Family doctors are being offered thousands of pounds in bonuses to reduce the number of patients sent to hospital, according to research by Pulse magazine.
In an arrangement described as "highly unethical" by critics, GPs are being paid up to £11,000 to remain within targets for outpatient referrals and follow-ups, which can include cancer referrals and emergency admissions.
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GMC guidelines state that doctors must not accept any "inducement, gift or hospitality" that affects or could be seen to affect the way a doctor treats or refers patients.
The chairman of the Royal College of GPs, Dr Maureen Baker, said: "It is deeply insulting and demeaning – as well as being highly unethical – to suggest that offering GPs money will change the way in which we care for our patients."
She said that the system was "preposterous", adding: "Most worryingly, it undermines the doctor-patient relationship and the trust that underpins it."
The arrangement, revealed by Pulse magazine, contradicts the recently announced NHS cancer strategy, which promised an 80 per cent increase in tests for cancers.
Sean Duffy, national clinical director for cancer at NHS England, insisted: "We explicitly want to increase, not deter, appropriate referrals for cancer checks so as to ensure earlier diagnosis."
However, he added: "For some other conditions there's clear evidence that by boosting funding of GP services, patients can get better care at their local surgery and avoid the need to go to hospital outpatients."
The NHS in England has set itself a target to save £22bn by 2020.