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

The body found the overall national average error rate in the Healthcare Resource Group system that underpins tariff had fallen from 9.4 per cent in 2007-08 to 7.5 per cent in 2011-12.

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.”

In 2010-11 the Audit Commission investigated 29 trusts who had performed “consistently poorly” on HRG coding, and a follow-up this year saw 10 of these still in the worst performing category of trusts.

These are: East And North Hertfordshire Trust, Colchester Hospital University Foundation Trust, Guy’s and St Thomas’ Foundation Trust, Heart of England Foundation Trust, Heatherwood and Wexham Park Hospitals Foundation Trust, King’s College Hospital Foundation Trust, Leeds Teaching Hospitals Trust, Mid Yorkshire Hospitals Trust, Royal Free London Foundation Trust and Royal Bournemouth and Christchurch Hospitals Foundation Trust.

Six of the 29 are now in the best performing category: Barnet and Chase Farm Hospitals Trust, Homerton University Hospital Foundation Trust, Croydon Health Services Trust, Moorfields Eye Hospital Foundation Trust, Royal Surrey County Hospital Foundation Trust and United Lincolnshire Hospitals Trust.

Since the commission started measuring the national average HRG error rate in 2007-08 only four trusts have consistently been in the top-performing category: Cambridge University Hospitals Foundation Trust, Kingston Hospital Trust, Tameside Hospitals Foundation Trust and Wrightington, Wigan and Leigh Foundation Trust.