Background to the report
Each year, around 1.1 billion prescription items are dispensed and 39 million dental treatments undertaken. In 2019-20, each item on a prescription costs £9.00 and dental treatments are charged in three bands (£22.70, £62.10, £269.30), depending on the treatment. Some people are exempt from paying if they have a valid reason (for example they are under 16 or they receive certain benefits). Those who claim a free prescription or dental treatment without a valid reason, whether fraudulently or in error, could be issued with a penalty charge notice (PCN). A PCN has two components – the original cost of the prescription or dental treatment and a penalty charge of up to £100.
We undertook this work in response to concerns raised in the media and to us directly suggesting negative effects on the health of some people who have received PCNs. These concerns relate to those who have received a PCN despite holding a valid exemption, and in particular to those who struggle to understand their eligibility for free prescriptions and dental treatments and how to navigate the system successfully. We recognise that there is a genuine tension between the use of PCNs to reduce fraud and error and the concern that they may cause for those who receive them.
Content and scope of the report
In this investigation, we set out the facts about PCNs (such as the numbers issued, and the amount paid), as well as the steps the NHS Business Services Authority (NHSBSA) is taking to support those who have trouble understanding the system and/or paying the penalty charge.
Our investigation focuses on:
- the entitlement to free prescriptions and dental care (Part One);
- the use of penalty charge notices to recover funds for the NHS and to deter fraud (Part Two); and
- improving knowledge about eligibility for exemptions (Part Three).
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. However, eligibility rules under the current system are complicated and difficult for people to understand, and NHSBSA still issues a significant number of PCNs that are later successfully challenged. Since 2014, NHSBSA has significantly increased the number of checks it carries out and the number of PCNs it issues but has only recently started taking commensurate steps to improve public awareness of the rules. A simpler system or better real-time checking will be important going forward in deterring fraud but not disadvantaging vulnerable people.