Guidance

Guidance on the application of the NHS injury costs recovery scheme for 2024 to 2025

Updated 15 October 2024

This guidance is primarily for NHS trusts and NHS foundation trusts that provide treatment for injuries whose costs are recoverable under the NHS injury costs recovery scheme (ICR).

It sets out the circumstances where costs can be recovered and the process under which this is undertaken, as well as giving some guidance on how ICR payments should be recorded in annual accounts.

Introduction

The fundamental principle behind the ICR scheme is that those responsible for causing injury to others should meet the cost of NHS treatment. NHS costs are recovered only where personal injury compensation is paid - for example, after a road traffic accident. Funds recovered come primarily from a third-party compensator or insurer.

The scheme includes the recovery of ambulance journey costs and enables contributory negligence (where the person accepts or is found to have an element of responsibility for the injury sustained) to be taken into account when calculating the charges due.

This money goes directly to the trust that provided the treatment, whether NHS trust, NHS foundation trust or an ambulance trust, for reinvesting in improving patient services. The monies recovered are not ‘additional’ funding but the recovery of resources already expended.

The scheme is based on a simple average cost tariff system to allow the efficient and cost-effective recovery of monies while also keeping running costs down in order to maximise the benefits for NHS services.

The process

The legislation places a legal obligation on insurers and solicitors to inform the Secretary of State for Health and Social Care (or the Scottish ministers) whenever a claim is made for personal injury compensation.

Day-to-day operation of the scheme is carried out on behalf of the Secretary of State (for England and Wales) and the Scottish ministers by the Compensation Recovery Unit (CRU), part of the Department for Work and Pensions, so in practice notification is made to them.

CRU will send details of claims to NHS providers using form NHS2. This form asks the NHS trust or foundation trust to confirm basic treatment details - for example, date of arrival, whether the patient was treated as an outpatient or if they were admitted, then for how many days (this excludes the day of discharge). The form also requires providers to note if the patient arrived by ambulance and whether the patient has been transferred to another unit and, again, whether that was by ambulance.

Once the form is saved on the system, CRU can calculate how much will be payable in NHS charges if the compensation claim for the patient is successful. It uses a simple average tariff system, currently standing at £1,042 per day for inpatient treatment (which includes an element for subsequent outpatient treatment) and a one-off charge of £848 for outpatient treatment, irrespective of how many outpatient appointments are needed.

Inpatient treatment always supersedes outpatient so, for example, someone who spends, say, 4 nights in hospital and then subsequently has 3 related outpatient appointments will only accrue charges for the inpatient treatment - that is, 4 x £1,042. There is also an overall cap on the amount that can be recovered in NHS charges for any one injury, currently standing at £62,272. This equates to roughly 60 days’ inpatient treatment. The tariffs are updated annually.

Once CRU calculates the amount of NHS charges due, it will issue a certificate to the person or body liable to pay the compensation (the ‘compensator’) confirming that amount.

Compensators are required to pay CRU within 14 days of the compensation claim being settled, or within 14 days of receiving the certificate if the claim has already been settled. CRU then forwards the funds recovered to the NHS trust that treated the injured person.

If the patient named on the form cannot be traced or the information held differs from that given - for example, a different date of treatment - then the form should be returned to CRU with suitable annotation for it to make further enquiries. Initially CRU can only supply trusts with information it receives from insurers.

It is inevitable that some details will be wrong, or circumstances may have changed - for example, a name or address may have changed since the date of the accident. It is important, however, that providers search thoroughly for a case before returning it untraced as further enquiries are costly and time consuming. Experience shows that many untraced cases were traceable, but the initial search had been insufficiently thorough.

The tariff

A simple tariff is in place, which increases each year to take account of Hospital and Community Health Services (HCHS) inflation.

The ICR annual tariff has moved from 1 April to 1 October to allow the uplift to fully reflect the impact of the NHS pay settlements inflation.

The rates are shown in the table below. Earlier rates are available on request from [email protected].

NHS treatment and ambulance journey charges

Accident date (on or after)	Outpatient	Inpatient	Cap	Ambulance charges (per person per journey)
1 October 2024	£848	£1,042	£62,272	£256
1 April 2024	£825	£1,014	£60,610	£249
2 October 2023	£806	£991	£59,248	£243
1 April 2023	£788	£968	£57,892	£238
1 April 2022	£766	£941	£56,260	£231
1 April 2021	£744	£915	£54,682	£225
1 April 2020	£743	£913	£54,566	£224
1 April 2019	£725	£891	£53,278	£219
1 April 2018	£688	£846	£50,561	£208
1 April 2017	£678	£833	£49,824	£205
1 April 2016	£665	£817	£48,849	£201
1 April 2015	£647	£796	£47,569	£195
1 April 2014	£637	£783	£46,831	£192

The tariff is supported by 2 simple rules:

1. Inpatient and outpatient charges are mutually exclusive with inpatient taking precedence. This means that if a patient receives both inpatient and outpatient treatment then only the inpatient treatment tariff is recovered.

2. Money recovered is paid to NHS providers in chronological order. For example, a patient transported by ambulance who spends 5 days in provider A, followed by 10 days in provider B and has subsequent outpatient treatment at provider A would mean 1 x £256 for the ambulance journey, 5 x £1,042 for provider A and 10 x £1,042 for provider B with no recovery in respect of the outpatient treatment. Once the cap is reached, subsequent treatment costs are not recoverable.

Accruing the income

The use of the tariff means that, in the majority of cases, the provider will know, when it has verified the details, what it may expect to receive once the insurance claim is settled. Some of these claims, however, will not reach payment. For example, it may later emerge that the compensator is exempt from payment of NHS charges.

Statistics provided by CRU on the number of such claims that were withdrawn for the 2023 to 2024 financial year showed that approximately 24.45% of claims did not reach payment. NHS providers are sent monthly schedules of all withdrawn claims with the reason for withdrawal. NHS providers were therefore advised to accrue 75.55% of income with CRU as a debtor.

The remaining 24.45% of income should be included in the provision for irrecoverable debts (under the ‘bad debts’ heading within operating expenses in the annual accounts). In the absence of better information as to which claims will be paid out quickly and which not, trusts should initially include their accruals in long-term debtors, bringing them into short-term debtors after one year. This statistic will be reviewed annually.

The point at which to accrue the income is when the NHS2 form has been received and it has been confirmed from the NHS provider’s records that treatment has been given. The NHS2 form, the provider’s response to it and the calculation of the amount due will form the prime documents for auditing purposes. Clearly, if the provider’s records do not show treatment or if there are discrepancies that need investigating, income should not be accrued.

Receiving payment

All NHS providers have supplied CRU with bank account details. At the end of every calendar month, CRU will pay the amount received in respect of treatment given at the provider direct to the relevant account.

A payment schedule will be sent separately to each provider indicating which cases have been included and how much has been paid. NHS providers should check the schedules on receipt and inform CRU of any discrepancy between what they expected to receive and what has been received.

Discrepancies

There are 2 main reasons why discrepancies may occur:

1. The first is where the injured person accepts, or is found to have, an element of responsibility for the injury sustained (contributory negligence). Where contributory negligence is agreed, then the proportion of that agreement (for example 75/25) is also applied to the recovery of NHS costs so the certificate of charges will be reduced by the same amount.

2. The second is where an error has been made at CRU and the insurer has been issued with an incorrect demand. It may not always be possible, for legal reasons, to make corrections in these cases but it is important that they are recorded at CRU and in the trust.

Reviews and appeals

Insurers have the right of review and appeal against NHS charges. The grounds on which an appeal can be made are:

• the amount claimed is wrong

• the amount claimed takes into account treatment that is not NHS treatment needed as a result of the injury

• the payment of compensation was not one that attracted NHS charges

Appeals against NHS charges will be heard by an independent tribunal. CRU is experienced in this kind of work and used to looking at cases involving medical issues.

CRU will subject any appeal to internal review and attempt to resolve the problem using the data that is already available to it. If this is not possible, a copy of the grounds of appeal will be sent to the relevant provider, and the provider will be asked to consider and confirm or amend the information submitted on the original NHS2 or may be required to provide a report outlining why all the treatment provided was appropriate.

Should it not prove possible to resolve the case in this way then it will go forward for formal appeal. At this stage, the hospital may be requested to provide additional information relating to the patient’s treatment received as a result of the injury.

The release of this information is provided for in the Health and Social Care (Community Health and Standards) Act 2003 and the supporting regulations, the Personal Injuries (NHS Charges) (Reviews and Appeals) Amendment Regulations 2007. The act also contains safeguards so that the tribunal can withhold medical advice or evidence that is submitted to it if it is necessary to protect the patient.

Experience with the benefit recovery scheme is that the majority of appeals can be dealt with on paper and oral hearings are rare.

Under or over payments

As a result of review or appeal, it may be established that either too much or too little has been paid by a compensator in any particular case.

Where too little has been paid, CRU will recover the balance from the insurer and include the amount with the next scheduled payment to the hospital.

Where too much has been paid, CRU will in most cases repay the amount to the insurer, reducing the next month’s payment to the NHS provider by the same amount.

In cases where a provider does not receive regular payments from CRU, CRU may either require the provider to repay the insurer directly or may seek recovery from the provider itself at the end of the financial year.

A ‘de minimis’ level of £25 applies to CRU recovery and will also apply to NHS charges. This means that £25 is the smallest amount that can be recovered. Therefore, in instances where NHS charges are up to £25 short from the compensator, no demands will be issued for the shortfall.

Responsibilities of NHS providers

NHS providers are asked to co-operate with CRU as fully as possible to help the scheme run smoothly and ensure that income is collected as efficiently as possible. There are a number of things that providers can do to help:

• providers should limit the number of cases that are returned to CRU from them as ‘no trace’ - if a patient’s details cannot immediately be found on the Patient Administration System (PAS) or other computerised system, the provider should firstly also check manual health records such as those in x-ray departments or physiotherapy clinics before going back to CRU

• CRU should be given advance warning of possible mergers between NHS providers - full details of the new structure and relevant contact details should be provided to CRU within 14 days of the merger

• providers should notify CRU of any changes to bank account details within 10 working days

• providers should report any discrepancies in payments to the NHS Operations team at CRU within 14 days of receipt of payment

• providers should try to reply to any enquiry from CRU within 14 working days

• providers should, when requested, supply CRU with additional information relating to a patient’s treatment received as a result of an injury for appeals within 5 working days

Contacts

To contact the ICR policy team at the Department of Health and Social Care, email [email protected].

To contact CRU, email [email protected] or write to:

Department for Work and Pensions Compensation Recovery Unit
Post Handling Site B
Wolverhampton
WV99 2FR