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NHS is losing millions due to decade-old insurance recovery law

17 May 2016

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Outdated recovery legislation is costing the NHS tens of millions pounds as insurance payouts remain capped at just under £50,000, says a specialist law firm.

Despite being faced with a £2.26 billion overspend in the current financial year, law firm Moore Blatch says “unacceptable” legislation means that insurers or any other at-fault party only needs to cover £47,569 worth of in-patient costs incurred by the NHS.

The legislation, which has not been updated for over a decade, extends to employers who fail to protect their employee, and also means insurance companies are not required to pay for any outpatient costs.

Under the Health & Social Care (Communities Health Standards) Act 2003, the NHS was able to recover charges beyond patient injuries related to road traffic accidents as part of the personal injury process.

While the law saw more than £200 million returned to the NHS in 2013/14, including £3 million to individual trauma centres, charges relating to in-patient care remain capped.

A Health Impact Assessment in 2007 estimated that on average a hospitalised patient costs the NHS £16,000. But under the current legislation, the NHS would only be able to claim £5,572 each week.

However, for someone who has suffered a life changing injury, the cost of a prosthetic limb alone can cost the NHS in the region of £50,000.

This figure doesn’t take into account the immediate urgent care or the ongoing rehabilitation costs.

Furthermore, there are an estimated 20,000 major trauma cases in England every year, which ultimately costs the NHS anywhere from £0.3 billion to £0.4 billion every year.

Trevor Sterling, partner and major trauma and personal injury lawyer at Moore Blatch, says: “The NHS is being asked to pick up the bill for negligence on behalf of employers and other third parties, many of whom have insurance that should cover this.

“The whole system needs urgent review, especially at a time when cash for the NHS is so desperately needed. At the very least, the NHS should be able to recover both inpatient and outpatient costs, not one or the other, and ideally the cap should be removed altogether.”

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