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National Casemix Office team

Our National Casemix Office works alongside NHS England, NHS Improvement and other national bodies to determine the cost of approximately £50 billion of healthcare activities and the commissioning of £35 billion of services.

The National Casemix Office team creates software to develop clinical grouping methodologies known as Healthcare Resource Groups (HRGs). These are groups of clinically similar activities that use similar levels of healthcare resource. This software collates healthcare provider activity data – a record of what care and services have been provided – into HRGs. This can calculate how much services cost and how much providers should be paid. 

Development of the Healthcare Resource Groups

The National Casemix Office use Hospital Episode Statistics and an extensive network of experts to determine definitions for each of the HRGs. This network consists of over 300 senior clinicians, recruited via the Royal Colleges. They meet as 30 expert working groups to discuss specialty-specific HRGs, and make improvements to the HRG design. This ensures HRGs remain clinically relevant and coherent and considers new clinical technological advances.

Patient level costing data is also used in the development process, as well as other data sources outside of the readily available nationally mandated data collections. This results in every diagnostic code found in the International Classification of Diseases (ICD-10), and every procedure found in the Classification of Interventions and Procedures (OPCS-4), being mapped directly to a unique HRG group. Each group contains activities and conditions that expend a similar level of expected healthcare resource. 


The activities that a healthcare provider has carried out, are recorded in, and extracted from patient records.


We collect and convert this activity data into HRGs by inputting the data into the Casemix Grouper Software. This software, referred to as ‘the Grouper’, can be downloaded, along with instructions, from our website. 

Analyse and interpret

The Grouper then validates and runs complex algorithms to determine the HRG or HRGs for the patient record. This is done either to predict the cost of services or to calculate a payment due to a healthcare provider.

Guidance for the costing of healthcare services can be found on the NHS Improvement website.

There is a 3 year time lag between collecting costs and publishing a new payment tariff to enable sufficient time to test the impact of the changes on the funding structure. The 2017/18 national tariff has been based on the HRG4+ 2014/2015 Reference Costs. The 2019/20 national tariff will be based on the HRG4+ 2016/17 Reference Costs.


The National Casemix Office works directly with NHS England and NHS Improvement to develop the payment tariff. Reference Costs are produced by providers and can be found on the NHS Improvement website. 

NHS Improvement now publish the reference costs each year. This document provides total spend across different areas of the health service.


The National Casemix Office enables the NHS to:

  • support activity costing – to inform the national tariff setting process underpinning Payment by Results
  • report on patient activity information – to ensure that providers are paid for the services they provide
  • provide information to support epidemiological studies and service planning - for example HES data has been interpreted with HRG software to understand the total cost of a disease to an area, or the total cost to the NHS
  • enable providers and commissioners to use HRGs to benchmark and performance manage, and redesign services
Last edited: 14 September 2018 12:27 pm