Service Agreements between the States and LHNs support transparency in public hospital funding and service delivery, and are provided to the Administrator once finalised. Service Agreements are to include, at a minimum (E7):
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 (A92).
The Administrator and NHFB have been working with States and Territories to highlight inconsistencies in Service Agreements and identify where improvements can be made including on:
- accuracy of State Prices
- identification of in-scope and out-of-scope activity
- timely provision of Service Agreements to the Administrator.
As reported in the Administrator's December 2024 Quarterly Compliance Report, four out of eight States and Territories submitted all 2024-25 Service Agreements (ABF and Block LHNs) to the Administrator, with New South Wales, Victoria, Queensland and South Australia providing partial submissions to date. 110 out of 135 service agreements have been submitted to the Administrator.
Of these submissions, 49 out of 110 Service Agreements received were submitted to the Administrator within the required 14 calendar days from finalisation or amendment.
Of the 95 ABF LHN Service Agreements submitted to the Administrator, 31 align to activity estimate submissions as at 30 November 2024, compared to 17 out of 49 in September 2024.
