Almost one in ten hospital episodes is incorrectly coded, according to an analysis carried out by the Audit Commission.

The spending watchdog’s analysis of more than 50,000 episodes of care, equating to approximately £73m of expenditure under Payment by Results, found an average error rate of 9.4% – with error rates across trusts ranging from 1% to 52%.

The Commission warned that the errors would not only affect Payment by Results but other issues, including activity planning and commissioning.

It recommended that the Department of Health and NHS Connecting for Health should introduce a wider data quality programme to drive improvements in the standard of NHS data and increase confidence in its use.

The Commission said the coding mistakes identified contributed to a gross financial error of about £3.5m, but that in most cases the net financial impact was close to zero.

It found no national evidence of under or over-charging or gaming. However its report added: “There is a number of cases where the net financial impact of errors was locally significant.”

The report says the most common issue affecting the accuracy of clinical coding is the quality of the source documentation. Other problems include the adequacy of trust coding arrangements and the level of clinician involvement.

Audits showed that the training and development of coders had more of an impact on limiting the number of errors than the number of coding staff. Foundation trusts had marginally lower Healthcare Resource Group (RG) errors than non-foundation trusts, but higher error rates were encountered at specialist trusts.

The Audit Commission has also recommended that trusts should review and, where necessary, improve their source documentation to promote accurate coding and ensure that clinicians are engaged and involved in validating coding.

It further said that trusts should develop their coding departments through professional training and development.

The data analysis was undertaken at all trusts in England throughout 2007/8 and the Commission said the results provide the first comprehensive national picture of the quality of data underpinning not only financial but clinical and commissioning information.

The Audit Commission has developed its benchmarking methodology into an online tool called the National Benchmarker. It has recommended that trusts and primary care trusts use the Benchmarker regularly to review potential coding anomalies and areas for improvement.


Audit Commission report on PbR clinical coding