Ongoing refinement and extensive consultation reflected in new pricing framework for Australian public hospitals

The annually updated pricing framework outlines the policy and evidence used to inform development of the National Efficient Price (NEP) Determination and the National Efficient Cost (NEC) Determination for 2025–26. 

The determinations are used to calculate Australian Government funding for public hospital services for the 2025–26 financial year, and will be published in March 2025.   

IHACPA conducted public consultation on the policy decisions outlined in the pricing framework through the Consultation Paper on the Pricing Framework for Australian Public Hospital Services 2025–26. The consultation received 28 submissions from stakeholders, including the Australian Government, state and territory governments, professional health organisations, private health industry and the public. The consultation report summarises the feedback provided and our responses to how we considered this information in developing the pricing framework. 

IHACPA Chair, Mr David Tune AO PSM said,

For NEP25, IHACPA intends to progress to pricing community mental health care services using the Australian Mental Health Care Classification (AMHCC) Version 1.1, following 4 years of shadow pricing using AMHCC Version 1.0. This milestone represents the first patient service category transitioned from block funding to activity based funding since IHACPA’s inception.

‘Continuing the important transition from block funding to activity based funding in community mental health care is the culmination of more than a decade of work by IHACPA including extensive consultation with our stakeholders,’ Mr Tune said.

The important shift towards a consumer-centred classification and funding model will improve funding transparency, provide greater clarity to hospitals and service providers, and ensure funding is based on the volume, type and complexity of mental health care in a community setting.

More information

• Pricing Framework for Australian Public Hospital Services 2025–26
• Pricing Framework for Australian Public Hospital Services 2025–26 – Consultation Report
• Consultation Paper on the Pricing Framework for Australian Public Hospital Services 2025–26
• IHACPA Work Program and Corporate Plan 2024–25