A national payment system which rewards improvements in clinical quality and transformation should be scrapped or radically overhauled, local leaders have argued.

The body which represents NHS provider trusts told HSJ that the “commissioning for quality and innovation” scheme should be abolished or fundamentally changed, while the representative body for local commissioners said they should be reviewed.

However, NHS England said the CQUIN scheme is “an important tool in improving patient care” and there are “no plans to scrap or significantly change” the scheme.

CQUINs have been in place for almost 10 years, and make a proportion of providers’ income conditional on demonstrating improvements in specified areas of patient care.

The scheme is worth more than £1bn nationally, although last year around £270m of the fund was held back as a “risk reserve” to offset provider deficits.

Chris Hopson, chief executive of NHS Providers, told HSJ: “We would expect CQUIN to be discussed as part of the new NHS financial framework from 2019-20 onwards.

“We have already identified this as something which should change and have started to argue this case with NHS Improvement and NHS England.

“The prime minister has said this week that she wants to see an end to provider deficits. It can’t make sense to have a £1 billion surplus on the commissioner side and a £1 billion deficit on the provider side and fundamentally changing or abolishing CQUIN would be one good way to start correcting this.

“It would also give trusts greater planning certainty and help avoid having different penny packets of funding with different conditions attached to them”.

Julie Wood, chief executive of NHS Clinical Commissioners, said: “As we move to more collaborative working between commissioners and providers, within more integrated care systems, it is right that we look again at the incentives that are used to support system change.

“This includes CQUIN but also things like the quality premium, which for both the awarding of resources is linked to performance of particular standards.

“Whilst CQUIN was established with good intentions, for trusts it is seen as core income and for commissioners, therefore, has not always achieved the service change that has been sought. [It] risks creating a set of processes with little added value. We, therefore, support a review of CQUIN and are keen to be part of that important conversation.”

A spokesperson for NHS England said: “There are no plans to scrap or significantly change the commissioning for quality and innovation framework, an important tool in improving patient care, and as part of our normal business practices we will continue to take note of any representations about optimising its operation.”