By Keryn Curtis
Two months after it was first announced as part of the Living Longer. Living Better reform package, the government has made its decision about how the proposed ‘clawback’ savings to the Aged Care Funding Instrument (ACFI) will be achieved.
In advice issued by the Department of Health and Ageing (DoHA) to residential aged care providers overnight, the government has announced the introduction of three key changes to the ACFI – the tool used to calculate funding for aged care facility residents – taking effect on 1 July 2012 with the aim of returning the future rate of growth in care subsidies per resident, in real terms, to historical trend levels.
There are three main elements to the ACFI changes. Two are targeted at particular questions in the instrument where the government says there were unprecedented increases in claiming levels – question three and question 11 – while the third savings component will come from a one-off reduction to the subsidy across all care levels.
Specifically, the three elements are:
1. A change to the scores in question three of the Activities of Daily Living (ADL) domain, effective for all new appraisals and reappraisals from 1 July 2012 onwards;
2. A change to the Complex Health Care (CHC) matrix, also effective for all new appraisals and reappraisals from 1 July 2012 onwards; and
3. A one-off reduction in the amount paid under the ACFI at all care levels from 1 July 2012. After indexation is applied from 1 July 2012, this means that ACFI subsidy rates will remain at their current, 30 June 2012 level.
According to the DoHA communication, question three within the ADL domain, which relates to personal hygiene, is currently the most highly weighted question within that domain and “has contributed more than any other question to growth above historic levels.”
DoHA reports that the complex health care (CHC) domain has been the highest growing domain in percentage terms. “Changes will be made to the matrix so that residents who have high medication needs but no other complex health care needs will now be paid at the low level for this domain.”
Other changes, not yet announced in detail, will include tightening of the evidence requirements for certain ACFI questions, effective from 1 January 2013. These will apply to areas where there has been high growth in claiming but currently low requirements for evidence requirements.
The Minister says the changes are necessary to address the unforseen blow-out in the cost of the new instrument, compared to the government’s budget estimates, since its introduction in 2008, but says it does not represent a reduction in overall funding per resident.
But providers of residential aged care services disagree, saying the changes will have direct implications for staffing and care.
ACSA CEO, Adjunct Professor John Kelly, said, while ACSA remains committed to working with the government to achieving the outcomes articulated in the Living Longer Living Better package, members were very concerned about the impacts of these changes to their services.
“ACSA remains concerned that the current decision is likely to affect our members in a manner that will have implications for our ability to appropriately staff and therefore provide appropriate care for the more vulnerable residents in our aged care facilities.”
“We are disappointed that the Minister has not supported an independent cost of care study to establish, once and for all, a baseline for the actual cost of care.”
Incoming CEO of the new provider association, Leading Age Services Australia, Gerard Mansour, went further, calling on the Gillard Government to reverse the decision immediately, and allocate a further $500 million in aged care funding so that aged care providers can avoid the need for implementing the ‘severe changes’.
Mr Mansour said financial modelling of the changes undertaken by residential aged care providers shows that the industry would lose more than $500 million over the next financial year – a cut of between five and 10 per cent for every provider. He warned that this would create a two-tier system and leave many residents worse off.
“What this means is that, after 1 July, a new resident will be entitled to less care for exactly the same care needs, a concept the industry rejects but will be forced to implement,” he said.
“Two residents in the same facility, with the same care needs, may be entitled to significantly different support as a result of this new funding model.
“Cuts of this magnitude are not acceptable to the industry and are certainly not in the interest of frail older Australians,” Mr Mansour said.
AAA will be reporting further this afternoon on the details behind the decision and providing input and analysis from interviews with key industry figures and the Minister for Mental Health and Ageing, Mark Butler.