Department of Health

Key messages

  • The Victorian Government funds renal health services in 3 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 National Weighted Activity Unit (NWAU) to cover dialysis services, including consumables and coordination costs.
  • Funding for specialist services for non-admitted (outpatient) clinical consultation is undertaken via NWAU.
  • Home dialysis is funded through a capitation payment to the patient's specialist renal service.

Activity-based funding

The funding model for routine haemodialysis in designated public health services providing same-day haemodialysis is through the admitted NWAU payment paid to all dialysis providers, and a non-admitted activity component.

Renal activity and NWAU are incorporated within the total agency public and private NWAU activity targets. As such, they are subject to the standard health service recall policy.

The NWAU recall policy does not apply to small rural health services, which continue to be funded to actual renal activity in 2021–22. Their health service targets have been adjusted based on the average actual activity over the past three years. Recall adjustments for small rural health services will be made at the end of the financial year.

Currently all health services providing satellite dialysis are required to pay their hubs a set rate for each L61Z dialysis separation based on expected activity levels. In 2021–22, the payment rates have been set at:

  1. $114 to cover haemodialysis equipment and consumables (including equipment maintenance and servicing and real water testing)
  2. $80 to cover specialist services (including review and 24-hour on-call service including emergency, specialist renal coordination and services).

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 include:
    • routine medical review related to dialysis treatment
    • 24 hour on-call and emergency service
    • other specialist renal coordination and 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 NWAU 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. NWAU targets for dialysis are incorporated into overall acute targets.


NWAU 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 NWAU 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).

NWAU will include public activity only, 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 and reported through Victorian Integrated Non- Admitted Health (VINAH).

Home dialysis

For 2021–22, both home peritoneal dialysis and home haemodialysis will continue to be paid as a specified grant with attached NWAU targets.

NWAU targets have been updated based on the latest 12 months of activity. A recall/throughput adjustment will be applied at the full rate at the end of 2021–22 for health services whose activity is below or over target.

Home dialysis funding includes payments to be administered by the hub services.

Home-based dialysis will continue to be funded to actual activity.

In 2021–22, reporting of home renal dialysis services will be required through VINAH.

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 10 April 2024


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