PSNC prescription pricing audits

Published on: 19th July 2013 | Updated on: 1st April 2022

PSNC’s Pricing Audit Centre

The Pricing Audit Centre (PAC) team conducts independent checks to verify the accuracy of the pricing of prescriptions by the NHS Business Services Authority (NHSBSA). They also complete the monthly audit of the Margin Survey carried out by NHSBSA.

The Pricing Audit team consists of 5 members of staff and is based within our Hosier Lane Head Office:

  • Pricing Audit Centre Assistant Manager – Janine Rowe 
  • 4 PAC Pricing Analysts

The team is overseen by Rob Thomas – Funding Delivery Manager

Download our new factsheet relating to Prescription Pricing Accuracy. *currently being updated*


Monitoring accuracy

PSNC independently audits the pricing of individual monthly prescription batches (bundles) processed by NHSBSA, on behalf of Local Pharmaceutical Committees (LPCs). Where errors are identified during the auditing process, these are corrected and the NHSBSA are notified so that they can make the appropriate adjustment(s) to the contractor’s account. Where potential processing issues are identified, PSNC’s PAC team raise these with NHSBSA directly, not only ensuring that the issue is corrected for the affected contractor but to ensure that NHSBSA takes the necessary steps to prevent the recurrence of the issue for other contractors.

PSNC provides a report directly to NHSBSA every month on all errors found during the audit that were not contractor related. They also look for trends or patterns in errors, and report these directly to NHSBSA at the time of audit. NHSBSA look at the errors that have been reported to ascertain whether they can take immediate action to ensure that these errors are not repeated in future. This can be in the form of items being checked by a specialist auditor, changes to the ICR software/rules engine or further training to individual auditors.

PSNC also provides a report where necessary directly to contractors to inform them of errors that may have occurred due to incorrect/unclear endorsements, batch sorting issues, incorrect fee claims for Specials, Out of Pocket Expenses or Packaged Dose fees and/or advice where fees could have been claimed. Reports provided directly to contractors can be used as learning tools to ensure that the error(s) are not repeated.


PSNC’s Prescription Auditing

The NHSBSA audits its own pricing monthly by selecting and re-pricing a random sample of 50,000 items from all priced items within that month. Results of these internal audits can be found here.

PSNC undertakes retrospective pricing audits by examining the scanned images of full prescription bundles usually covering an average of 20-25 accounts per dispensing month. These bundles are selected on a random basis with the inclusion of set criteria to ensure that the sample is geographically representative and includes a mix of contractor size and types.

All identified errors are notified to NHSBSA and any resulting adjustment to the contractor’s account (which can be an under or over payment) will appear on their next payment schedule. Information regarding the auditing of the account as well as useful advice which may assist with endorsing, sorting and submission of prescription bundles in future is sent to the individual contractor concerned. An anonymous copy of the audit results is also sent to the LPC.

The audit process


PSNC’s electronic auditing system – PRISM

Contractors submit their prescription bundles to NHSBSA for payment every month where they are checked, scanned and then priced.  Some prescriptions are automatically priced using Intelligent Character Recognition (ICR) software and NHSBSA’s Pricing Rules Engine while others require manual input of information.

PSNC’s electronic auditing system, PRISM (Pricing/Reimbursement Information & Systems Management) enables automated auditing through the ability to view scanned prescription images and electronic prescription data and make amendments to the original pricing on the same screen.  The system also contains product and pricing information previously only obtainable in NHSBSA publications.

Each month PSNC receives the following information from NHSBSA:

  • Pricing Data for Drugs & Appliances (used to update PRISM)
  • Schedule of payment (FP34) for every contractor

For accounts to be audited:

  • Image of FP34c submission document
  • Images of all priced prescriptions
  • Data for all priced electronic prescriptions
  • Line by line pricing information for each prescription item
  • Any paper re-submissions/other items “keyed from paper”

PRISM examples

Paper prescriptions on PRISM

PRISM displays a redacted prescription image with line by line payment details which are shown side by side on the PRISM system enabling the analyst to compare what has been prescribed and endorsed against what has been priced by NHSBSA.

An example of the PRISM screen is shown below:

Electronic Prescription (EPS) on PRISM

For EPS PRISM creates a mock prescription image taking the information from the EPS message and supplanting this into a familiar workable impression for the analyst. PRISM prioritises electronic prescription types that are known to be at greater risk of errors and these items require full verification by an analyst.

An example of the PRISM screen EPS image is shown below:

Benefits of PRISM

Analysis of the data established during auditing enables detection of trends in pricing errors, this information is used in discussions with the Department of Health and Social Care (DHSC) and NHSBSA to drive improvements in pricing accuracy.

PRISM has also allowed PSNC to collate data for more specific analysis work relating to policy issues.

Margin Survey Auditing

The PAC team conducts the monthly audit of the Margin Survey

£800m p.a. of the £2.592bn pharmacy funding is payable each year through allowed retained purchase margin. Given the constant fluctuation in medicines purchase prices and reimbursed amounts, the amount delivered to pharmacy needs to be evaluated.

The margin survey process informs Drug Tariff pricing changes, including Category M adjustments. PSNC has full rights of audit and access, and independently checks the findings of NHSBSA. Pharmacy and drug samples are drawn by DHSC; these are checked by a statistical expert retained by PSNC.

Invoices are collected from a sample of independent pharmacies

  • 240 CPs are surveyed (20 per month, spread across 5 size bands)
  • Around 450-500 products are surveyed comprising of branded products/generics//specials and concessions

A database is populated with all transactions of drugs in the sample.

In addition, auditing on concessions is undertaken each quarter, to ensure the impact of these are properly adjusted for when determining the actual level of funding delivered to pharmacy through allowed retained purchase margin.

How is the Margin Survey Audit Completed?

The results are calculated by the Department of Health and PSNC conducts further analysis of the data and audits the answers. Once the final answers are agreed between the Department of Health and PSNC, they are used to inform the negotiations for contractual framework funding.

A detailed explanation of the Margins Survey methodology can be found here.


Related resources

Using Your Schedule of Payment to Monitor Performance

Common Issues That Can Lead to Pricing Errors

Prescription payment and pricing accuracy factsheets

NHSBSA Information

Prescription Rechecks at the Pricing Authority

How are Your Prescriptions Processed?

Prescription Submission

Monthly Payments

For more information on this topic please email info@psnc.org.uk

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