The basis used to determine NHR payments to the Australian Capital Territory LHNs was advised by the ACT Health Directorate to be as follows:
The annual funding allocation for the ACT in 2014-15 is based on budget neutral modelling. This modelling is based on the historical cost of providing services plus cost indexation. The activity to be funded through Activity-Based Funding is projected on historical activity levels with an allowance for growth for public hospital services in the ACT and derived through the application of the Independent Hospital Pricing Authority determinations.
The payments made by the ACT Government and the Commonwealth Government in June 2014 through the ACT Local Hospital Network Directorate were net of third party revenues, and were paid on the basis of estimated ACT Local Hospital Network activity for the month of June 2014.
Between February and June 2014, the Commonwealth provided Australian Capital Territory with additional public hospital funding of $4,372,547.61 under the funding measure: National Partnership on public hospital system - additional funding. This funding was provided to offset the downward adjustments to 2013-14 NHR funding applied at the 2013-14 Mid-Year Economic and Fiscal Outlook (MYEFO) and the 2014-15 Budget, due to the application of updated NHR funding indexation parameters. A requirement of the provision of this funding was that it is passed on in full through the National Health Funding Pool and/or State Managed Fund to LHNs for activity based and Block Funding, and State and Territory health departments for public health funding.