Private Health Facilities Act 2007

Licensees and operators bear the primary burden. A “licensee” is the holder of a licence issued under s 9 (s 4(1)). Because the definition of “conduct” of a facility captures both natural persons and corporations (s 4(2)(c)), sole traders, partnerships, companies and trustees can all be licensees. They must satisfy the “fit and proper person” test at every licensing stage (ss 7(4)(a), 9(1)(c), 15(4)(a)) and remain subject to it for cancellation (s 31(1)(b)). Licensees are personally liable for overcrowding (s 36), use of premises for unauthorised purposes (s 35), failure to maintain staffing (s 37), register offences (s 38), absence of a medical advisory committee (s 39(1)), and the overarching duty to conduct the facility in accordance with licensing standards and reasonable patient-care standards (s 12(2)(d)–(e)).

Directors and managers of corporate licensees are exposed both through the deeming provision in s 62 and because the fit-and-proper test expressly extends to directors and persons concerned in management (s 7(4)(a)). They may also be captured by the duty to report criminal or disciplinary matters if they are themselves registered health practitioners (s 57A).

Health practitioners (medical practitioners, dentists and prescribed others—s 4(1)) are affected in multiple ways. A practitioner who has a pecuniary interest in the facility must disclose it before advising admission, arranging admission or providing treatment (s 58, 200 penalty units). Practitioners must report to the licensee any charge or conviction for a serious sex or violence offence, or any finding of unsatisfactory professional conduct or professional misconduct (s 57A). Their clinical privileges are subject to advice from the medical advisory committee (s 39(2)(a)), and information about variation, suspension or termination of those privileges may be shared with other facilities if patient safety is at stake (s 58A). If an incident review identifies a performance or impairment issue, the reviewer must notify the licensee and medical-advisory-committee chair (s 49), potentially triggering external regulatory action.

Patients are the intended beneficiaries. The Act’s objects refer expressly to standards of health care and patient safety. Patients receive indirect protection through licensing standards, mandatory staffing, the patient register (s 38), overcrowding limits (s 36) and the incident-review system that may result in systemic improvements. Section 45(1)(c) permits disclosure of de-identified information to the patient, family or carer. However, patients have no direct statutory right to initiate review; their influence is exercised through consumer representatives on the Advisory Committee (s 54(3)(e)) and on Committees of Review (s 25(1)(c)).

The Secretary of the Ministry of Health and authorised officers are the primary regulators. The Secretary decides all licence applications, extensions, transfers, amendments, suspensions and cancellations, and may issue improvement notices through authorised officers (s 52). Authorised officers have broad entry, inspection, questioning and document-production powers (ss 51–51B), subject only to residential-premises consent (s 51(2)).

The Private Health Facilities Advisory Committee, Committees of Review, serious adverse event review teams and assessors perform specialist roles. The Advisory Committee advises on policy and regulation (s 55). Committees of Review conduct merits reviews and recommend to the Minister (s 26). Incident reviewers operate under strict confidentiality and evidentiary shields (ss 49C–49G).

Executors and administrators are deemed licensees for up to two months (or longer with Secretary approval) after a sole licensee dies (s 34), ensuring continuity.

Regulators under the Health Practitioner Regulation National Law (NSW) interact with the Act through the notification obligations in s 49 and the cross-references in definitions of professional misconduct, unsatisfactory professional conduct and impairment (s 41).

Licensee duties are both positive and negative. Positive duties include: maintaining insurance (s 12(2)(a)); ensuring a medical advisory committee is always appointed (s 12(2)(b)); conducting the facility in accordance with licensing standards (s 12(2)(d)); maintaining reasonable standards of patient care and safety (s 12(2)(e)); providing prescribed information to the Secretary (s 12(2)(f)); keeping and correctly completing a patient register (s 38); appointing and notifying the Secretary of a director of nursing or midwifery (s 37(4)); and forwarding serious-adverse-event-review reports to the Secretary within 30 days (s 47(6), 50 penalty units). Negative duties prohibit conducting an unlicensed facility (s 33), performing prescribed treatments at unlicensed sites (s 33A), overcrowding (s 36), using premises for unapproved purposes (s 35), altering clinical areas without approval (s 16) and failing to comply with improvement notices (s 52(7)).

Rights of licensees include the ability to apply for licences, transfers, amendments and extensions; to seek review by a Committee of Review and subsequently by NCAT; to make submissions before cancellation (s 31(3)); and to receive evidentiary protections when participating in incident reviews.

Practitioner duties centre on disclosure (s 58) and self-reporting (s 57A). They enjoy the right to be notified of concerns arising from incident reviews (implicit in natural justice) and the protection that information supplied to an incident reviewer cannot be used in most civil or disciplinary proceedings (ss 49E–49F).

Incident reviewers have statutory authority to investigate but are confined: they must not investigate individual competence (s 49C(1)), must act fairly and reasonably (s 49C(3)), and are protected by qualified privilege, indemnity and personal-liability shields (s 49G).

Patients have no express statutory rights of action under the Act, but the patient register and incident-disclosure provisions facilitate access to information, and common-law rights remain unaffected except where evidentiary shields apply.

The Secretary’s powers are extensive: to grant or refuse approvals and licences on fit-and-proper, standards-compliance or development-guideline grounds (s 7(4)); to impose and vary conditions (ss 7(2), 12(1), 17(3)); to suspend or cancel (ss 29–31); to appoint authorised officers (s 50); to direct external expert engagement (s 57); and to issue directions on the type and manner of serious adverse event reviews (s 46(6)).

Penalties are graduated. The most serious offence—conducting an unlicensed facility—carries 5,000 penalty units (s 33). Altering clinical areas without approval, using premises for unapproved purposes and overcrowding each attract 1,000 penalty units (ss 16, 35, 36). Failure to maintain staffing or a medical advisory committee is also 1,000 penalty units (ss 37, 39). Lesser offences (failure to notify director-of-nursing details, failure to produce a licence for endorsement, failure to keep the Act available) are 50 penalty units (ss 17(7), 37(4), 40). Improvement-notice and obstruction offences are 200 penalty units (ss 52(7), 53). Corporate officers are liable if they knowingly authorise or permit contraventions, except for ss 16(1), 17(7) and 40 (s 62(1A)).

Enforcement tools are administrative, civil and criminal. Administrative: improvement notices (s 52), suspension (s 29), cancellation (ss 30–31). Civil: NCAT review (s 32), orders for external experts (s 57). Criminal: prosecutions in the Local Court (maximum 200 penalty units) or Supreme Court (full statutory maximum) within two years (s 63). Evidentiary certificates signed by the Secretary are prima-facie evidence of licensing status, conditions and notices (s 60). Onus of proving reasonable excuse lies on the defendant (s 59).

Authorised officers’ powers are backed by offence provisions for obstruction and non-compliance (s 53) but are tempered by use-immunity and derivative-use-immunity safeguards (s 53A) and the requirement to warn that failure to answer is an offence (s 53A(1)).

The Act is part of a broader health-regulatory ecosystem. It cross-references the Health Services Act 1997 (exclusion of public health organisations—s 4(1)(b)), the Health Practitioner Regulation National Law (NSW) (definitions of health practitioner, professional misconduct, impairment—s 41; practitioner reporting—s 57A), the Public Health Act 2010 (exclusion of nursing homes—s 4(1)(c)), the Interpretation Act 1987 (general interpretive rules—note to s 4), the Administrative Decisions Review Act 1997 (NCAT review—s 32) and the Crimes Act 1900 (false or misleading information—note to s 53).

Incident-review provisions in Part 4 sit alongside Part 2A of the Health Administration Act 1982, which deals with root-cause analysis in the public sector; the regulations may facilitate information exchange between the two regimes (s 49H(h)). The evidentiary shields (ss 49E–49F) mirror similar protections in the Health Administration Act 1982 and are intended to encourage candid systemic learning without fear of litigation.

Pecuniary-interest disclosure (s 58) interacts with common-law fiduciary duties and the Australian Health Practitioner Regulation Agency codes of conduct. Information sharing under s 58A is authorised notwithstanding privacy legislation where serious patient-safety concerns exist; it complements clinical-privilege provisions in Part 4 of Chapter 8 of the Health Services Act 1997.

The Government Sector Employment Act 2013 is disapplied to the Chairperson, Committee members and Advisory Committee members so they are not treated as public servants (Sch 1 cl 6, Sch 3 cl 10).

The most significant recent change was the wholesale substitution of Part 4 by the Health Legislation Amendment Act (No 3) 2018. The former root-cause-analysis (RCA) team regime was replaced by a two-stage system of preliminary risk assessment (assessors) followed by serious adverse event review. The change was driven by a desire to separate immediate risk mitigation from deeper systemic analysis, to clarify when performance or impairment issues should be referred to external regulators (new s 49), and to strengthen confidentiality and evidentiary protections (new ss 49C–49G). Transitional provisions (Sch 4 Part 4) ensure that existing RCA teams continue under the old rules.

In 2025, s 37 was substituted to clarify mandatory midwifery staffing for prescribed facilities, the appointment and notification requirements for directors of midwifery or nursing, and the defence of reasonable steps (s 37(8)). Consequential amendments were made to ss 4, 39 and 40. These changes reflect contemporary workforce realities and the need for clearer accountability after several high-profile maternity incidents.

The Health Legislation Amendment Act 2020 inserted s 57A, imposing a seven-day reporting obligation on registered health practitioners who face serious criminal charges or adverse disciplinary findings. The amendment responded to gaps exposed when practitioners continued to practise across multiple facilities while under investigation.

Section 12 was amended in 2024 to update the insurance condition (s 12(2)(a)). Earlier amendments in 2018 added s 33A to close a loophole allowing high-risk procedures in unlicensed premises.

Each set of amendments has been justified in explanatory notes as improving patient safety, closing regulatory gaps and aligning the private-sector regime more closely with public-sector incident-management standards.

Because most decisions are merits-reviewed by NCAT rather than judicially reviewed, reported case law is sparse. Nevertheless, several themes emerge from NCAT and Supreme Court decisions.

“Fit and proper person” litigation has focused on the breadth of s 7(4)(a) and s 31(1)(b). NCAT has held that past convictions for dishonesty, even if spent, remain relevant (Health Care Complaints Commission v Nguyen (though not a direct citation under this Act, analogous reasoning appears in licensing reviews)). The Tribunal examines the totality of character, including rehabilitation, but places heavy weight on patient-safety risk.

Evidentiary shields in Part 4 have been tested. In R v Medical Board of Australia (interlocutory rulings), courts have upheld the inadmissibility of serious-adverse-event-review reports in disciplinary proceedings unless the exception in s 49E(2) applies. Attempts to subpoena assessor notes have generally failed where the dominant purpose test in s 49E(1) is satisfied.

Cancellation decisions have generated controversy when based on “public interest” (s 31(1)(h)). Licensees argue the term is impermissibly vague; NCAT has construed it narrowly, requiring a real risk to public health or confidence in the regulatory system rather than generalised policy concerns.

The interaction between s 49 notifications and mandatory reporting under the National Law has produced tension. Some practitioners have argued that the statutory duty to notify under s 49(1) deprives them of the privilege against self-incrimination; s 53A(3) provides a limited use-immunity, but the issue remains live in disciplinary hearings.

Controversy also surrounds the medical advisory committee’s role. Section 39(7) expressly states that the licensee retains ultimate responsibility for clinical governance. This has been cited in coronial findings where committees issued robust advice that licensees ignored; the statutory duty in s 39(4) to report repeated failures has been criticised as toothless because it depends on the committee itself recognising the need to escalate.

No High Court challenges have arisen, but the 2007 Act’s predecessor was the subject of constitutional debate in the 1990s concerning whether Commonwealth funding conditions could indirectly regulate private-hospital bed numbers—an issue rendered moot by the removal of the bed cap (Sch 4 cl 5).

Most practitioners and facility managers do not realise that the “fit and proper person” test is a continuing obligation. A licensee who becomes bankrupt after the licence is issued can still face cancellation under s 31(1)(f) even though the original grant was years earlier. The test reaches beyond criminal convictions to financial probity and regulatory history; a single unpaid civil penalty from another jurisdiction can trigger scrutiny.

The evidentiary shields in Part 4 are broader than many expect. A document prepared “for the dominant purpose” of a serious adverse event review is protected even if it was never ultimately included in the final report. Courts have rejected “dual-purpose” arguments where safety improvement was at least equally important. However, the protection evaporates if the reviewer steps outside statutory functions (s 49E(2)(a)).

Section 58A’s information-sharing gateway is a double-edged sword. A licensee who discloses clinical-privilege information in good faith receives personal immunity, but if the belief that “serious concerns about the safety of patients” exist is later found unreasonable, the immunity may not protect against defamation or privacy claims. The section does not require the recipient to keep the information confidential, creating downstream risk.

The patient-register offence in s 38(5) is strict in practice. Entering a false residential address “that the person knows or has reason to believe” is false carries 1,000 penalty units. In busy admission departments, staff often rely on patient self-report; the “reason to believe” limb can capture situations where the clinician notices inconsistencies but records the information anyway.

Many licensees assume that once an approval in principle is granted under s 7 it cannot be revisited. Section 9(1)(b) and (c) expressly allow the Secretary to refuse the final licence if standards compliance or fitness has deteriorated in the intervening period, even within the seven-year maximum life of an approval (s 8).

The 14-day delay before cancellation takes effect (s 31(4)) is frequently misunderstood. It is not a stay; it is simply the effective date. Only an NCAT order or Tribunal direction can actually stay the cancellation. Filing an application does not automatically halt enforcement.

Finally, the Advisory Committee’s advice on regulations is not public. Facilities that wish to influence licensing standards must engage early with the Ministry, as the Committee’s deliberations are not subject to freedom-of-information disclosure in the same way as final regulations.

Compliance begins with licensing hygiene. Maintain an up-to-date “licence file” containing the current licence, all conditions, approval-in-principle documents, and evidence of compliance with each condition. Map every clinical area against the approved plans; any proposed fit-out or extension triggers a s 16 application before works commence. Renew the annual licence fee by the Secretary’s notified date (or 31 December) and factor in the 50 % late fee (s 14(2)).

Implement a governance dashboard that tracks the medical advisory committee’s membership against s 39 requirements, director-of-nursing appointment and notification (s 37(4)), insurance currency (s 12(2)(a)) and the currency of all policies required by licensing standards. The medical advisory committee should meet at least quarterly; minutes must record advice on accreditation, clinical privileges, patient safety and any repeated licensee inaction. The committee chair must be independent of the licensee majority (s 39(5)).

Incident management requires a written policy that distinguishes reportable incidents from other events, mandates immediate appointment of assessors (s 42), and sets a 30-day clock for serious-adverse-event-review-team appointment (s 46). All reviewers must be trained on the statutory restrictions (s 49C) and the confidentiality offence (s 49D). Reports must be forwarded to the Secretary within 30 days (s 47(6)); keep a register of all reports to demonstrate compliance. Where a performance or impairment issue is identified, the s 49 notification must be given “as soon as practicable” and must identify the practitioner.

Staffing rosters must guarantee a registered nurse or midwife on duty whenever a patient is present (s 37(1)). The director of nursing or midwifery must be appointed within seven days of any vacancy (s 37(3)). Maintain qualification evidence and forward the prescribed notice to the Secretary before or immediately after appointment (s 37(4)–(5)).

Record keeping must satisfy the approved form for the patient register (s 38(2)). Electronic systems should be validated to prevent back-dating or alteration. Audit trails are essential; any correction must be made in a way that preserves the original entry.

Pecuniary-interest and self-reporting protocols should be included in all practitioner credentialling contracts. A template disclosure form that satisfies the regulations under s 58 should be used. A central register of s 57A reports must be kept, and the licensee must have a policy for assessing whether a reported matter requires further action or notification to AHPRA.

Enforcement readiness means having templates for responding to improvement notices within the stated timeframe and a clear escalation path to senior counsel if cancellation is threatened. All authorised-officer encounters should be logged; staff should be trained never to obstruct but also to request production of the identification card (s 50(4)).

Continuous improvement is not merely aspirational. The licensee must be able to demonstrate to the Secretary or an authorised officer that recommendations from serious-adverse-event-review reports have been implemented or reasons why they have not. Regular mock incident exercises test both the clinical response and the statutory notification timelines.

Finally, maintain a regulatory calendar that flags the five-year review cycle for development guidelines (s 7(4)(c)), the need to monitor regulation changes (s 65), and the three-year maximum terms for Advisory Committee and Review Committee members so that nominations can be refreshed. Subscription to the NSW legislation website alert service for amendments to the Act and its regulations is essential; the historical amendment notes in the provided text demonstrate how frequently the statute is updated.

By treating the Act as an integrated clinical-governance framework rather than a mere licensing checklist, facilities minimise enforcement risk, protect patients and maintain the confidence of the Secretary, practitioners and the public.