{"id":"F2017L01099","name":"Direction to the Independent Hospital Pricing Authority on the performance of its functions under section 226 of the National Health Reform Act 2011 - No. 1/2017","slug":"f2017l01099","collection":"legislative_instrument","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":439311,"registerId":"F2017L01099-fast-fetch-1775955385443","compilationNumber":null,"startDate":"2026-04-12","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"Direction to the Independent Hospital Pricing Authority on the performance of its functions under section 226 of the National Health Reform Act 2011 - No. 1/2017","content":"---\nmeta-content-style-type: text/css\nmeta-content-type: application/xhtml+xml; charset=utf-8\nmeta-generator: Aspose.Words for .NET 20.2\n---\n\n?xml version=\"1.0\" encoding=\"utf-8\" standalone=\"no\"?>\n\n![](image.001.png)\n\n \n\n \n\nDirection to the Independent Hospital Pricing Authority on the performance of its functions under section 226 of the National Health Reform Act 2011 - No. 1/2017\n\n \n\n \n\nI, GREG HUNT, Minister for Health, acting under subsection 226(1) of the National Health Reform Act 2011 (the Act), having consulted with the Standing Council on Health, DIRECT the Independent Hospital Pricing Authority to undertake the actions and provide the advice set out in Item 1 of the Schedule to this instrument.\n\n \n\n \n\n \n\n \n\n \n\nDated:        24 August 2017\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nGREG HUNT\n\nMinister for Health\n\n \n\n \n\n#### Contents\n\n \n\n \n\nPART 1 PRELIMINARY 3\n\n \n\n1 Name of Direction 3\n\n2. Commencement 3\n\n3. Authority 3\n\n4. Definitions 3\n\n5. Schedule 3\n\n \n\n \n\n \n\nSchedule    4\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nPart 1 Preliminary\n\n \n\n1.                    Name of Direction\n\n\n \n\nThis Instrument is the Direction to the Independent Hospital Pricing Authority on the performance of its functions under section 226 of the National Health Reform Act 2011 - No. 1/2017.\n\n \n\n## 2.                      Commencement\n\n \n\nThis Direction commences on the day after it is registered on the Federal Register of Legislation.\n\n \n\n## 3.                      Authority\n\n \n\nThis Direction is made under subsection 226(1) of the National Health Reform Act 2011.\n\n \n\n## 4.                      Definitions\n\n \n\nIn this Direction:\n\n \n\n10.19 Ventilation – home delivered means the category of non-admitted care clinic that provides the service of ventilation that is self-administered by the patient or the patient’s carer, as described in the Independent Hospital Pricing Authority’s Tier 2 Non‑Admitted Services Definitions Manual 2016-17 – version 4.1, as in force on the day this Direction commences.\n\n \n\nAct means the National Health Reform Act 2011.\n\n \n\nactivity based funding has the same meaning as in Appendix A of the National Health Reform Agreement, as in force on the day this Direction commences.\n\n \n\nactivity based funding service categories means the five service categories reported on by the Administrator of the National Health Funding Pool for activity based funding purposes, which are acute admitted, admitted mental health, sub-acute, emergency department, and non-admitted.\n\n \n\nblock funding has the same meaning as in Appendix A of the National Health Reform Agreement, as in force on the day this Direction commences.\n\n \n\nefficient growth has the meaning given by clause A3 of Schedule A to the National Health Reform Agreement, as in force on the day this Direction commences.\n\n \n\nnational efficient price has the same meaning as in Appendix A of the National Health Reform Agreement, as in force on the day this Direction commences.\n\n \n\nnon-admitted care clinic means the Tier 2 non-admitted services described in the Independent Hospital Pricing Authority’s Tier 2 Non‑Admitted Services Definitions Manual 2016-17 – version 4.1, as in force on the day this Direction commences.\n\n \n\nnon-admitted service event means an interaction between one or more health care providers with one non-admitted patient, which must contain therapeutic or clinical content and result in a dated entry in the patient’s medical record.\n\n \n\ntemporal bundling means the count of non-admitted service events delivered that are aggregated or bundled as monthly counts.\n\n \n\n## 5.                      Schedule\n\n \n\nThe Schedule to this Instrument describes the direction given to the Independent Hospital Pricing Authority on the performance of its functions and exercise of its powers.  \n\n \n\nSchedule   \n\n \n\n1. Functions\n\n\n \n\n(i)                 The Independent Hospital Pricing Authority, in relation to its functions under paragraphs 131(1)(c) and (n) of the Act must take steps to ensure that changes introduced to classification systems or costing methodologies across all activity based funding service categories are effectively back-cast for the purposes of clause A40 of Schedule A to the National Health Reform Agreement, to negate any unintended impact on the calculation of efficient growth for funding purposes.\n\n \n\n(ii)               The Independent Hospital Pricing Authority, in relation to its functions under paragraphs 131(1)(c) and (n) of the Act, must take steps to ensure that the introduction of changes in the non‑admitted service category that occurred in the 2014‑15 and 2015-16 financial years, including changes in scope, funding type and counting methodologies, do not have an unintended impact on the calculation of efficient growth for the 2015‑16 financial year.\n\n \n\n(a)   In undertaking Item 1(ii), the Independent Hospital Pricing Authority must review and take any necessary steps to address anomalies in the calculation of efficient growth that have occurred as a result of:\n\n \n\n1. the transfer of non-admitted care clinics from block funding arrangements to activity based funding arrangements;\n\n\n \n\nb.        the change in counting methodology from counting every non‑admitted service event to temporal bundling; and\n\n \n\nc.         scope changes for non-admitted care clinics, including the expanded scope of 10.19 Ventilation – home delivered to include patients who are dependent on ventilation at night and who without ventilation support would be at risk of imminent hospitalisation.\n\n \n\n(b)     In undertaking Item 1(ii), the Independent Hospital Pricing Authority may consider development of a methodology, or methodologies, for the Administrator of the National Health Funding Pool to consider in calculating the final funding entitlement for the 2015-16 financial year.\n\n \n\n(iii)            The Independent Hospital Pricing Authority, in relation to its functions under paragraphs 131(1)(e), (h) and (n) of the Act, must undertake a review and provide advice on the impact of the data reporting practices utilised in Western Australia for the non-admitted service category.\n\n \n\n(a)   In undertaking Item 1(iii), the Independent Hospital Pricing Authority is to review the practice in Western Australia of using a mix of patient and aggregate level data at a hospital for funding purposes, including whether there is potential for duplicate payments under this arrangement.\n\n \n\n(iv)             The Independent Hospital Pricing Authority must advise on its reviews and any actions taken to resolve issues as referred to in Item 1(i), (ii) and (iii) to the Commonwealth, States and Territories by 13 October 2017.\n\n \n","sortOrder":0}],"analysis":{"flash_summary_failed":{"failed":true,"reason":"Unauthenticated. Configure AI_GATEWAY_API_KEY or use a provider module. Learn more: https://ai-sdk.dev/unauthenticated-ai-gateway","source":"analysis-cron"},"kimi_summary":{"content_quality":"ok","complexity_score":4,"scope_assessment":{"changed":false,"description":"This direction operates within the established scope of the National Health Reform Act 2011. It exercises the Minister's existing power under section 226 to give directions about the IHPA's functions. The content addresses specific technical implementation issues within the existing hospital funding framework rather than expanding the Authority's remit into new policy areas."},"complexity_factors":["10 defined terms referencing external documents (National Health Reform Agreement, Tier 2 Non-Admitted Services Definitions Manual)","Nested sub-paragraphs (Item 1(ii)(a)(1)) creating three levels of hierarchy","Cross-references to multiple sections of the parent Act (sections 131, 226) and external agreements","Technical health funding jargon requiring domain knowledge ('activity based funding', 'temporal bundling', 'block funding', 'efficient growth')","Conditional language ('must take steps to ensure', 'may consider') creating discretionary vs mandatory obligations","Specific temporal constraints (2014-15, 2015-16 financial years) and reporting deadline (13 October 2017)"],"plain_english_summary":"The Health Minister directs the Independent Hospital Pricing Authority to correct three funding-calculation problems: prevent methodology changes from distorting “efficient growth”; fix 2015–16 anomalies arising from shifts in funding models, counting methods and expanded home ventilation coverage; and review Western Australia’s mixing of individual and aggregate non‑admitted patient data. This affects IHPA, state/territory health departments, public hospitals and the Commonwealth.\n\nThe aim is to ensure federal–state hospital payments are calculated fairly and avoid over‑ or under‑payment."},"flash_summary":{"complexity_score":6,"scope_assessment":{"changed":false,"description":"This Direction does not amend the IHPA’s statutory powers or the Act; it exercises the Minister’s power under subsection 226(1) to direct IHPA’s performance of specified functions under paragraphs 131(1)(c),(e),(h) and (n). It confines IHPA to undertaking reviews, back‑casting and advice on funding calculations and reporting practices (Authority: s3; Schedule Item 1). It instructs tasks within IHPA’s existing remit rather than expanding legal scope or creating new statutory authorities."},"complexity_factors":["Technical funding concept: relies on the ‘efficient growth’ calculation in the National Health Reform Agreement (Schedule A, clause A40) which is a specialised financial measure (Schedule Item 1(i)).","Cross‑instrument dependence: requires back‑casting to earlier classification and costing systems and refers to external manuals and the National Health Reform Agreement in force on commencement (Definitions; Schedule Item 1(i)-(ii)).","Retrospective adjustment: asks IHPA to address anomalies for past financial years (2014‑15 and 2015‑16), complicating data reconciliation and final entitlement calculations (Schedule Item 1(ii)(b)).","Multiple technical changes interacting: must reconcile transfers from block funding to activity‑based funding, a change from event counting to temporal bundling, and scope expansion for specific clinics (Schedule Item 1(ii)(a)).","Jurisdictional data variation: directs a review of Western Australia’s mixed patient‑level and aggregate reporting and duplicate payment risk, introducing inter‑jurisdictional comparability and verification issues (Schedule Item 1(iii)(a)).","Tight timeline and deliverable: mandated advice and actions must be reported to jurisdictions by a specific date (13 October 2017), increasing implementation and administrative pressure (Schedule Item 1(iv)).","Discretion and method development: IHPA may develop one or more methodologies for the Administrator to use in finalising 2015‑16 entitlements, which requires exercise of technical judgment (Schedule Item 1(ii)(b)).","Multiple actors affected: impacts IHPA’s practice, the Administrator of the National Health Funding Pool, States/Territories and hospitals/non‑admitted clinics, creating coordination and compliance burdens (Schedule Items 1(i)–(iv))."],"plain_english_summary":"This Direction tells the Independent Hospital Pricing Authority (IHPA) to adjust how past and current non‑admitted and other activity‑based funding data are treated so changes in classification, costing or counting do not distort the calculation of ‘efficient growth’ used to allocate hospital funding. It requires reviews of anomalies from 2014–15 and 2015–16 (including movement from block to activity funding, temporal bundling and expanded home‑ventilation scope), a review of Western Australia’s mixed data reporting, and a report to Commonwealth, States and Territories by 13 October 2017."}},"importantCases":[],"_links":{"self":"/api/acts/f2017l01099","history":"/api/acts/f2017l01099/history","analysis":"/api/acts/f2017l01099/analysis","conflicts":"/api/acts/f2017l01099/conflicts","importantCases":"/api/acts/f2017l01099/important-cases","documents":"/api/acts/f2017l01099/documents"}}