Website of the Department of Health

The new scheme

NHS charges are levied when: a person is involved in a road traffic accident and as a result receives examination or treatment at an NHS hospital and that person subsequently claims and receives compensation from the holder of a compulsory motor vehicle insurance policy in respect of the injuries sustained in the accident.

The charges are paid by the authorised insurer who makes the payment of personal injury compensation and, under the new system, are collected by the Compensation Recovery Unit , acting on behalf of the Secretary of State, the Scottish Minister and the Welsh Assembly Secretary. The money collected is transferred directly to the hospitals providing treatment on a monthly basis.

Number of cases handled

In the first year of the new scheme the Compensation Recovery Unit* has been notified by insurers of 417,031 new cases involving motor liability. In addition initial enquiries regarding NHS treatment have been made in a further 112,020 cases which had been notified to the Unit prior to 5 April 1999. As the NHS charge becomes payable when the insurance claim is settled recovery can be made on these older cases and action to establish if charges are due begins as they are transferred to the new system. Just over half of all these cases, old and new, have so far been identified as involving NHS hospital treatment and to the end of the year 244,034 enquiries had been made to hospitals asking them to confirm the details of treatment given.

* The Compensation Recovery Unit is a part of the Benefits Agency.

Amounts recovered and paid to hospitals

The recovery of NHS costs was slower than had been anticipated at the outset. No money at all was recovered for the first two months (which was to be expected as the recovery process itself takes time) but the subsequent increase in collection was much slower than expected. It was not until the second half of the year when recoveries appeared to stabilise, and the vast majority of the income was recovered:

April:
May:
June:
July: £230,305
August: £713,162
September: £1,727,942
October: £3,729,742
November: £5,669,489
December: £4,423,782
January: £4,344,448
February: £4,658,849
March: £4,548,853
Total: £30,046,573

*June figure rolled forward to July

This figure does not represent total income to the NHS in 1999/2000 as income will have been received directly by trusts in the first part of the year as carry-over from the old arrangements. These additional amounts will not be known until trust accounts are available later in the year. The figure also cannot be viewed as likely income in a typical year as initial technical problems with the new computer system meant that it was not possible to effect recovery in a relatively small number of cases during the financial year. These problems have now been resolved and the income will be recovered in the current year.

Amounts identified as potentially owing to hospitals

The NHS charge does not become payable by the insurer unless and until an associated payment of personal injury compensation is made. As the preliminary work can be carried out some time before this happens NHS hospitals are aware of income which is due to them some time before it arrives. During the course of the year an estimated £75,765,180 has been identified as potentially owing to NHS trusts. This money will be released to trusts if and when the underlying insurance claims are settled. The average length of time it takes to settle a motor vehicle insurance claim is around two years.

Costs of recovery

The Departments of Health in England, Scotland and Wales contributed a total of
£1.453m to the running costs of the Compensation Recovery Unit in 1999/2000. This included the recruitment and training of 53 staff and some residual start-up costs for the new computer system delivered in 1998/99 in preparation for the new arrangements.

Contact:
Tracy Morton,
4W10 Quarry House,
Quarry Hill,
Leeds LS2 7UE.
Tel: 0113 254 5380