Victoria - Public Hospitals Policy and Funding Guidelines 1997-1998
Section B: Standard Conditions of Funding2. Basis for Determining Government Funding
2.1 Components of Funding
A hospital's funding will be based on ;
- Target A volumes, paid at the relevant rate;
- Target A Margin volumes at the relevant rate;
- Option WIES accepted by the hospital or Network, paid at the relevant rate;
- Tender WIES sought by the hospital or Network and allocated by the Department, and paid at the tendered rate;
- Non-Admitted Patient Grants
- Training and Development grant; and other specified grants.
These grants and admitted patient and outpatient target volumes are shown in Section A of the Public Hospitals Policy and Funding Guidelines 1997-98 and shown in the agency's Health Service Agreement.
Funding is provided to hospitals and Networks on the basis that the current range of services provided are continued. Before hospitals or Networks undertake a significant change in the range or scope of services, the planning implications of such a move must be discussed and agreed with the Department. In rural areas, the appropriate discussion should be held with the Regional Director, in the metropolitan area discussions should be held with the Director, Acute Health.
Hospitals will also receive revenue from private patients. Government Grant payments to hospitals will consist of the hospital's entitlements as specified in the HSA and Conditions of Funding, net of relevant patient revenues (see clause 3).
2.2 Calculation of the Payment For Admitted Patient Services
2.2.1The term "weighted inlier equivalent separation" means the measure of activity calculated by multiplying the DRG weight by the number of Inlier Equivalent Separations in the DRG and summing over all DRGs. For 1997-98 this statistic will be abbreviated as WIES5. The method and calculation of WIES5 is shown in Section C of the Public Hospitals Policy and Funding Guidelines 1997-98.
Fixed Overhead Grant
2.2.2The following rates have been applied to Target A (fixed) when calculating the fixed overhead grant for 1997-98:
Major Providers (Network and Geelong): $749 Rural Groups B ( greater than 10,000 WIES) $847 Rural Group B (less than 10,000 WIES) & C $867 Rural Group D $916 Rural Group E $916 Under the new formula separate weights have been provided for certain DRGs for the purpose of calculating fixed and variable WIES5 (i.e. for Renal Dialysis and Prosthetics - refer to Major Changes, Calculation of WIES5, Policy & Funding Guidelines 1997/98). Under WIES5 the fixed Target A is lower or equal to the variable Target A.
Variable Grant
2.2.3The Variable admitted patient payments are calculated as follows:2.2.4
(a) For hospital throughput up to the level prescribed by Target A, the variable case payment is $1,327 per WIES5 for a public patient and $939 per WIES5 for a private patient (refer Victoria - Public Hospitals Policy and Funding Guidelines 1997-98).
(b) Hospitals have been given a 2 percent margin Target A which will be paid for at a rate of $929 for a public patient, $657 for a private patient.
(c)Throughput above the agreed levels will not be paid for.
(d) Same day "medical" targets (for those DRGs specified in the Policy and Funding Guidelines 1997-98 are specified in each agency's Health Service Agreement as a percentage of total actual throughput. Same day medical throughput in excess of the specified target will not be funded by the Department.
Option & Tender Pool2.2.5Conditions for these payments are outlined in the Policy and Funding Guidelines 1997-98.
Quarterly targets will be determined by the agency. Variable payments at the end of the second, third and fourth quarters will be recalculated on a year to date basis (ie annualized) based on actual throughput, and adjustments to previous payments will be made.
2.2.6Nursing Home Type Patient PaymentThe hospital will receive $119 for each nursing home type bedday as reported in the VIMD.
2.2.7
Rural/Isolated PaymentThis payment provides an allowance for isolated and rural hospitals for additional costs incurred in transferring patients in non-metropolitan areas. The payment is as follows:
For isolated hospitals the additional ambulance transfer payment is $14 for each weighted inlier equivalent separation up to the agreed contract volume.
For other rural hospitals the additional payment is $35 for each weighted inlier equivalent separation up to the agreed contract volume.
2.2.8
Maternity ServicesFunding for birth related DRGs continues to include the cost of domiciliary services. The provisions with regard to Maternity Services are expanded in Circular 25/1994.
2.3 DVA Patients
Not withstanding the provisions of Clause 2.2 the Department will pay the full variable rate for all DVA patients (as reported in the VIMD) in excess of the number included within the target. Note the option allocation for 1997-98 for rural hospitals has been increased to provide for additional DVA throughput performed during 1996-97.For each hospital, the Health Service Agreement will specify the DVA patient throughput WIES5 within target A and the options-allocations.
2.4 Non-Admitted Patients Grant
2.4.1The Victorian Ambulatory Classification System (VACS) will be implemented in selected hospitals from 1 July 1997. For details of the VACS system and funding for 1997-98 refer Section A of the Public Hospitals Policy and Funding Guidelines 1997-98.2.4.2The non-admitted patients grant is for the provision of services specified in the Health Service Agreement.2.4.3If there is a significant reduction in services to non-admitted patients the grant may be reduced during the course of the financial year. (A significant change for the purpose of this clause is defined as one which involves a reduction in the service levels of more than ten percent.)2.4.4
Hospitals are responsible for providing such ambulance transport as is necessary, on clinical grounds, to ensure access for outpatients without charge to these patients.
2.5 Training and Development Grants
2.5.1The Training and Development Grant is allocated to fund the specific programs and positions specified in the Health Service Agreement. The grant will be paid to the employer of the funded position. Where training positions include a period of rotating placements, arrangements between participating agencies should ensure that the host agency receive a proportion of the grant equal to the length of the rotation.2.5.2
Where positions remain unfilled by staff with credentials approved by the Department or programs offered by the hospital are not operated at budget levels, the Training and Development Grant will be adjusted to reflect actual performance.2.5.3
Graduate Nurse Programs must meet the following criteria:(a) hospitals must participate in the Nursing Computer Match Service in order to attract funding for Graduate Nurse positions.
(b) no fees are to be charged to nurses applying for Graduate Nurse positions.
(c) there is a program of theory which is not less than 40 hours over a 12 month period.
(d) the services of a Nurse Educator are used to co-ordinate the Program; and
(e) there is adequate supervision of new graduates in their first three months.
2.5.4
The research and development component of the Training and Development Grant is designed to fund research infrastructure for the hospital (including support for institutional ethics committees) together with support for academic units based at the hospital, including units funded by universities and independent research institutes. Hospitals in receipt of this grant will need to demonstrate that at least the amounts allocated have been expended for these purposes.2.5.5
The Training and Development Grant also includes a component (10%) designed to fund the cost associated with clinical placements of undergraduate students including medical, nursing and allied health students.
2.6 Payments for Specified Purposes
2.6.1Additional payments will be provided to the hospital for the purposes specified in the Health Service Agreement.2.6.2
Where the grant is based on a particular level of service, and there is a significant reduction in such services, the grant may be reduced during the course of the financial year. (A significant change for the purpose of this clause is defined as one which involves a reduction in the service levels of more than ten percent).
2.7 Commonwealth-State Programs
2.7.1Hospitals may receive specific purpose payments arising from Commonwealth-State Agreements. Funding received under such arrangements is subject to each program's specific conditions.
2.8 Victorian Maintenance Dialysis Program
2.8.1Hospitals participating in the Victorian Maintenance Dialysis Program will receive funding in two components: a program grant and (for admitted patients) a case payment.2.8.2
A grant will be provided for each patient receiving dialysis supervised by the hospital. The rates are:
Peritoneal Dialysis: $34,200 pa Home Haemodialysis: $32,200 pa In-Centre & Satellite Haemodialysis: $26,400 pa This grant is provided for patients receiving care supervised by a public hospital and will not be paid for patients dialysed in private hospitals.
2.8.3
The grant will be based on monthly statistical returns from the hospital (AIMS Form 306/S6).2.8.4
Funds will be advanced on the basis of current patient numbers as recorded in the Health Service Agreement and payments adjusted for actual service provision on a quarterly basis.2.8.5
Total numbers of patients being dialysed in Victoria will be monitored, and if the increase in numbers exceeds historical trends, the payments may be capped by the Department.2.8.6
For dialysis services provided within the hospital, variable payments will also result from the VIMD coding of the admitted patients as set out in Section C of the Public Hospitals and Funding Guidelines 1997-98: Calculation of WIES5.2.9 Rehabilitation
2.9.1Rehabilitation is defined as the process of restoring a disabled person to his/her fullest physical, mental or social capability through the combined and coordinated use of medical or physical, educational and vocational measures. Only those agencies designated by the Department as providers of rehabilitation services are eligible for payment of rehabilitation grants.2.9.2
There will be two levels of designated rehabilitation programs:Level 1 rehabilitation is for use by designated specialty programs providing rehabilitation following spinal cord injury, head injury or amputation and where the rehabilitation episode directly follows the acute care episode in which the injury was the principal diagnosis. Subsequent episodes of care following the initial rehabilitation episode are not classified as Level 1.
Level 2 rehabilitation programs fully meet the criteria for designation as set out in the document Designation of Rehabilitation Programs (February 1995).
2.9.3
Funding will be provided at the following rates:Level 1:
$334 per bedday Level 2:
$278 per bedday A capped number of beddays will be allocated to designated agencies for each level of service. Rehabilitation beddays will be calculated from data reported in the VIMD. Where the actual number of beddays provided is less than the allocation, payments will be adjusted to reflect the actual service provision. No payment will be made for services in excess of the target.
2.10.1Hospitals accredited with the Australian Council on Healthcare Standard, hospitals granted statutory immunity under Section 139, Health Services Act 1988, and hospitals who have achieved certification against ISO 9000 are deemed to have met this requirement. All hospitals are required to demonstrate the development of a quality assurance plan relating to all aspects of the service and to review implementation on an annual basis.2.10.2
By the year 2000 the Division will require that all providers of public acute services will have secured formal third party accreditation/certification. Accreditation/certification will become the base line indicator of quality both from public or private providers. All agencies should be either pursuing third party accreditation and/or working to maintain current accredited status.2.10.3All Group A1, A2 and B hospitals (and aggregated hospitals previously classified as Group A1, A2 or B) which on 1 March 1998 are accredited with the Australian Council on Healthcare Standards (ACHS), or have by 1 March 1998 scheduled an accreditation visit will receive an additional specified payment of $30,000. All other hospitals (and aggregated hospitals previously classified Group C) accredited with ACHS or with accreditation visits scheduled by 1 March 1997 will receive $15,000. Grant payments under this clause will be extended to hospitals certified against the ISO 9000 series on presentation of the Certification of Registration. However, only one grant pursuant to this clause will be made.
2.11 Specific Purpose Grants for Admitted patient Services to Persons from Non-English Speaking Backgrounds (NESB Grants)
2.11.1Networks and hospitals will be notified of the new NESB grants for 1997-98.2.11.2The broad intent of the NESB grant is to encourage hospitals to improve service delivery to admitted patients of non-English speaking background. Hospitals receiving grants are required to be able to spend the amounts allocated on strategies which are consistent with those outlined in the publication Working with Patients from non- English speaking backgrounds - Guidelines for Health Agencies.2.11.3A non-admitted component has been introduced for this year. Grants of $1.8 million will be paid for NESB as part of the non admitted patient budget for 1997/98.2.12 Elective Surgery Enhancement Program
Elective surgery performance nuses will generally be determined in accordance with the provisions of Appendix 3 of the Public Hospital Policy & Funding Guidelines 1997-98.
2.13 Emergency Services Enhancement Program
Emergency services performance bonuses will be determined in accordance with the provisions of Appendix 3 of the Public Hospital Policy & Funding Guidelines 1997-98.
2.14 Hospital in the Home
Hospital in the Home incentive payments will be determined in accordance with the 1997-98 HITH Policy.
2.15 Cash Flow to Hospitals
2.15.1Subject to meeting the requirements of the Hospital Conditions of Funding, the fixed Grant will be made available to the hospital in twenty four (24) payments based on negotiated cash flow requirements.2.15.2Cash flow to the hospital for variable payments will be based on the targets specified in the Health Service Agreement.2.15.3Cash advanced for variable payments and for Elective Services & Emergency Services Performance Bonuses will be adjusted quarterly to match hospital earnings.2.16 Redirection of Funds
Where total earnings for the Acute Health Program exceed the expenses incurred in delivery of the full quantity of services specified in the Health Services Agreement, the surplus may be used by the hospital for any purpose connected with its agreed function.
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