NHS Payment Scheme

The NHS Payment Scheme (NHSPS) contains rules to establish the amount payable for NHS-funded secondary healthcare.

2025/26 NHSPS is now in effect. Following consultation, the proposal to include a payment limit for elective activity, and all services paid on a variable basis, has been removed.

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About the NHS Payment Scheme

The 2025/26 NHSPS contains rules for four payment mechanisms:

  • Aligned payment and incentive (API) – covers almost all NHS provider activity and comprises fixed and variable elements. Almost all elective activity is included in the variable element and paid for using 100% of NHSPS unit prices.
  • Low volume activity (LVA) block payments – applies to almost all NHS provider/commissioner relationships with an annual value below £1.5m. Commissioners should pay providers the nationally set LVA value, based on a three-year rolling average, with no other transactions in-year.
  • Activity-based payment – applies to all services with NHSPS unit prices delivered by non-NHS providers. Activity is paid for using 100% of NHSPS unit prices for each unit of activity delivered.
  • Local payment arrangements – providers and commissioners locally agree an appropriate payment approach.

The NHSPS includes unit and guide prices (published in Annex A), calculated using largely the same method as National Tariff prices (for detail, see Annex D).

If you have any questions about the NHS Payment Scheme, please contact england.pricingenquiries@nhs.net.

Related resources

Keep informed about payment system developments

For more information about payment developments, please sign up for updates.

You can also join the Payment system support FutureNHS workspace.

Contact england.pricingenquiries@nhs.net for more information.

Applying for variations

Providers and commissioners can apply for variations to the NHSPS. All applications should use the variations request template and need to be approved by the relevant NHS England regional team(s) before submission to the NHS England national team. Completed and approved templates should be sent to england.pricingenquiries@nhs.net.

Nominating changes to the high cost drugs and devices lists

Within the NHS Payment Scheme, some high cost drugs and devices are excluded from the calculation of unit prices and national prices. Funding for these items is then either included in a fixed payment or paid for in addition to the price for the related service. As medical practice changes and new drugs and devices are developed and adopted, the lists of high cost drugs and devices needs to be kept as current as practically possible.

To nominate a drug or device to be added or removed from the high cost lists, please complete the following form and submit it to england.pricingenquiries@nhs.net.

Nominations must be submitted by the end of May before the subsequent year’s Payment Scheme (ie, for nominations to be considered for 2026/27, the completed form needs to be submitted by 31 May 2025). We cannot guarantee that submissions received after that date will be considered until the following year. All submissions received before the deadline will be carefully reviewed and discussed with high cost steering groups.

Join our FutureNHS workspace

Our Payment system support workspace on the FutureNHS collaboration platform contains materials, tools and products being developed to support people to implement the payment system.

Currently launched on the workspace include:

  • ICS Cost Benchmarking Dashboard – a dashboard showing cost and activity data for a whole system, at an ICS level. It allows systems to identify service level spend and patient pathway patterns.
  • Costed pathways (supported by GIRFT) – a methodology and worked example for systems to cost patient pathways, highlighting variation from clinical best practice guidelines in activity and costs.

We welcome your feedback on these products, and will continue to develop and update them based on the comments we receive.

Please contact england.pricingenquiries@nhs.net if you have any questions.

Access to past NHS Payment Schemes and national tariffs

The NHS Payment Scheme replaced the National Tariff Payment System. You can download all formal documents and policies from previous years.

Please contact england.pricingenquiries@nhs.net if you need any more information.