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Payment by Results
Q:To ask the Secretary of State for Health what formula is used for calculating payments to a hospital under payment by results. (John Hemming)
A:Under payment by results, hospitals are paid according to the number and complexity of cases treated and on the basis of the national tariff. The national tariff paid to individual providers is adjusted for market forces factor (MFF), to account for unavoidable cost differences in land, labour and buildings. This could be expressed as a formula: activity x (tariff x MFF). (Andy Burnham, Minister of State (Delivery and Quality), Department of Health)

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