THE Commonwealth's decision to bypass the Victorian government and make direct payments to hospital administrators may not be a one-off.
Canberra will reinstate $107 million in funding for Victorian hospitals this financial year and pay it straight to local hospital networks.
It was part of a $475 million cut over four years to the state's federal health funding based on new population statistics.
But the Victorian government says the change of heart is a short term political fix and a "first step" in restoring the full amount.
Federal Health Minister Tanya Plibersek said commonwealth funding to Victorian hospitals would increase by $900 million over the next four years.
"We don't expect to have to pay it in this same way to hospital administrators but of course we are open to doing that if we have to," she said at Casey Hospital on Melbourne's eastern fringe.
"It is to my mind an extraordinary circumstance here in Victoria but if state governments are going to play politics with the health and safety of patients then there will be times when I need to step in."
Other states absorbed the federal funding cuts but it was left to Victorian hospital administrators to slash their spending.
"These cuts have been cruel, they've been disastrous for patients, they've been stressful for staff and this is the end of it today," Ms Plibersek said.
Ms Plibersek said the funding would come from other money intended for Victoria.
Premier Ted Baillieu described the decision as a "sleight of hand".
"All they've done overnight is to restore $107 million to Victorian hospitals, and then turn around and say Victorians are going to pay for that by taking that out of budget money in Victoria," he told reporters.
"This is a short term political fix, and (Prime Minister) Julia Gillard knows it, and Tanya Plibersek knows it as well."
The cuts will resume in July, he said, calling on the commonwealth to restore the remaining $368 million in cuts over three years that had been taken from the state's hospitals.
"We've honoured our budget commitments, it's the Commonwealth that hasn't honoured theirs," he said.
"They are giving $107 million to Victorians by taking $107 million from Victorians, and clearly that is a sleight of hand and they are seeking to hoodwink Victorians."
The see-sawing funding arrangements made it difficult for hospitals to adjust, he said.
"You can't ask hospitals to operate on the basis of roller coaster funding, it isn't fair," he said.
Ms Plibersek says Commonwealth funding has actually increased, and accused Premier Baillieu of ripping $616 million from the state's health budget.
Mr Baillieu also criticised a letter from Ms Gillard indicating Victoria would be penalised $55 million for not fully adopting the Seamless National Economy National Partnership, a series of COAG reforms on business regulation.
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