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 $985 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 private hospital categorisation
We are legislated to publish a list of private hospitals current as of 1 August under Schedule 5 of the Private Health Insurance (Benefit Requirements) Rules 2011. To make sure each hospital is in its correct category, we review these details and consult with the sector. This year's consultation of the Private Hospital Second-tier Category List – determinations made by 1 June 2025 is open from 30 May 2025 until 5PM AEST 27 June 2025.
We encourage all declared private hospitals, regardless of eligibility, to review the list and confirm the hospital is correctly categorised for second-tier purposes. Hospitals can make a request for this category to be internally reviewed during this during this 28-day consultation under Schedule 5 – 1B of the Private Health Insurance (Benefit Requirements) Rules 2011. Please email confirmations of hospital categorisation or a request a review with supporting information including a current hospital licence to PHI.Hospitals@health.gov.au.
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 hospitals list.
Cost recovery
We recover the costs of assessing these applications. Find out more in our Cost Recovery Implementation Statement.
Legislation
- Sections 121-8A to 121-8D in the Private Health Insurance Act 2007
- Schedule 5 of the Private Health Insurance (Benefit Requirements) Rules 2011
- Part 2A of the Private Health Insurance (Health Insurance Business) Rules 2018.
Updating facility details in the Australian Business Register (ABR)
If your ABN, business or company name or other details are not correct and linked when viewed in ABN Lookup and the ASIC Connect Register Business Names Index we will ask you to update them.
Update your business details at business.gov.au
Update your ABN details with the ABR
If you registered your business name before 28 May 2012, you may not have an ABN linked to your business name. Adding an ABN to your business name allows verification of your business details.
Learn how to link an ABN to your existing business, company or trust name
If your business does not operate under your own entity name including any legal parts of a company name (eg, ‘Pty Ltd’), then you must register a business name with the Australian Securities and Investments Commission (ASIC).
This means that if Australian company ‘Happy Hospital Pty Limited’ conducts business as ‘Happy Hospital’ they must register the business name ‘Happy Hospital’.
Find out how to register your business name with ASIC
Read the ASIC business and company name frequently asked questions (FAQs)
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