NHS bosses in Northamptonshire are involved in a stand-off with Northampton General Hospital over payments for treating emergency patients.
The rate of payment per emergency patient at NGH is set at a certain level but once 23,765 patients in a 12 month period isn reached, the rate drops by almost a third.
Hospital managers now believe large increases in frail patients with complex conditions means the payments - based on patient figures from 2008 - are out of step with current pressures and that the large drop in income is too much. It feels the trigger should be significantly higher than 23,000 plus.
However, any rate changes must be agreed locally with NHS Nene Clinical Commission Group (CCG), but negotiations broke down and have reached a stalemate.
An independent review will now take place with a decision to be made by June 30.
Latest NGH board papers say: “Due to previous discussions it was clear that the CCG would not agree to rebase [the rate] and therefore arbitration was decided to be the next step.”
Critics say the money held back harms the hospital, which is powerless to affect the number of emergency patients coming through its doors, by negatively affecting its finances and so putting pressure on other departments to save money.
But NHS Nene said the money held back once the threshold is met is invested by them in schemes to reduce emergency hospital admissions.
A NHS Nene spokeswoman said: “In previous years, this has supported a range of clinical pathway changes, demand management, community rehabilitation and reablement services to help reduce emergency admissions and readmissions.
“This approach is in line with national guidance and ensures the provision of sustainable quality emergency services.”