The Audit Commission has announced an extension of its payment by results data assurance checks.

The change means the commission will this year start to assess the accuracy of trust reference cost collections, which attempt to assess the cost to the trust of each procedure.

In its first audit of 2007-08 billing data the commission found that on average 16 per cent of the clinical codes recorded by hospital trusts were wrong

The Department of Health uses the reference cost data to establish the average NHS cost of different treatments, which in turn informs the prices in the national tariff. But there have been concerns about the accuracy of clinical coding data from trusts - and therefore the “average cost” prices in the tariff as well as the payment by results bills sent to primary care trusts.

In its first audit of 2007-08 billing data the commission found that on average 16 per cent of the clinical codes recorded by hospital trusts were wrong.

It says that the latest findings, which will be published in detail next month, show errors have decreased, but at 11 per cent are still a significant concern.

Work by the commission has shown that errors do not lead to systematic overcharging of PCTs as the under- and overcharging as a result of errors balance each other out.

Also, a number of procedure and diagnosis codes group together to make one tariff price code and so it is possible the price charged may be correct, even if some of the recorded procedure and diagnosis codes underlying it are wrong.

But even if they do not produce faulty bills, diagnosis and procedure coding errors undermine the accuracy of NHS epidemiological data.

If the same coding errors affect the reference cost data, the prices in the national tariff could also be wrong and make attempts to “unbundle” or disaggregate tariff prices difficult.

The commission has also announced its plans to assess the quality of data collected by mental health and community services, in advance of the planned extension of the payment by results system into those areas.