A DISPUTE over a multimillion pound medical bill has broken out between two NHS trusts.

South Tees Hospital NHS Foundation Trust says it will be owed about £4m by primary care trust (PCT) NHS North Yorkshire and York by the end of next month.

The bill is for treatment given to North Yorkshire residents at the Friarage Hospital, in Northallerton, North Yorkshire, and The James Cook University Hospital, in Middlesbrough.

However, the PCT says the bill should only be £3.1m – and is trying to reduce this still further.

The bill is for treatment carried out beyond the contracted levels agreed by the two trusts, known as “overtrades”.

It has already emerged that the PCT owes about £3.3m for work carried out by York Hospitals NHS Foundation Trust.

It is feared that further bills of about £7m to other Yorkshire trusts threaten the PCT’s efforts to overturn a predicted £8m deficit for 2009-10.

South Tees chief executive Simon Pleydell said: “The cost of providing secondary care for NHS North Yorkshire and York is expected to be about £4m more than originally planned at the end of this financial year.

“This is work the trust has legitimately carried out for the local population of North Yorkshire.

“We are very sympathetic to the financial position of the PCT and will continue to work with it to achieve a solution.”

Mr Pleydell said he recognised that this was a problem the whole health community had to work together to address.

Nicholas Steele, director of finance at NHS North Yorkshire and York, said: “We are in negotiations with South Tees Hospitals about the contract overtrades as reported in our board papers.

We hope these negotiations will result in a satisfactory agreement.”

If the trusts fail to reach agreement, an independent arbiter could be brought in to decide how much is paid.

The PCT has admitted that failing to balance the books would be a “clear breach of its main financial duty”.

It has pledged to take “every possibly action” to reduce expenditure while maintaining patient safety.