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Exit fees for home care clients top $4,000, data shows

New information published on My Aged Care has revealed huge market variation in the maximum exit fees clients can expect to pay when they leave their home care service.

From 27 February, home care providers have been required by legislation to publish their maximum exit charges on the government’s My Aged Care website, making this information publicly available for the first time.

An analysis by Community Care Review shows that maximum exit fees range from $0 to $4,153, which is equivalent to almost 9 per cent of the annual subsidy for a Level 4 home care package and nearly 10 times the industry average.

The maximum exit fee of $4,153 is from the Royal Freemasons Home Care in Victoria.

The Department of Health told a senate estimates hearing this month the average maximum exit fee was $417.

Other providers with maximum exit fees well above the industry average are St Simeon Community Services in Sydney, which has a published maximum exit amount of $2,015, and IRT and Mercy Community Services, which have each set maximum fees of $1,000.

The Royal Freemasons told CCR its maximum exit fee applied to a Level 4 package and was reflective of the administration costs involved in reconciling and transferring a client’s unspent funds. The provider said its minimum exit fee was $340 and average fee was $1,840.

A spokesperson from Royal Freemasons said the process for transferring unspent funds “takes considerable time” including notifying all services involved in the person’s care and preparing handover documentation if the client is moving into residential care.

“We cannot comment on the fees of other providers, other than to say if what has been put forward is accurate, we are surprised they have calculated the discharge process to be such a low cost,” the spokesperson said.

IRT told CCR that its fees and charges reflected the services provided.

CCR sought comment from St Simeon Community Services about its exit fee and is awaiting a response.

Not expecting ‘huge turnover’

Ian Yates, chief executive of COTA Australia, said exit fees should reflect the actual costs of transferring a client’s unspent funds and he noted a significant number of providers were not charging any exit fees.

CCR’s analysis shows home care providers that have decided not to charge an exit fee include RDNS, KinCare, Benetas, Uniting Home Care, Silver Chain, ECH, Catholic Healthcare, Feros, Ballycara, Centacare and ACH Group.

“This means that they don’t expect huge turnover and are absorbing the administration costs in the normal costs of doing business,” said Mr Yates.

He confirmed that COTA Australia had received a small number of complaints from consumers and families about pressure tactics from providers to sign a home care agreement including an exit fee that a consumer did not agree with, without an opportunity for negotiation.

He said those complaints had been referred to the Aged Care Complaints Commissioner and the experience of consumers would be monitored.

An exit fee must be agreed to with a client as part of their home care agreement and cannot be higher than the amount published on My Aged Care. An exit amount can’t exceed a person’s unspent funds.

Related CCR coverage: Concerning start to ‘enhanced’ consumer information on My Aged Care 

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14 Responses to Exit fees for home care clients top $4,000, data shows

  1. Dave March 16, 2017 at 4:08 pm #

    Excellent Report!

    Named and Shamed!

  2. Ted Wards March 17, 2017 at 9:47 am #

    What people need to understand that if there is no exit fee in their client agreement or contract, the organisation cannot charge an exit fee. Me thinks this is to ensure that the maximum amount of money can stay with the organisation, leaving clients with very little. The aged care industry is now primarily a for profit business and its all about competition. If someone doesn’t understand that, then they need to. I’ve worked in the home care industry for 30 years and I have seen it turn right around. Big business just doesn’t care.

  3. Dave March 17, 2017 at 11:52 am #

    Well Ted, I do understand why that can seem to be the case. Sure. But can I make a couple of observations?

    The examples of high Exit Fees listed in the article are all from so called “Not For Profit” providers: Freemasons, St Simeons, IRT, Mercy….

    So this does not seem to be driven by “For Profit” providers.

    And you are dead right when you say: “this is to ensure that the maximum amount of money can stay with the organisation, leaving clients with very little.”

    The Not For profit providers are doing this because in the past – before 27 February – they did not have to charge an “Exit Fee.” if a Client left them, the provider was able to keep every cent of the “unspent funds.” The whole lot!

    A $4,000 “Exit Fee” is usury. But – horrible though it is – even $4,000 is better than “we’ll take the lot, thanks!” – which is what used to happen. “Unspent Funds” of over $10,000 have been relatively common. Prior to 27 Feb, that’s what the Provider got to keep!

    Encouraging Clients to reserve some “unspent funds” is certainly sensible – but the old system definitely had a perverse incentive for providers to encourage accumulation of very large “unspent funds.” In effect, the Provider got to “inherit” the money!

    So yes – the “Exit Fee” is an attempt to claw back money they have grown to regard as “theirs.” But I don’t see that as a product of competition. It’s actually a hangover of an even worse system where Providers felt they owned the whole thing.

    Hopefully – and I’m an optimist – competition will see these ridiculous “Exit Fees” disappear over time. It’s good to see many providers refusing the temptation. Over time, Clients will choose providers with a zero exit fee, and the organisations who are charging one will be forced to follow suit.

    The key issue then will be quality of service provision and genuine Client Directed Care (I refuse to use the term “Consumer.”)

    Oh – and value too. Taking 33% of the Package, or often more, for Admin and Case Management fees – that is also part of the old system. The result – less actual Home Care for the Client, and often with pretty ordinary Case Management and Admin anyway.

    Will competition fix that without compromising quality? You know – I think it will. If a Client is not happy with the Case Management or quality of care, they can choose a new provider. And they should!

  4. Anonymous March 17, 2017 at 4:53 pm #

    I would be interested to see the notice period for those charging no exit fee as many are hiding their exit fee by enforcing a notice period

  5. Sue March 17, 2017 at 7:05 pm #

    But please do factor in the number of providers with zero exit fees who are enforcing lengthy notice periods before a client can actually exit the package. I’m sure many of these providers would collect for themselves more than the average $400 over that time.

    Didn’t see that covered in the article and it needs to be factored in when looking at the big picture.

  6. Liana March 20, 2017 at 7:45 am #

    I think that it should be considered the notice period that those with no exit fee are enforcing on their clients.

    Many of those who have advertised ‘no exit fee’ are enforcing a notice period of 4-6 weeks therefore getting their exit fee this way which is not being advertised or mentioned in articles above

  7. Dave March 23, 2017 at 11:55 am #

    I won’t mention the Private Provider I am connected to, because this is not a forum to advertise. However, I can assure you that we have no exit fee whatsoever and our Home Care Agreement can be terminated at 24 hours notice.

    I have seen quite a few Home Care Agreements from the NFP Sector – 2 weeks notice and above is common. I am aware of a major NFP which is now Charging an Exit Fee of more than $900 AND requesting Clients to sign a Home Care Agreement with an 8 week notice period. So they are happy getting it both ways.

    There is simply no justification for the Exit Fees that are being charged, and the Public will realise this quite soon. Alzheimers Australia was entirely correct in calling for the Department to enforce a limit on Exit Fees.

  8. Sharon Scarlett April 2, 2017 at 7:33 am #

    So in effect if a provider is charging $4000 for an exit that is $4000 they (provider) would ensure is unspent. The purpose of HCP is to keep consumers at home, $4000 can go a long way as far as providing additional supports and services.
    Tsk, tsk to the providers charging ridiculous amounts, not a good look for your organisational values!

  9. Rob April 15, 2017 at 11:23 am #

    I’ve left my provider of HCP, not because of any exit fee or any other charge.

    I left because the service provided was so appalling that my son arrive at my home, the afternoon of the day my home was “supposedly” cleaned and asked why my home was so dirty.

    The floor had not been vacuumed, despite them being here for over an hour an a half. The bathroom mirror had dirty streaks. I knew that the workers hadn’t done a good job, but I am a bit sight impaired, which they knew, so just did a rough enough job.

    Home care is not for me any more. I’ve tried two different agencies now, and each is just as bad as the other.

    It may take me longer, but I do know that my house is clean.

  10. Thanks Linda for a great article which has prompted good community discussion that one hopes the Government and its advisers’ monitor.

    I can speak with authority on the topic of Government Funded Home Care Package Fees because I have audited HUNDREDS of Home Care Packages Monthly Statements and Budgets from all around Australia for older people, for free, over the last two years and still audit new Home Carte Packages every week.

    Ted Wards is right on one point alone and wrong on every other point.

    Right that aged care is big business and wrong to think that this is a new change brought about by CDC or the entry of nasty For-Profit Companies.

    Dave is 100% right. In the “bad old days” Not For Profits were keeping higher percentages of the Government Funding than they now keep and until 27 Feb 2017 they kept 100% of the unspent money and worse still they had a VESTED FINANCIAL INTEREST TO DENY SERVICES TO older people, that their packages could afford to pay for, in order to maximise the client’s unspent fees.

    I have seen hundreds of packages with high unspent funds. I have seen Not For Profits content to deny additional care to their clients so they could keep running high unspent balances.

    ****The worst was a client whose Not For Profit Provider had $23,500!!!!!!!!!!!!!!! of UNSPENT FUNDS and happily told the client they couldn’t have more services and therefore had to buy additional care privately. **** Disgusting.

    I have seen unspent funds of $8K to $10K a pop commonly kept by Not For Profits when a client died or moved to a Nursing Home.

    CDC reforms and increased competition will sort this market out AS ELDERS BECOME EDUCATED and INFORMED.

    Financial transparency brought by CDC has enabled Elders and their advocates to SEE what has actually been happening all these years i.e. the high fees charged as the Dinosaurs carry on with their “business as usual ways”.

    I have read MANY, many Home Care Agreements I do not agree Providers are getting their exit fees by having longer exit notices. Some of the highest exit fees I have seen – had the LONGEST notice requirements – ie they benefit both ways.

    Clients will move to where they receive the best service for the best value. None of us will be the best value for every client and we can continue to work together to the benefit of all clients. The Not For Profit versus For Profit is offensive nonsense (and I am a Director of Not For Profit Registered Charity), what matters is the client…not us…it’s the client…the client, the client. The sooner we understand this – the sooner the competition will heat up with better solutions for the client.

  11. Adrienne Catherall May 19, 2017 at 7:17 pm #

    Well written Kate, and I am glad I have come across you again as I lost sight of you and forgot the name of your organisation. Sadly I am on the Sunshine Coast so cannot access your services. I am currently trying to change my 92 yr old mother, who has dementia but is no risk for wandering or behaviours, from a NFP organisation to a newer and more flexible company. Need to do heaps of checks and balances before I leave though as it is a big step to take her from where she has been looked after.

    What are my reasons for changing? Well simply because I feel that with the government paying something like $4200 a month for her care, then they should be getting more value for money than 12 hours face to face care a week. My family and I fill in 4 days a week with evening meals and lunches when necessary. I value the time with my mother and it is no hardship to spend time with her, but when a new company comes along and offers 8 hours more care a week, then it is something to be looked at carefully. Also included in this is a more flexible approach to communication, which currently requires going through a centralised office and about 3 people in order to get a message to and from me.

    I feel the care organisation employs some really wonderful carers, and I would love to keep them, but the top heavy business model is, in my opinion, ripping the government off. I do not believe they deserve $1200 a month for admin and coordination, especially given that I manage everything outside of direct caring in her home.

    Once a year I get a visit to sign a new contract, and I tell them no I don’t require nurses, allied health, etc as I take care of all that. I had to battle with them last year to access the $4500 surplus that they held. This, when my mother had been widowed and could have used that amount for social support. I was told directly that the amount could not be used for any ongoing permanent care. Now I understand why of course, given that if the person went into care or died then they resumed that amount into their own coffers. I have no complaint about the care, but the dollars spent should result in more than 12 face to face hours a week for such a large amount of government funding.

    Glad I found this site, and would welcome any response as I find it hard to get information anywhere, especially anything useful from the My Aged Care website

    Thanks
    Adrienne Catherall

  12. Fed Up May 20, 2017 at 10:12 am #

    If anyone has been heavily pressured by “no exit fee” home care services to move to a nursing home before 27 February please let me know.

    We’ve heard several cases of home care organisations collecting thousands in unused funds and pressuring their clients into nursing homes earlier this year. Some would argue this was a bid to claim the entire unused funds from Level IV packages before those same organisations introduced a “no exit fee” policy.

    We need to keep up the pressure on providers and the Aged Care Commissioner should pick up their game and hire more qualified people to investigate complaints.

    You need to study for years in Australia to clean toilet pipes but when you’re a package co-ordinator for our most vulnerable at a major NFP you can get away with basic literacy skills. I’m sure a lot of registered nurses and more educated people would take the job for the right salary. Perhaps it’s a low paid position?

    Same goes for the complaints commission. Perhaps you expect registered nurses, scientists, lawyers or accountants auditing in their specialties? Not in this country. We promote lifelong underachieving paper pushers between different government agencies.

    Sorry if I offended anyone but if your loved ones died due to governmental incompetence you’d be equally outraged.

  13. Kate Galtos May 20, 2017 at 12:06 pm #

    Hi Adrienne,

    Your situation sounds very familiar. Our father has funding (mis)managed by a NFP and we have questioned the high fees – considering that (like you it seems) we don’t need to access allied health and nursing etc. We just want him to use the funds effectively to maintain his good quality of life. The more face to face contact and support, the better he feels.

    When we questioned the high fees, we were told that being a large organisation, they had high admin costs and need to spend a lot on meeting government department quality standards etc …. hmm. Yet they still made a profit of over $4.6 million last year…

    I agree with you. It appears that some organisations ARE ripping off taxpayers. It is not right. Our elders should not be used as money making opportunities. Sadly, there are some in aged care that seem to base their business model on just this.

    With our father, we too are looking at better use of the funding package, with more appropriate fees. We would like to work with an organisation that is smaller, so that we can call anytime and talk to someone who can answer our request immediately and who takes an interest in knowing our names! Our current provider also has a central call centre and no one seems to ever be able to call us back or give us information. Sometimes being bigger is not better.

    If you read the latest Home Care Package guidelines from the department of social services, you can be well informed as to what rights your mother has over the spending of the funds. I have a friend who simply gets the provider to receive the funding for her grandmother, and she assists them in creating a care plan and budget, then she asks them to pay the bills and send her a statement. She has almost total control. Of course they charge fees, but certainly not 30%.

    The important thing is to find providers who understand that they are the custodians of the funding. They do not own the funding. They are obliged to seek appropriate and effective use of the funds. They are obliged to have checks and balances in place to protect the client on all levels – not just care.

    Thank you for sharing your post Adrienne. It is important that our elders’ voices are heard.

    Kate

  14. E. Turner May 24, 2017 at 5:11 pm #

    I would just like to bring to your attention that the ACH Group will be introducing an exit fee of $750.00 from the 1st June 2017. What concerns me is that with the inception of the NDIS and the cost of this scheme to the tax paying public, are we laying open the Government purse to increasing administration costs charged by these ‘non-profit’ organisations with no increase in care to some of the most vulnerable people in our community?

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