Department of Health

A patient who receives hospital treatment for a minimum of one night – that is, a person who is admitted to and separated from a hospital on different dates – is classified as an overnight stay patient.

Accommodation fees 

According to section 72.1(2) of the Private Health Insurance Act 2007 an insurance policy covering hospital treatment must provide at least the ‘minimum benefit’ for that treatment. The Private Health Insurance (Benefit Requirements) Rules 2011 made under the Act stipulate the minimum benefits payable by private health insurers for shared ward accommodation in public hospitals. The Commonwealth does not set a minimum benefit for single-room accommodation.

Health services can make their own determination on charging accommodation fees to private patients who receive treatment at their campuses (this applies to both overnight patients and same-day patients). In coming to this decision, health services should consider the following: 

  • the benefit that private health insurance funds will assign to the public hospital in their health insurance products
  • any co-payment a patient is willing to pay as a private patient
  • the amount of any co-payment or excess the hospital can viably forego.

To assist health services with this decision, the Department of Health provides a guide of average costs and nominal cost recovery rates for private patient accommodation.  

Private patient accommodation fees

Where a patient is placed into a single room and they have elected to have a single room they are to be charged the single room rate. Hospitals should not retrospectively seek a single room election from a patient after a private patient is placed into a single room for clinical need. 

Shared room accommodation

For 2021-22, the department has continued to align its recommended shared room fees with the Commonwealth's default minimum benefits to ensure that private patients do not incur gap payments or out of pocket expenses. Health services should note analysis by the department which shows that the actual cost of providing accommodation to private patients is significantly higher than the Commonwealth's minimum benefits.

Patient Classification

Commonwealth minimum benefit for shared room accommodation 2022-23 #

Estimated costs for 2022-23 *

Average cost

Advanced surgery 1 (1-14 days)

$476

$673

Advanced surgery 2 (15+ days)

$331

$579

Surgery/obstetric (1-14 days)

$441

$657

Surgery/obstetric (15+ days)

$331

$607

Medical 1 (1-14 days)

$383

$649

Medical 2 (15+ days)

$331

$624

Psychiatric 1 (1-42 days)

$441

$498

Psychiatric 2 (43-65 days)

$383

$620

Psychiatric 3 (66+ days)

$331

$521

Rehabilitation 1 (1-49 days)

$441

$986

Rehabilitation 2 (50-65 days)

$383

$847

Rehabilitation 2 (66+ days)

$331

$957

Note

# Updated in line with advice from Commonwealth with effect from 1 July 2022

*The average costs are based on the 2020-21 Victorian Cost Data Collection using IPHA indexation rates for for the ensuing years to 2022-23. Includes depreciation loading.

Single-room accommodation 

Patient Classification

 

Estimated costs for 2022-23 *

Average cost

Advanced surgery 1 (1-14 days)

$782

Advanced surgery 2 (15+ days)

$655

Surgery/obstetric (1-14 days)

$1,005

Surgery/obstetric (15+ days)

$712

Medical 1 (1-14 days)

$792

Medical 2 (15+ days)

$779

Psychiatric 1 (1-42 days)

$524

Psychiatric 2 (43-65 days)

$612

Psychiatric 3 (66+ days)

$522

Rehabilitation 1 (1-49 days)

$1,295

Rehabilitation 2 (50-65 days)

$1,023

Rehabilitation 2 (66+ days)

$1,168

Note 

* The average costs are based on the 2020-21 Victorian Cost Data Collection using IPHA indexation rates for for the ensuing years to 2022-23. Includes depreciation loading. 

Patient classifications

The classifications 'advanced surgical', 'surgical' and 'other' are defined in Schedule 1 of the Private Health Insurance (Benefit Requirements) Rules 2011. The item numbers contained in each classification are taken from the Medicare Benefits Schedule (MBS) and based on the complexity and fee charged for the procedure. The determinations contain schedules of MBS item numbers for professional services under each patient classification.

  • Advanced surgical patient is specified in Part 2, Schedule 1 and the item numbers are derived from the MBS.
  • Surgical patient is specified in Part 2, Schedule 1 and the item numbers are derived from the MBS.
  • Obstetric patient is specified in Part 2, Schedule 1 (definition taken from Part 2, Schedule 1).
  • Psychiatric patient is a patient in a hospital who is admitted for the purposes of undertaking a specific psychiatric treatment program that is deemed by the insurer to be relevant and appropriate for the treatment of the patient's disease, injury or condition (definition taken from Part 2, Schedule 1).
  • Rehabilitation patient is a patient in a hospital who is admitted for the purposes of undertaking a specific rehabilitation treatment program that is deemed by the insurer to be relevant and appropriate for the treatment of the patient's disease, injury or condition (definition taken from Part 2, Schedule 1).
  • Other patients are deemed to be any patients in a hospital other than advanced surgical, surgical, obstetric, psychiatric, or rehabilitation patients (definition taken from Part 2, Schedule 1).

For Commonwealth Government advice on the correct benefit level in regard to pre-operative day arrangements, see the Commonwealth Department of Health, Health Benefit Fund circular HBF605.

Reviewed 25 May 2022

Health.vic

Contact details

Street address: 50 Lonsdale Street, Melbourne, Victoria, 3000

Department of Health GPO Box 4057, Melbourne, VIC 3000

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Private Health Industry Branch Commonwealth Department of Health

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