Ministerial Direction

16 February 2017

On 16 February 2017 IHPA received a Ministerial Direction from the Hon. Greg Hunt under section 226(1) of the National Health Reform Act 2011.

The Direction requires that IHPA undertake implementation of agreed recommendations of the COAG Health Council on pricing for safety and quality to give effect to:

  1. nil funding for a public hospital episode including a sentinel event which occurs on or after 1 July 2017, applying to all relevant episodes of care (being admitted and other episodes) in hospitals where the services are funded on an activity basis and hospitals where services are block funded; and
  2. an appropriate reduced funding level for all hospital acquired complications, in accordance with Option 3 of the draft Pricing Framework for Australian Public Hospital Services 2017-18, as existing on 30 November 2016, to reflect the additional cost of a hospital admission with a hospital acquired complication, to be applied across all public hospitals; and
  3. undertake further public consultation to inform a future pricing and funding approach in relation to avoidable hospital readmissions, based on a set of definitions to be developed by the Australian Commission on Safety and Quality in Health Care.

IHPA will incorporate the requirements under this Direction into the final Pricing Framework for Australian Public Hospitals 2017-18 due to be published on the IHPA website in early March 2017.

IHPA will undertake further consultation as part of its annual consultation process on the draft Pricing Framework for Australian Public Hospitals 2018-19 due for publication in June 2017 and provide a report back to the COAG Health Council by 30 November 2017.

Note: This follows on from a Direction received on 29 August 2016 which required IHPA to provide advice to the COAG Health Council on options for pricing for safety and quality.

More information

For any questions, please contact enquiries.ihpa [at] ihpa.gov.au

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