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ACFA highlights concerns over choice of payment breaches

The reforms to residential aged care payments have largely met its objectives, but there is evidence some providers are not allowing true choice of payment.

That’s according to advice supplied by the Aged Care Financing Authority to the Aged Care Legislated Review, which last week delivered the final report now being considered by Minister for Aged Care Ken Wyatt.

The accommodation payment reforms under the Living Longer Living Better package included removing restrictions around types and amounts of payments for high care residents, providing consumers a choice to pay a lump sum or equivalent daily payment and transparency and competition measures such as requiring accommodation prices to be published on My Aged Care.

ACFA reported the objectives of the reforms – including to introduce transparency, increase choice, support a more competitive approach and improve sector sustainability – appear to have largely been achieved.

However, it said some issues, including “choice of payment” warranted further consideration.

While the choice of payment lies with the resident, ACFA highlighted that providers “overwhelmingly” preferred to receive a lump sum.

“There is anecdotal evidence that some providers are not allowing true choice of payment,” ACFA wrote in the report.

It identified that providers were doing that by any of the following:

  • requiring the resident to commit to paying by lump sum in order to gain entry to the facility
  • only admitting those people who the provider feels will pay by lump sum
  • providing misleading information to the resident about their options.

ACFA said the information was anecdotal and difficult to take action on because residents pressured into paying a lump sum to gain entry may be less aware of their rights or believe it could jeopardise their place at the facility.

It suggested a campaign to increase awareness on residents’ rights around payments and take action where actual evidence was available.

Meanwhile, some providers prefer to receive a daily payment and argue they should be able to set lump sum and daily amounts independently of each other, ACFA said.

“Anecdotally, ACFA is aware that some providers are negotiating a lower daily amount in order to encourage daily payments, which is not consistent with the legislation,” it wrote.

The daily payment price is made equivalent by using the maximum permissible interest rate (MPIR), which is relatively high from a resident’s perspective and can mean a provider is less likely to receive payment that way, ACFA said.

While discounting the daily payment encouraged that payment choice and may benefit consumers, it would unwind the precise equivalency achieved by MPIR conversion, it wrote.

ACFA concluded that under the current policy settings and market conditions, the equivalence between lump sums and daily payments should remain.

Minister now ‘considering’ report

The report was handed to Minister Wyatt on 31 July and must be tabled by 14 September, two days after the Minister is scheduled to speak at the Aged and Community Services Australia National Summit in Cairns.

Minister Wyatt told Australian Ageing Agenda he was “now considering this comprehensive report and will table it in due course.”

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