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Free scrip eligibility checks must be simpler and quicker

30% of penalties annulled as people were entitled to free care; and recovery costs 31% of total collected

Louise Prime

Tuesday, 14 May 2019

The National Audit Office (NAO) has called for a simpler system or better real-time checking eligibility for free NHS prescriptions and dental treatment to deter fraud without disadvantaging vulnerable people. It reported this morning that close to a third of all penalty charge notices (PCN) issued since 2014 were cancelled by the NHS Business Services Authority (NHSBSA) because a valid exemption was subsequently confirmed to be in place, that almost a third of the money recovered last year was spent on the recovery process itself, and that the NHSBSA had until recently failed to take action against people who repeatedly made incorrect claims.

The NAO explained that the NHS dispenses about 1.1 billion prescription items in the community and undertakes around 39 million courses of dental treatment – and about 89% of prescription items dispensed and 47% of dental treatments are claimed as exempt from charges. NHSBSA administers the distribution of PCNs to people who, either deliberately or in error, have claimed a free prescription or dental treatment to which they were not entitled; or have a valid exemption that could not be confirmed at the time of checking.


The auditor said in its latest report this morning that free prescriptions and dental treatment are a significant cost to the NHS, so it is important that it can reclaim funds from people who are not exempt from charges and deter fraud – but eligibility rules under the current system are complicated and difficult for people to understand. Its investigation* reported:

  • 5.6m PCNs have been issued since 2014
  • £133m has been recovered by NHSBSA since 2014
  • £246m outstanding debt is owed to the government through unpaid PCNs since 2014
  • £212m estimated loss to the NHS from prescription and dental fraud in 2017-18
  • 30% of PCNs issued since 2014 were later cancelled by the NHSBSA as a valid exemption was subsequently confirmed to be in place
  • £11.2m cost to the NHSBSA of collecting £36.5m of penalty charges in 2017-18 – about 31 pence per £1 recovered
  • One individual taken to court for repeated fraudulent claims against the NHS
  • 36% of the value of PCNs issued since 2014 remain outstanding
  • £49m estimated reduction in prescription fraud from 2012-13 to 2016-17.

The NAO found that NHSBSA accepts that the rules around entitlement, set by the Department of Health & Social Care, are complicated and recognises that genuine mistakes and confusion happen, caused by, for example: Universal Credit, where claimants are only eligible for exemptions if their monthly earnings are below a specified level, and prescription forms that do not yet include Universal Credit as an option; difference between benefits, such as that someone who receives income-based Jobseeker’s Allowance is automatically eligible for free prescriptions and dental treatment whereas someone who receives new-style Jobseeker’s Allowance or contribution-based Jobseeker’s Allowance is not; and a person’s eligibility for exemption might even vary between prescriptions and dental treatments.

NAO said the NHSBSA is developing a system to reduce the likelihood of fraud or error occurring in the first place by allowing pharmacists and dentists to check peoples’ eligibility for benefit-related exemptions at the time the transaction occurs. It pointed out that a current pilot across four pharmacies will be able to check health exemptions in real-time and that, if this is successful and rolled out, it could significantly reduce the amount of fraud and error that occurs, and therefore the number of PCNs that NHSBSA needs to issue.

Head of the NAO Amyas Morse commented: “Free prescriptions and dental treatment are a significant cost to the NHS, so it is reasonable to reclaim funds from people who are not exempt from charges and deter fraud. However, the NHS also needs to have due regard to people who simply fall foul of the confusing eligibility rules.  It is not a good sign that so many penalty charge notices are successfully challenged.”


*Investigation into penalty charge notices in healthcare. A report prepared by the National Audit Office, 14 May 2019.

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