2023/25 NHS Payment Scheme came into force on April 1, 2023

In late March 2023, NHS England released the 2023/25 NHS Payment Scheme (NHSPS) to come into force on April 1, 2023. NHSPS has been set for two years, replacing the National Tariff Payment System (published annually). 

The 2023/25 NHSPS specifies four payment mechanisms with rules for determining payment amounts from commissioners to providers of NHS-funded secondary care.

The key payment mechanism remains “aligned payment and incentive’ (API), comprising of fixed and variable components, which covers almost all secondary care activity. The exception is cases when the annual contract value between commissioner and provider is lower than £0.5m – the ‘low volume activity (LVA) block payments’ mechanism will then apply.

Compared with the previous few years, the role of the DRG system (in England, called Healthcare Resource Groups, HRG) has grown: HRG tariffs are used to reimburse almost all elective activity (as a variable component of API) and services delivered by non-NHS providers (via activity-based payment mechanism). The HRG tariffs (called unit prices, published in Annex A) are calculated using largely the same method as National Tariff prices.

The fourth payment mechanism, local payment arrangements, will apply to activities not covered by another payment mechanism.

See more details here.

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