The Federal Government says Victoria's health system is missing out on an extra $12.4 million in funding because it has not done its paperwork.
The federal Health Minster, Tanya Plibersek, has accused the State Government of failing to provide sufficient data that would guarantee the funding.
Ms Plibersek says Victoria is the only state that refused to comply with the paperwork.
"I need to know that if I put money into the Victorian health system that it gets to patients," she said.
"With all of the Commonwealth funding that is flowing, elective surgery numbers and emergency department waiting times should be much better than they are."
The state Health Minister, David Davis, says has disputed the Commonwealth's method of data collection.
"What we don't do is put a wrist band on every patient and say you're a patient funded by the Commonwealth and your a patient funded by the state," she said.
The State Government maintains Victoria's system is case-based, with all funding placed in hospital pools and paid by procedure
Mr Davis says the Federal Government is being vindictive.
"This is an attempt to punish Victorian patients because Victoria has exposed the Federal Government cuts to health funding," he said.
"Victoria has stood up and said no we don't want the budget cut by $475 million by the Federal Government.".
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