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About the Independent Health and Aged Care Pricing Authority
The Independent Hospital Pricing Authority (IHPA) is an independent government agency established under Commonwealth legislation as part of the National Health Reform Agreement, which sets out the intention of the Australian Government and state and territory governments to work in partnership to improve health outcomes for all Australians.
IHPA’s primary responsibly has been to enable the implementation of national activity based funding through the annual determination of the national efficient price (NEP) and national efficient cost (NEC) since its establishment in 2011. The NEP and NEC Determinations play a crucial role in calculating the Commonwealth funding contribution to Australian public hospital services, and offer a benchmark for the efficient cost of providing those services as outlined in the NHRA.
Delivered on 11 May 2021, the Federal Budget 2021–22 contained two significant measures that impact IHPA’s current role of pricing for public hospital services.
The first measure, in response to the Royal Commission into Aged Care Quality and Safety, is the expansion of IHPA, which was renamed the Independent Health and Aged Care Pricing Authority (IHACPA).
Following the passing of the Aged Care and Other Legislation Amendment (Royal Commission Response) Act 2022, the renamed IHACPA will take on the role of providing costing and pricing advice on residential aged care and residential respite care as it is renamed to IHACPA effective 12 Friday 2022.
Under this measure, IHACPA will inform Australian government decisions on annual funding increases in residential aged care from 1 July 2023. IHPA will also have a role in providing pricing advice on home aged care and community aged care services from 1 July 2023.
The second measure involves working with the Australian Department of Health and Aged Care and key stakeholders to support reform to the Prostheses List, which aims to reduce the cost of medical devices used in the private health sector and streamline access to new medical devices.
The IHACPA website provide further information on the agency’s expansion. Interested stakeholder seeking to receive email updates on IHACPA's work program may subscribe to our mailing list.
Scope of this consultation
This Consultation Paper will only apply to the development of the pricing and costing advice for Australian aged care services. A separate Pricing Framework for the pricing of Australian public hospital services is released for annual consultation in June, with the policy decisions published annually in December.