The NHS needs a national overview of data quality and coding integrity as the Payment by Results regime gathers pace, the NHS Confederation is set to argue.

A discussion paper to be sent out to members of the confederation – which represents 92 per cent of NHS organisations in the UK – argues that the NHS will need ‘reassurance that the right amount is being paid for the right activity’. The paper will call for a national overview of data quality and coding.

Under PBR healthcare providers are paid for the work they do rather than for the contracts they hold. It came into force in April 2005 for some parts of the NHS and is set to be expanded over the next three years.

The confederation’s document highlights areas of concern around PBR, which include its potential to destabilise the NHS by overpaying or underpaying providers.

Central to preventing these problems are the issues of data quality and coding.

The paper calls for a national overview of data quality and coding integrity, "including benchmarking, pattern analysis, selective random and planned audits by a national expert body to support the work of commissioners and practices."

In addition there is also a need for data quality standards and a framework for failing to comply with them, it says.

"Such failure will range from acts of omission (clerical error) to acts of commission (at worst fraud)," it notes.

Penalties would need to be proportionate and could be supported by a "coding advisory service" available to assist providers in addressing ambiguities over clinical coding.

John Flook, policy adviser to the confederation, told E-Health Insider: "We need an assurance regime to be confident that the data is complete, comprehensive, timely and consistent so that people can make useful analyses and informed decisions."

While some trusts had invested in coding staff and IT to support reporting, others had not.

Flook added: "Currently data is not timely, consistent or comprehensive and that is widely acknowledged."

He likened NHS data returns to a telephone bill. "You need to have confidence in your telephone provider not to have to check each itemised call before paying the bill. We do not want to see commissioners doing the equivalent of checking each call."

Issues of data quality are set to become more important as PBR rolls out and as practice based commissioning takes hold, he added.

"With practice based commissioning (PBC) we need to be confident that the ground we stand on is solid and reliable," he said.

The paper also takes up this point warning that the NHS should not get carried away with preventing fraud or gaming.

It observes: "As PBC grows, the need to regulate and develop an assurance regime for the potential conflicts between commissioner and provider role may be a much more significant (and large) task."

Neither the confederation’s paper nor John Flook propose any detail of who might undertake a national review or provide a coding advisory service. "This is a discussion paper and we are looking for ideas," he said.

However, obvious candidates might include the Audit Commission, which has already highlighted data quality and coding as important issues in getting PBR right, the Health and Social Care Information Centre or the private sector.

A spokesman for NHS Connecting for Health said: "Data quality and coding are clearly important aspects of developing applications and systems within NHS Connecting for Health.

"NHS Connecting for Health is currently reviewing classification and coding work to support not just the introduction of Department of Health financial reforms but also the implementation of the NHS Care Records Service and use of terminology."