Compliance

As reported in the Administrator's September 2026 Compliance Report, with respect to the timeliness of Submission A, 6 out of 8 States submitted all 2026-27 Service Agreements to the Administrator, with Victoria and South Australia providing partial submissions.

Service Agreements between the States and LHNs support transparency of public hospital funding and services and are provided to the Administrator (once agreed). Service Agreements are to include, at a minimum:

a. the number and broad mix of services to be provided by the LHN, to inform the community of the expected outputs from the LHN and allow the Administrator to calculate the
Commonwealth’s funding contribution

b. the quality and service standards that apply to services delivered by the LHN, including the Performance and Accountability Framework and the level of funding to be provided to the LHN under the Service Agreement, through ABF and Block funding

c. the teaching, training and research functions to be undertaken at the LHN level.

In addition, the funding paid on an activity basis to LHNs will be based on the price set by that State as reported in Service Agreements: the State Price. The Administrator and NHFB have been working with States and Territories to highlight inconsistencies in Service Agreements and identify where improvements can be made. This includes
on accuracy of State Prices and identification of in‑scope and out-of-scope activity.

Parties to the Addendum agreed, at a minimum, to maintain levels of funding for public hospital services through the Pool for 2020–21 to 2025–26 at not less than the level of funding for 2018–19. The assessment of Maintenance of Effort focuses on in-scope public hospital services under the NHR Agreement.

Out-of-scope activity is defined as non-hospital services or those public hospital services with a funding source other than the NHR Agreement.

This work has identified some inconsistencies in the level of in-scope and out of scope funding transacted through the Pool as well as pricing and activity information published in LHN Service Agreements. The Administrator and the NHFB will continue to work with all Parties to the Addendum towards achieving consistency and transparency in the reporting of public hospital funding.