Published: 22/07/2004, Volume II4, No. 5915 Page 9

'Perverse incentives' within the payment by results system that could prevent a shift of work from secondary to primary care are being investigated by the Department of Health.

Ipswich Hospital trust chief executive Paul Forden told HSJ's conference Effective Financial Management of NHS Services that working groups had been set up to establish whether elective surgery was being favoured over treatment in a primary care setting.

Mr Forden, who sits on the Department of Health's financial flows project board, was reporting from the results of a lengthy consultation on payment by results, due to be published yesterday.

He said the DoH had received 160 responses to its consultation, and that the DoH's position on the system would include:

a review of separate tariffs for planned and non-planned activity to include possible readmissions policy and payment cap;

a possible adjustment for sameday treatment or overnight stays;

a long-stay adjustment;

service-level agreements to allow for choice at six months;

confirmation that all NHS services to be provided at standard tariff, with the independent sector providing with tariff price as the maximum;

more time allowed to achieve required efficiency improvement targets;

the market forces factor to be subjected to a fit-for-purpose review and applied as a levy to trusts and primary care trusts;

possible local adjustment to tariff for use of new technology, although it would have to be limited and monitored.

The publication of a full list of tariffs for most procedures is expected to be launched at the end of September. Final guidance on the system will be published at the end of October.

Taunton and Somerset trust has deferred its foundation trust application because of concerns about its performance under the payment by results system.

A spokesman said that the trust had decided to postpone its application until 'it could be sure that payment by results would not adversely affect' the trust's financial position.

The trust is one of four that had applied for foundation trust status under the DoH's wave 1A list.

The application was subsequently deferred.

Mid Staffordshire General Hospitals trust, Winchester and Eastleigh Healthcare trust, and Essex Rivers Healthcare trust have also deferred their applications because of financial concerns.

Foundation trust regulator Bill Moyes was due to receive the list of 1A applications this week.