-to-consultant referrals were also cited as examples of ‘gaming'.

‘Some PCTs are struggling to obtain accurate activity data at PCT level, let alone practice level,' the report concluded.

Practice-based commissioning is meant to act as a brake on hospital activity, but the Audit Commission warned it should not be relied upon to offset the ‘ill-effects' of Payment by Results.

Katherine Burchfield, policy director and research manager at the commission and author of the report, said PCTs had to ensure practices taking on commissioning were given accurate and timely hospital data and implement contingency plans to cope with activity swings.

She added: ‘Risks would be worse for PCTs with deficits, unable to manage demand and cope with unexpected increases in admissions.'

Dr Mike Dixon, chair of the NHS Alliance, said PCTs would insulate GPs engaged in practice-based commissioning from the risks associated with Payment by Results.

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