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.

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7 Comments

  1. Personally, I think residents and staff were better off when RCS was around, at least at my facility; we all knew every nitty gritty detail of each resident because we were constantly documenting their care needs, and adding changes. I find now with ACFI its rushrushrush with the paper work and review in 3 months time or just do an entire new ACFI simply because the manager of the facility wants to see if she can get more funds.
    And now with this latest change, makes it even more confusing. Is it saying that standing with a resident for half an hour while you are administering their different medications isn’t a CHC?

    I’m confused and quickly loosing faith in the aged care system

  2. Shame, shame, just when we thought we had a minister that understood, we now find he is unable to deliver.

    The Productivity Commission’s Report: “Caring for Older Australians”, has been watered down, and older Australians and those trying to care for the frail aged have been short-changed with a very shallow aged care reform package called “Living Longer, Living Better”.

    While this offers $3.7Billion to the industry (and to the federal bureaucracy) of which only $500 Million is ‘new money’, the Gillard Gov’t is now clawing back the $500 Million meaning even in 2014, the base has been eroded and there isn’t any real new money, yet we have a rapidly ageing population with growing demands for residential care at life’s end

    “That’s a bit like being offered a pair of new shoes, you see the box and expectations are raised, however when you open the box, there is nothing much inside except a photo of what the shoes may look like with a note written on it saying they cannot be delivered until 2014 subject to a whole lot of conditions” What a scam?

    Because the current ACFI funding is growing higher than expected, and it was alleged that some providers were claiming more agressively to the point of ‘rorting’ the system, the budget has blown out. So they need to claw back $500 Million over 3 years, commencing with a 3% cut to funding from 1st July 2012. So not only do we have to find additional funds to cover various cost increases, there has been nothing offered to offset the cost of the carbon tax, they have effectively taken away the indexation factor for the coming year and more.

    Furthermore, by clawing back the $500 Million, there is really No New Money in the so called aged care reform package.

    Most would be aware that WA aged care providers generally stopped building several years ago and 2000 bed licenses have been returned during that time. That means there has been little expansion of new beds and barely any renewal of ageing facilities and right now, WA is 3000 beds short of where we should be in accordance with Dept of Health & Ageing planning ratios for our population > 70 years.

    Given the seriousness of the financial viability situation, some providers (large ones included) will not survive, with some considering getting out of residential care altogether. Consider the consequences of WA losing another 1000 beds over the next 18 months and the impact this will have on our state hospitals and/or home carers?

    Clearly, without some real reform and some real money, Minister Butler’s reform package is as useful as an ashtray on a Harley Davison MC

  3. I think we knew the governments promises where too good to be true! Not surprised ….just highly dissappointed

  4. This can only be described as a disappointing result; it would appear that our government is reliant on the industry to continue to provide care that is appropriate with little support from them. As an industry we have been crying out for an analysis on the cost of care, this is yet to be forthcoming. We have also requested some financial modelling from the government on the impact of these changes to the industry, they have not been forthcoming in providing that either.
    This modelling has not been provided in my opinion because the government does not want to know the results. They are holding onto the ignorance card as an excuse down the track.
    For too long the government has relied on the altruistic nature of the industry to care for those that have contributed to our rich heritage. To think that these changes would improve care provisions of our resident under care is very short sighted.
    The government is tasked with running the countries finances to ensure meet our obligations of our citizens. It is not an acceptable excuse to just say there isn’t enough money. All the government has done is pass the buck to the industry. This is probably as a result of their inability to come up with any answers. Using out-dated modelling as a case to return to trend is beyond belief. Is the government not aware that there has been an increase level of resident acuity in the past 10 years as a result of government policy and medical advancement?
    It looks like the industry is on its own, the good thing is we will still have the oversight of the government ensuring we have appropriate levels of staffing, that is funded by a model that doesn’t know what the cost of care is. Ignorance is bliss I guess.

  5. These cuts in funding will contribute to lower standards of care for our elderly residents and dissatisfaction by care staff and relatives in the quality of care delivered. Supposed industry benchmarking has highlighted an aged care facility on the central coast to be 500 hrs a fortnight over the benchmark in direct care hours.
    Imagine 35 hrs a day of less staff to care for the frail and vulnerable. As an aged care nurse with 40 yrs experience my personal values can no longer accept the lowering of standards in aged care facilities. Shame on you Julia Gillard- tow a boat of refugees each day but dont look after your own.

  6. As an ex- Clinical Nurse Manager of a residential facility I can say this is disgusting. I am seriously considering and have all but left the industry because of the unrealistic expectations to provide care with the amount of money provided. I have foregone my nurse practitioner studies for which I received a scholarship due to my distate for where the aged care industry has gone. Nursing care is reduced to a dollar and stress levels are high everywhere from carer to management. Wake up, its not working.

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