Become a second-tier default benefits eligible hospital

What are second-tier default benefits?

Generally, insurers must pay second-tier default benefits for hospital treatment if:

they do not have a negotiated agreement with the hospital and
the hospital is second-tier default benefits eligible.

Second-tier default benefits are higher than what would otherwise be payable if the hospital was not eligible.

Which hospitals can apply?

To apply to be eligible, a hospital must:

be a private hospital
be accredited
not bill patients for the minimum benefit their insurer will pay
ensure patients can give informed financial consent
agree to give Hospital Casemix Protocol Data to health insurers with every claim for second-tier default benefits.

New hospitals can submit a second-tier application at the same time they apply to be declared a hospital. We will not consider the application until the hospital is declared.

How to apply

Private hospitals can apply at any time.

Read the Second-tier Default Benefits Guidelines first. The guidelines tell you what to include in your application and explain the process in detail.

To apply:

complete the application form
send the completed form and attachments to our second-tier default benefits team
pay the $945 application fee when you receive our invoice.

If your accreditation is first edition, you must provide a sample informed financial consent (IFC) document and procedures as part of your application.

We will tell you the outcome within 60 days of receiving a complete application and fee payment.

If you are reapplying, make sure you apply and pay the fee at least 60 days before your current eligibility expires.

When eligibility expires

Second-tier eligibility expires 60 days after a hospital’s accreditation expires.

Benefit rates

The second-tier default benefit for hospital treatment is at least 85% of the average charge for the equivalent treatment, under that insurer’s negotiated agreements for comparable private hospitals.

Comparable private hospitals are those in the same state and in the same second-tier hospital category. Each health insurer must work out second-tier default benefit rates for each category in each state and territory.

Annual review of hospital categorisation

Every year we review the second-tier categories of all private hospitals to publish a list determined to be current as of 1 August. To achieve this we engage with all private hospitals in a 28 day consultation and encourage them to review the list to confirm their category is correct.

This years’ consultation closed at 5pm AEST on 29 June 2023. The Department thanks all the hospitals that have responded.

The Private Hospital Second-tier Category List – as of 1 August 2023 has been published and will remain in force until completion of the next annual review in 2024.

This list only categorises private hospitals. It does not mean all the hospitals in the list are second-tier eligible. To check which hospitals are eligible, see the Commonwealth declared hospital list on the hospitals page (scroll down to the bottom).