The clinical excellence and distinction awards were introduced in 1948 and remain largely unchanged.
The awards are given for a range of achievements, from research and innovation through to an outstanding commitment to quality of care and leadership. The NHS paid £202.2m for such awards in 2009/10.
The review, commissioned by the four UK health departments, will work closely with organisations including the BMA.
Andrew Lansley, England’s health secretary, said: ‘A more transparent and sustainable awards system will allow the NHS to focus its resources to benefit patients and drive up standards to give us a health service that delivers outcomes among the best in the world.’
Bill McMillan, head of medical pay and workforce for NHS Employers, commented: ‘We welcome the announcement, which reflects the view of NHS organisations that a review is needed into the system of rewarding clinical excellence.’
Dr Mark Porter, chairman of the BMA’s consultants committee, said: ‘The BMA will engage with this review, which provides an opportunity to highlight the value of award schemes to patient care.’