The marginal tariff for hospital emergency care will be retained in 2014-15, but the policy will be modified.

Monitor and NHS England have announced they are proposing local revisions to the baseline for discount emergency admissions.

Currently commissioners need only pay a trust 30 per cent of the tariff for any emergency admission over 2008-09 levels. Commissioners’ 70 per cent saving is supposed to be spend on preventing admission.

The draft national tariff for 2014-15 proposes “requiring” commissioners to modify the baseline where “there have been significant local increases in emergency admissions outside the control of providers”. That would mean providers lose less income.

Meanwhile, NHS England will “ensure” the money saved is “spent transparently and effectively to enable more patients to be treated in community settings”.

The Foundation Trust Network has estimated the policy costs hospitals around £500m annually, and that the proceeds were rarely invested in preventing admissions, and recommended the policy be scrapped.

The FTN said the planned modificiation to the rules was “better than nothing but not enough”.

Chief executive Chris Hopson said: “Monitor and NHS England are still trying to have their cake and eat it – insisting that A&E targets are met but requiring hospitals to treat increasing numbers of emergency admissions for just 30 per cent of the cost of doing so.

“Whilst we welcome acceptance of our alternative ‘better than nothing’ suggestion - that local commissioners should rebase thresholds to recognise demand increases since 2009 - this approach carries significant risk.

“Previous attempts to improve the way the marginal tariff operates through tariff guidance have failed as commissioners have either been unable or unwilling to comply with the guidance.

“We will therefore be watching very carefully to see whether this actually works on the ground. We remain very concerned about the coming winter and the sums of money currently being lost by some trusts as a result of the 30 per cent marginal tariff - over £5m a year in some cases - are huge.”

He added that the FTN would continue to push for abolition of the policy.

Adrian Masters, managing director of sector development at Monitor, said: “Our proposals for the payment system in 2014-15 are designed to help commissioners and providers address the key challenges facing NHS care in their localities.”