Top Menu

Government clamps down on ACFI claims


The long-running dispute between the Federal Government and aged care providers over budget blowouts in the Aged Care Funding Instrument has intensified, with the minister announcing almost half a billion in reduced subsidies and tough new fines for incorrect claiming.

In yesterday’s Mid-Year Economic and Fiscal Outlook (MYEFO) the government revealed it was cutting subsidies on certain claims in the ‘complex health care’ domain of ACFI to save $472 million over the forward estimates.

In a media release this morning Minister for Aged Care Sussan Ley said these claims were “consistently higher than expected and not consistent with claiming practices in other ACFI areas.”

She announced “a stronger compliance regime” including fines of $10,800 per offence for aged care providers “caught making repeated false claims under the ACFI.”

Ms Ley said figures showed as many as one-in-eight of 20,000 ACFI claims audited in 2014-15 were deemed to be incorrect or false. “This figure is already tracking even higher at one-in-seven in 2015-16,” she said.

“Unfortunately we’ve seen a concerning number of incorrect claims and unaccounted-for growth in spending in complex health care creeping into the system in recent years,” Ms Ley said.

The government referred to a “sharp practice” which it described as a claim that “may be legitimate when assessed strictly against funding guidelines, but takes advantage of ambiguities in the rules for maximum financial gain.”

The minister’s press release prompted a wave of mainstream media reports this morning of rorting among aged care providers, with one newspaper reporting facilities “overmedicating patients in order to extract more government subsidies.”

In addition to the fines, Ms Ley said there would be “new measures to ensure closer scrutiny of claims, including stronger auditing and IT system updates, as well as better education for aged care provider claiming requirements.”

This was intended to ensure fines were restricted to those providers who “had been caught making multiple, deliberate false claims, not genuine one-off mistakes,” she said.

Long-running dispute

The measures in the MYEFO come amidst ongoing talks between provider peaks and the Department of Health over ACFI claiming issues.

Two weeks ago the four national peak bodies representing aged care providers had sought assurances from the government that it would not act to reduce ACFI expenditure, after the funding instrument was found to have exceeded its 2014-15 budget by around $150 million.

It was the second time in three years that the ACFI has blown its budget, prompting another departmental review.

In a letter to Ms Ley dated 3 December, the CEOs of Aged and Community Services Australia, Catholic Health Australia, the Aged Care Guild and Leading Age Services Australia said their investigations with the Department of Health had identified a number of possible reasons for the growth in ACFI expenditure, “but none of the scenarios adequately make the case that the growth is not justified.”

They argued that downgrade statistics through the validation processes suggested that providers were “administering the ACFI reasonably.”

“We consider there is sufficient evidence to suggest the ACFI and ACFI processes are inherently flawed and/or the forecasting methods used to determine the expenditure envelope do not adequately factor in the environment of growing acuity, complex co-morbidity and longevity,” the peaks said.

Dispute over increasing ‘frailty’

In today’s statement Ms Ley said that claims by some in the sector that an increase in frailty in older Australians was to blame for the unexpected increase in ACFI claims was “not consistent with government data on claims for other ACFI-funded services, which had not increased anywhere near the same amount, despite also being affected by increasing frailty.”

A sharp increase in one year was also not consistent with genuine frailty growth, Ms Ley said.

Retraction from minister sought

Aged and Community Services Australia (ACSA) said that data had never been provided to the sector by the government to support the alleged misuse where it was occurring.

The peak said it was “appalled to see media reports of aged care providers allegedly ‘rorting’ or even being labelled ‘fraudulent’ in aged care subsidy claiming in the media today.”

ACSA said it would be contacting Ms Ley’s office to express its “very extreme concern” over the matter and asking that her office “provide a retraction to the media so the record can be corrected.”

The peak said it welcomed the government’s “more intense” regime as it knew the vast majority of aged care providers complied faithfully with the funding instrument.

‘Double-whammy effect’

Leading Age Services Australia said the announcement that further funding would be “ripped from aged care when growth in costs are three times what government recognises is extremely disappointing.”

CEO Patrick Reid said the peak body had warned government that ACFI growth was occurring faster than its projections because of significant increases in cost of care and an increase in people with higher care needs.

“Together these are creating a double-whammy effect which have not been adequately factored into the department’s forecast modelling.”

“Simply trying to curb expenditure by tinkering with the existing instrument does not address the real issue, it just transfers the increasing financial burden of higher care costs on to age service providers and pensioners,” said Mr Reid.

Want to have your say on this story? Comment below. Send us your news and tip-offs to editorial@australianageingagenda.com.au 

Subscribe to Australian Ageing Agenda magazine (includes Technology Review

Sign up to AAA newsletters



, , , ,

, , , ,

22 Responses to Government clamps down on ACFI claims

  1. Rod Young December 16, 2015 at 1:59 pm #

    The Government already has considerable compliance powers so difficult to understand why they also require a punitive penalty when they can already remove a provider from undertaking assessments and oblige the provider to secure an independent assessor and undertake agreed assessor training.
    Has the ACFI served its purpose, namely to raise the subsidy level to more realistically reflect the cost of care. Is it time to instal a much simpler funding tool and save on the administrative burden attached to managing ACFI claiming processes?

  2. Glenn Bunney December 16, 2015 at 2:35 pm #

    The Government has been talking about ACFI expenditure exceeding budget projection over recent months, and is yet to identify the basis of those projections. If the Minister is serious about her 1:8 or 1:7 claim, perhaps she might wish to shed some transparency on the basis of the budget projections used by the Department to establish the budget.

    Certainly the trend of ACFI validation downgrades from what has been made public, does not reflect such a significant variation. In any event, if the Department felt that provider actions were the problem they have more than adequate powers to address that with the providers concerned rather than wish to take a punitive approach to the whole industry. Or does the failure to do so actually demonstrate shortcomings in the assumptions underlying budget projections, and it’s just easier to vilify an industry than admit to the problem?

    References in the past have been made to the maintenance of the historical trends but surely in a bureaucracy as sophisticated as Australia’s, we don’t simply assume a continuation of past trends way into the future? Only last week Prime Minister Turnbull lauded us all to be innovative and inventive so logically he would be doing that in the full knowledge that Departments reporting to his Ministers would be reflecting the same dynamic understanding of the true impacts on expenditure.

    In the end the Government will do what it wants to do and paint it in whatever way it wishes. Just for once it would be good to see a Government honest enough to say that they just got the numbers wrong and we can all work together to correct it for the future. This inherent Government culture of blame and shame shows a lack of credibility, honesty and legitimacy.

  3. stephen December 16, 2015 at 3:22 pm #

    Never been a more exciting time to be an aged care operator.

  4. Paul December 16, 2015 at 6:06 pm #

    In the Financial Services industry, if the Regulator (ASIC) finds that a Licensee operates incorrectly, it revokes the licence and prevents the person/company from operating in the industry for a set period, or forever.

    Come on Minister, let’s name, shame and revoke licences and let the rest of the industry get on with looking after our residents.

  5. David Fenwick December 16, 2015 at 6:12 pm #

    Has anyone informed the Minister that Australia has a rapidly ageing population with the frail aged coming into residential care at end-of-life therein having more complex health needs and requirements for pain management which of course all comes at a cost.

    Once again smoke and mirrors are to hide the dishonesty and incompetence of the Department of Health & Ageing to say that providers are abusing the ACFI system and so therefore there has been a budget blow out that cannot be sustained.

    This ruse was used when Mark Butler was Minister so its not new, but it happened long enough ago for the Department’s auditors to thoroughly investigate those providers submitting unusually high ACFI claims, and if found to be fraudulent they have the power to penalise them. So when and where has this happened? Once again the bureaucrats have been sitting on their hands.

    Ok, the Federal Government may have a few financial headaches. At least 33% of residential aged care providers evidently failed to make a surplus last financial year and many of these made a loss. If providers are faced with another ‘recalibration’ of ACFI, some of these will close. Many others will become marginal. This means that growth will stop at a time Australia needs more beds to be built.

  6. Dave December 16, 2015 at 11:52 pm #

    Those of us on the ground know that new residents require higher care than ever before…its unfortunate that we’re being shot in the foot by our representatives.

    There’s really only two paths that will lead to positive change. Hope and voting.
    Hope that all our elected officials will soon experience the joy of placing a parent in care and realise that we need to do much better…and voting in a manner that sends a clear message to our government that we value people more than military hardware.

  7. Kylie Wise December 17, 2015 at 12:11 am #

    Dear minister

    We understand that you lack insight because you’re only new to the job.

    But your analysts should know better.

    The reason CHC claims were “consistently higher than expected and not consistent with claiming practices in other ACFI areas.” is because you already clawed back the ADL funding a few years ago.

    Your models dont work and never have. Please stop tinkering with the numbers to make them fit the budget instead of the need

  8. Frustrated Nurse December 17, 2015 at 9:52 am #

    Not surprising that ACFI is being targeted again… I recently worked for a large organisation that had an 88% downgrade following validation. Disgusting especially bearing in mind that the care that was claimed was not being delivered. It is also very clear that the standalone, independent NFP organisations have a limited life in aged care provision. This is sad because these providers direct their care in a more personal manner. Aged care these days is all about money and the focus needs to shift back to provision of good care by staff who are passionate
    The gov’t push to keep people at home longer via consumer directed care packages is impacting on occupancy levels in residential facilities. Very few can now say they have 100% occupancy and the reality is that many people are making the choice to stay at home but are miserable, lonely because the CDCs only provide a limited amount of care. Many people do better in residential care.
    How about the decision makers bypass the highly paid CEOs and start asking those at the grass roots level of care provision what actually needs to be addressed.

  9. David Fenwick December 17, 2015 at 11:38 am #

    Isn’t it time that a comprehensive survey looking at the ‘cost of care delivery’ across all capital cities, several regional centres and several rural & remote communities in each State to establish the different cost drivers and what a care recipient actually needs? This study is long overdue and should be carried out by an independent agency.

    Perhaps the reason this hasn’t happened is the fear that it will be revealed aged care providers are being under funded through many parts of Australia.

  10. Simon Templar December 17, 2015 at 11:51 pm #

    FN, is correct. it’s not surprising at all.

    Recently, all our managers received directives to increase our ACFI revenue by 4% every month. We’re still unsure if that 4% is compounding or just based on the starting figure.

    No helpful suggestions on how we’re supposed pull this off or any consideration of actual resident care needs. Just keep the increases coming and never mind about downgrades because we’ll still end up in front.

    This is how the game is played these days, enough is never enough. Greed ruins it for all of us.

    I like Paul’s suggestion regarding serious penalties. After almost 8 years of ACFI there’s really no excuse for not getting your claims right. You’re either incompetent or fraudulent and deserve what you get. A tough stance on weak claims would send a clear message, end dodgy claiming and alleviate the need to claw back funds from honest operators.

  11. ruth December 18, 2015 at 8:39 am #

    Perhaps Australia could consider a model used in other countries to ensure that government subsidies are kept within reasonable parameters? One such model is that the profit margin is capped between 10 to 15 percent and audited by an independent agency.

  12. mary December 18, 2015 at 11:41 am #

    Once again the government are not consulting with any providers, rather just making claims that there is significant rorting going on.
    There are already measures in place for providers if they are not working within guidelines so again the entire industry should not be targeted because of a few.
    ACFI has very precise guidelines in place regarding claiming and these are based on the assessed care needs of the residents.
    I would like the minister to spend a day with care staff to see the impact that removing slabs of funding would have on direct resident care.
    The whole statement from the minister is very disappointing.

  13. Mindfit December 22, 2015 at 1:03 pm #

    Does not the fact that organisations can afford to (or can’t afford not to) employ “ACFI nurses” to maximise claims, say it all? There is no guarantee that the money goes into care on the floor where it is needed. Until RACFs are rewarded for re-enabling rather than dis-abling residents the temptation to assessing persons with dementia as worse than they are or can be, then ACFI will always be a tempting and easy bucket of cash.

  14. Dave December 23, 2015 at 6:08 pm #

    Truth is always the first casualty.

    LASA’s 18/12/15 media release states “..since the start of 2013 only 9 non-compliance notices have been issued following more than 55,747 ACFI claims assessments.”
    Yet Departmental figures show as many as one-in-eight of 20,000 ACFI claims audited last year (2014-15) were deemed to be incorrect or false. This figure is already tracking even higher at one-in-seven in 2015-16.

    There’s big difference between finding incorrect/false claims and issuing notices of non-compliance.

    Peak bodies would foster more goodwill (and gain better credibility) by presenting rational arguments instead of obfuscating the truth. These numbers aren’t difficult to find; getting caught out just makes us appear greedy and incompetent. Hysteria and half-truths only harm our cause.
    Why not try a diferent tack?

    Recognise there’s a widespread problem with ACFI claiming (You’re living under a rock if you believe everyone’s playing it straight).

    Deal harshly with the blatant offenders.(After all these yearse, if 1 in 8 claims are dodgy there’s obviously not enough pain associated with getting it wrong)

    Present a rational and considered case to the minister highlighting the increasing frailty and greater complex care needs of our ageing population (This, by the way, is the unforseen consequence of decades of government initiatives promoting healthy lifestyles and subsidising better management of chronic illness)

    Our ‘team’ hasn’t been scoring too many goals with their current approach…perhaps it’s time for new coach?

  15. Annonymous February 9, 2016 at 12:41 pm #

    Why not average it out per resident and do away with the ACFI system all together? If each resident admitted to an aged care facility received a certain amount of money no matter what their care needs are, it would average out over the entire facility.

    Oh wait – that would mean a loss of most of the dss jobs then wouldn’t it.

  16. Cheryle February 16, 2016 at 1:38 am #

    Having worked in aged care I know that he ACFI funding to aged care is not scrutinised enough. I left aged care due to the guilt I felt over being ordered to enter data into clients care plans that was false and misleading.
    I was directed by managers to document in a way that reflected the needs of individuals that were much higher then they actually were.
    Mine and co workers notes were constantly edited to make residents appear to be more needy then they were.
    These actions were unethical and dishonest. When I discussed with my manager how I felt I was then constantly bullied by hostel manager and care manager. I chose to resign when I realised I was fighting a losing batte.
    The facilities I worked at have never been audited since they were taken over 18 months ago despite the huge increase on claims.
    They greediness of some companies affects all other more honest companies and in turn affect the people we care for and the staff who are being directed to lie or lose their jobs.

  17. Another frustrated nurse April 21, 2016 at 9:06 am #

    I have worked in aged care for many years, starting with the RCS & then went on to complete ACFI claims as a natural progression. The organisation I work for is small so I have face to face contact with the CEO rather than an impersonal email from management based elsewhere. I have always argued that my claims need to be substantiated & the claims in the three domains to indicate the required overall level of overall care. I made it very clear in the beginning I would not lie or falsify claims & certainly not put my signature to any claim I thought was not correct. We have been audited several times over the years & with the exception of a few small errors have not had our claims down graded.
    Our CEO has mentioned that in a certain domain we are in the lower end of claiming for the state & I have wondered how, as we claim as aggressively as we can. I have also heard of a large facility in my region that places the same claim in one domain for every resident they admit so I do agree that there is rorting going on which should be addressed.
    I would like to add that when I started in Aged Care most people coming into care were mobile, were able to participate in their own cares & resided in the facility for at least 4-5 years. Now due to the assistance & encouragement by the government to stay home most people coming in are so frail they often pass away within months if not days. This continued turn over places a huge strain on those who must complete the ridged requirements for ACFI & is just lending to the new way of thinking that instead of people we are dealing with cattle. The only reason I continue in aged care is to have some input into the day to day workings of the facility in an effort to make these people’s last days as pleasant as possible.

  18. Helen May 6, 2016 at 4:23 pm #

    How can you state that providers are making ” false claims”. Staff in Aged Care work so hard and under immense stress from all levels to care for our frail elderly people. All staff work longer than their rostered shifts just to get through the daily resident care. One again you are cutting funding so that means staff hours will be cut and our residents will not receive the quality care they deserve. Many admissions are from hospital and should not have been discharged as their conditions are medically unstable. This is cost cutting from the hospitals,the state of healthcare in this country is deplorable.
    We are so caught up with doing paperwork to justify ACFI funding, then you can come to our facilities, to exploit and demoralize the staff.
    If the Government stopped wasting money on helicopter rides, expensive oversees travel, huge superannuation funds plus much more, then perhaps there will be some extra money where it is desperately needed. Our elderly resident deserve high quality care and the right to die in comfort and with dignity.

  19. Kylie Wise May 9, 2016 at 6:08 pm #

    No question that the staff are working hard, Helen. This is about the constant push for higher revenue and the blatant rorting it creates.

    Helicopter rides and travel expenses are just distractions. Nobody even blinks when we drop $20 Billion on a few submarines (just what we need…if it was 1940).

    There’s only one way to express your concern. Vote.

  20. Anonymous September 23, 2016 at 12:43 am #

    ACFI fraud is going on in alot of facilities Staff are told to make a resident look like their needs are high even when there not and if the managers deem the paperwork isnt going to get them maximun funding they change it before submitting it and staff are no wiser.Providers are making big money out of ACFI yet they dont return it to the staffing level on the floor. Staff need to remember ACFI is a legal document and if staff are putting incorrect information in they also are commiting to faud.

  21. Carole March 10, 2017 at 2:33 pm #

    As a person on a higher level of ACFI does not get any more or better care or services than a person on a lower level of ACFI then where does the extra money go. There should be a set amount for every resident, which should be the same amount no matter their different diagnostics or ACFI scores. Just a great way for aged care facilities to rake in extra money for no extra costs.

  22. Bev Warn August 2, 2018 at 12:21 pm #

    I’m a resident and thanks to my facilities ACFI FRAUD, my NDIS DREAM of independent living and even getting a new power wheelchair is under serious threat. After reading my care plan and assessments, a long with ACFI guide (41 of doc) it is clear my care plan and assessments are bringing in the highest possible dollar. They have me as unable to communicate, unable to feed myself, unable to verbalize the need to use a toilet so cares need to monitor for signs of agitation, violent towards staff, other residents are scared, I can walk but lack of motivation so need two staff to assist me walk (I am actually a young person in aged care as I am a paraplegic, I cant walk. I cant even give the NDIS this plan as I will be rejected for my goal to live freely. Why? So they can pull in top ACFI. THEY EVEN claim to have assessed me using the Cornell Scale , usually reserved for dementia and AD APPARENTLY UNDER 18 IN MILD TO MODERATE, 18+ IS SEVERE. MY SCORE WAS 18+. I do not have dementia, I have no behaviours or use of a communication device, I can verbalize very well to go to the toilet, I’ve never deliberately squashed a fly ket alone attack staff

    All outright lies. Now these outright lies to fraudulently obtain money, are going to see ne get a big rejection for NDIS FUNDING to live freely and independently. They cannot look at a plan like that and approve independent living funds result, the home gets loads of funds, none of the care recommendations in the plan are tended, and I am stuck here for about another 40 years.

Leave a Reply