Proposed law introduces pricing caps for home care

The amount of money that home care providers are allowed to charge for administration would be capped under a private members bill introduced into federal parliament.

Aged Care providers say proposed laws that would cap the amount of money home care providers can charge for administration could result in higher fees and a loss of services.

 The Aged Care Amendment (Making Aged Care Fees Fairer) Bill 2021 prevents providers from charging more than 25 per cent in administration for level 1 and 2 home care packages, and more than than 20 per cent for level 3 and 4.

It was introduced as a private members bill on Monday by Rebekha Sharkie, who represents the Centre Alliance Party.

Ban on exit fees

If approved by parliament, the bill will also ban exit fees when changing providers and will require providers to offer prospective clients a comparative fee schedule for at least five approved providers in the area, or if less than five, all providers in the area.

Rebekha Sharkie

Ms Sharkie says the legislation is designed to prevent “rorting” in the home care system.

The government needs to stop the rorting and introduce pricing caps

Rebekha Sharkie

She says she drafted the legislation after surveying home care recipients in her electorate of Mayo, south-east of Adelaide.

Of the 1,200 respondents who responded, half said they were unhappy with or unsure about the administration fees in their package.

Many reported spending about half of their package on admin and management fees, and 94 per cent said they were unable to afford daily care, Ms Sharkie said.

Lack of guidelines

“Some of these people were only able to afford one hour of cleaning or gardening a fortnight, and their care plans have hardly changed from one year to another, but they were still being charged up to 50 per cent in administration fees.

“I cannot fathom how such low value, static packages can continue to incur such ridiculously high administration and management fees. It’s outrageous and it needs to be stopped.

“My bill will cap fees and it will make more funding available for actual care in the home.”

Ms Sharkie said while providers are currently required to keep management fees “reasonable” there are no guidelines as to what that actually means.

Sometimes costs were hidden in inflated hourly rates, she said.

“The current system is not working,” Ms Sharkie said. “So called competition is not keeping prices down and … the government needs to stop the rorting and introduce pricing caps.

Added complexity will increase costs

LASA CEO Sean Rooney said the Bill appeared to lump care management, an essential home care service, together with administration costs.

Sean Rooney

He said limiting the ability of providers to charge care and package management fees as a proportion of overall service fees wouldn’t change provider costs, and the bill would only force providers to shift costs to people with the highest package utilisation who were likely to have been allocated less funding than they need.

Mr Rooney said LASA supported measures to address unreasonable pricing in home care, but solutions should not come at the cost of quality monitoring and care management.

Mr Rooney said home care administration costs had fallen from about 25 per cent of costs in 2017 to 22 per cent in 2021.

“If anything, the Bill would likely create further administrative costs by adding complexity to the system,” he said.

Broader analysis of home care pricing by LASA also showed that the prices charged by providers are reasonable compared with other markets such as disability and CHSP, he said.

‘Blunt fee cap’ unhelpful

ACSA CEO Paul Sadler said ACSA had written to Ms Sharkie outlining its concerns about the proposed legislation.

Paul Saddler

“While we fully support the intent of the bill, which is to make aged care more affordable and easy to understand, unfortunately it doesn’t account for the highly varied nature of home care services and the flexibility that older Australians want in how they are delivered,” he told Community Care Review.

He said in order to make home care more affordable and pay workers better, what was needed was an increase in the funding base, not a blunt fee cap.

“It’s possible this legislation could unintentionally lead to an increase in fees in some cases and a decrease in available services in others,” Mr Sadler said.

This story first ran on Community Care Review.

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Tags: acsa, home care fees, lasa, paul sadler, pricing cap, rebekha sharkie, Sean Rooney,

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