Department of Health

Key messages

  • The Victorian Government funds renal health services in three streams: activity-based funding, funding for outpatient services and funding for home dialysis.
  • Home dialysis is funded through a capitation payment to the patient’s specialist renal service.

The Victorian Government funds renal health services in three streams:

  • Funding for public dialysis services comprises an activity-based funding stream (WIES) to cover dialysis services, including consumables and coordination costs.
  • Funding for specialist services for non-admitted (outpatient) clinical consultation is undertaken via WASE.
  • Home dialysis is funded through a capitation payment to the patient's specialist renal service.

Activity-based funding

The WIES activity-based payment is paid to the provider of the public dialysis service. This payment applies only to activity reported as L61Z (same-day renal dialysis) and does not apply to a patient undergoing dialysis while an inpatient for other conditions.

Health services providing satellite dialysis are then required to make a mandatory payment, comprising two components, per L61Z dialysis separation to their specialist hub to cover:

  • Equipment and consumables which includes:
    • haemodialysis consumables
    • provision of haemodialysis and water treatment equipment
    • haemodialysis and water treatment equipment maintenance and servicing
    • renal water testing
    • specialist clinical oversight of the satellite unit.
  • Specialist services which includes:
    • routine medical review related to dialysis treatment
    • 24 hour on-call and emergency service
    • other specialist renal coordination and services.

In 2018–19 the mandatory payment schedule for satellites within a contracted arrangement with a hub is:

  • $110 to cover equipment and consumables
  • $78 to cover specialist services.

The payment is consistent across health services and is based on expected activity levels, in line with the health service payment schedule. It is essential that this payment is made in a timely manner. Payment adjustments to reflect actual activity should occur at least twice a year, with the detailed process negotiated between health services.

Where satellite facilities have patients from more than one specialist hub service, the specialist support component of the mandatory payment will be made to the specialist hub with clinical oversight of the satellite service. That specialist hub will then pass on the specialist support component to the hub service nominated by each patient as per existing cross-charging practices.

The remainder of the WIES retained by the satellite dialysis provider covers:

  • nursing care
  • routine pathology
  • waste management, domestic or cleaning services
  • power
  • supply of some linen
  • limited catering
  • supply of departmental services
  • provision of some equipment (for example: chairs, dressing trolleys)
  • telecommunications
  • medical records
  • patient transport

Satellites may purchase equipment, servicing and consumables directly from suppliers. This option is only available:

  • to satellites at the expiry of their current contract with the hub
  • upon expiry of the hub’s contract with a supplier that includes the satellite’s activity where there is no contract in place.

Once existing contracts expire the options for satellites are to:

  • continue purchasing through their current affiliated hub at an agreed price
  • arrange for another hub to provide these goods and services at an agreed price
  • purchase the goods and services directly from the supplier without any hub involvement, at the Health Purchasing Victoria negotiated price.

Should satellites decide to purchase equipment, services and consumables directly from suppliers, the satellite unit management must have arrangements for ongoing specialist clinical governance and oversight of the unit to ensure quality and safety.

In the event of a satellite dialysis service purchasing equipment, consumables and services directly from a supplier, the equipment consumables portion of each L61Z payment should be retained by the satellite service.

The department expects that satellites discuss any proposed change to the purchasing of equipment and consumables with their affiliated hub to ensure Victorian renal patients continue to receive safe, high-quality renal services.

Activity targets

There are no separate activity targets for L61Z dialysis activity. WIES targets for dialysis are incorporated into overall acute targets.


Tier 2 funding

Tier 2 funding for specialist services supports non-admitted clinic activity relating to the management of chronic kidney disease and end-stage kidney disease.

This Department has introduced the ‘Weighted Ambulatory Service Event’ (WASE) funding model for acute non-admitted specialist clinic activity that is not funded by another Victorian funding model (e.g. home renal, radiotherapy, home enteral nutrition).

WASE will include public and private activity, which will be counted as service events and classified according to the national Tier 2 classification with cost weights calculated according to Victorian cost data.

These clinics must be registered with the Department of Health & Human Services and reported through VINAH.

Home dialysis

Patients managing their own dialysis at home are currently funded through a capitation payment to the patient’s specialist renal service.

For 2018–19, the home dialysis block capitation grant is:

  • Home capitation - $56,649.00 per patient per year pro rata.

Hub health services are required to make a mandatory payment to each patient managing their own dialysis in the home as partial reimbursement for costs incurred by the patient. For 2018 –19 the payments are:

  • Home peritoneal dialysis - $804.00 per patient per year pro rata
  • Home haemodialysis - $2,120.00 per patient per year pro rata

Activity targets

Home dialysis activity is paid to actuals based on end of month data and is not capped.

Recall for services that do not achieve targets will be negotiated as per departmental policy and funding guidelines.

Reviewed 19 July 2018


Contact details

Enquiries about renal health in Victoria

Renal health Department of Heath & Human Services

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