Monitoring group finds ACFI increases

By Keryn Curtis

Data from the first month of claims reporting under the Aged Care Funding Instrument (ACFI) since changes to the instrument took effect on 1 July, showed increased funding for residential care providers in line with Government projections, according to a statement issued last night by Minister for Ageing, Mark Butler.   

Minister Butler said early data from the ACFI Monitoring Group, set up  to monitor expenditure growth under the funding instrument and the impact of changes taking effect  on 1 July, showed that average subsidies increased from $133.96 per resident per day in June to $134.83 in July.

“This is in line with the Department’s modelling and shows that funding is increasing to the sector,” said Minister Butler.

Mr Butler said the Australian Government had increased funding for residential care from $8.8 billion in 2011-12 to $9.1 billion in 2012-13.

“To ensure expenditure grows in line with this estimate and to address higher than expected growth over recent years, a number of changes to the Aged Care Funding Instrument (ACFI) were introduced on 1 July 2012,” Mr Butler said.

According to the statement, there were over 10,000 ACFI appraisals undertaken in July, giving a good sample of the 160,000 people in aged care facilities at any one time.

The statement says the figures are inconsistent with claims from some aged care provider groups of ‘cuts’ to aged care funding of over $50 per day, or $18,000-$23,000 per year, for every affected resident.   “Both Leading Aged Services Australia (LASA) and Aged and Community Services Australia (ACSA) have claimed that funding will be cut by hundreds of millions of dollars in 2012 and beyond.” 

“These claims of funding cuts are clearly untrue, as these early figures are showing,” Mr Butler said.

The bigger picture

Both LASA and ACSA have responded to the Minister’s statement, standing by their claims that hundreds of millions of dollars are being lost from aged care.

ACSA CEO, Adj Prof John Kelly, said the Minister’s statement had selectively picked up on one statistic at the expense of several others presented to the ACFI Monitoring Group, if which he is a member.

“Anyone who wants to play with statistics can always make an argument,” said Prof Kelly. “Since the Minister has raised this figure, it is also important to note that other data, presented at the same meeting, showed a $2.21 per resident per day reduction in funding, compared with what would have been provided had the changes not been made.”

Prof Kelly said that, from his perspective, it was disingenuous on the part of the Minister’s office not to give the full picture.

“The Minister can say he is increasing funding for ACFI but he is increasing it at a lower rate.  If he didn’t reduce the rate, providers would have had more money for care.  So it doesn’t change our position – there is less money overall, less money for care,” he said.

CEO of LASA, Gerard Mansour, who is also a representative on the Minister’s ACFI Monitoring Group, said the advice received at the September meeting was clear and it “spelt loss to the industry.” 

He said the group was advised of all the outcomes for the month of July.

“At the end of July, one month after the changes were introduced, the total loss of revenue to the industry already is around $140 million,” said Mr Mansour. 

Looking at the details, he said the impact of the ‘ACFI price reduction’ changes is that average subsidies per resident day were $2.16 less than what they would have been if the changes had not occurred. 

In addition, he said the changes to the specific scoring for Activities of Daily Living (ADL) and Complex Health Care (CHC) had reduced growth by $0.05 per resident day compared to what would have occurred without these changes 

“Therefore, the total effect of the changes is that average subsidies per resident per day were $2.21 less than what they would have been if the changes had not occurred.“ said Mr Mansour

Mr Mansour said Leading Age Services Australia (LASA) stands by the principle that funding via the Aged Care Funding Instrument (ACFI) should properly match the care needs of older Australians.

“The Government introduced two changes on 1 July 2012 which will result in a loss of revenue for aged care providers, the first being a one-off change to annual indexation. This year before applying the annual indexation of 1.6 per cent, all funding was reduced by 1.6 per cent, resulting in a new lower base. This engineered an outcome where providers did not receive a funding adjustment in response to ever increasing costs.” said LASA CEO, Gerard Mansour   real loss 

“The second change relates to scoring changes for Activities of Daily Living (ADL) and Complex Health Care (CHC) where only certain residents will be affected. These changes will apply progressively as more and more new residents are assessed under the new funding rules. The impact of these changes will increase over time as new residents are progressively assessed under the new rules.” said Mr Mansour

Mr Mansour said it was well understood that overall funding needs for aged care residents will increase over time as more Australians use residential care and experience greater frailty.

 “What is not well understood is that aged care providers’ fee structures are fixed by government. With a lowered funding base and increased costs, aged care providers who are passionate about providing quality care to older Australians are being put under significant pressure” said Mr Mansour.

“LASA commissioned the Centre for International Economics (CIE) to undertake independent research into the impact of the ACFI changes from 1 July 2012. The report found the total funding reduction to the industry over the four year forward estimates period is projected to exceed $1.1 billion,” Mr Mansour said.

* The ACFI Monitoring Group, which includes consumer, provider and clinician representatives, has met twice since the changes to the ACFI were introduced.  It will continue to meet on a monthly basis to review expenditure growth and the impact of the measures that were introduced on 1 July 2012.