Providers still waiting on key funding detail

Providers are still unaware whether funding under AN-ACC is enough to meet minimum staffing requirements.

The Budget has delivered providers an important piece in the puzzle in better understanding funding under the new model, but questions remain about whether it’s enough to meet incoming minimum staffing requirements.

The starting price, or base funding, under the Australian National Aged Care Classification (AN-ACC) is $216.80 and the average resident funding is expected to be approximately $225 per day, this week’s Budget revealed.

The AN-ACC, which replaces the Aged Care Funding Instrument from October this year, has 13 classifications. The starting price is meant to pay for a standard day of care with additional funding provided according to a resident’s classification based on their care requirements.

The classification also informs the minutes of care a resident is meant to receive each day from October 2023 under mandatory 200 minutes of care requirements announced in last year’s Budget.

The $225 average subsidy under AN-ACC is a little over $22 or 11 per cent more than ACFI, said Tyler Fisher, senior product manager and data scientist at aged care consultants Mirus Australia.

Tyler Fisher

“The average daily subsidy under ACFI is currently $192.63. However, AN-ACC includes the $10 basic daily fee supplement so ACFI in terms of AN-ACC is $202.63,” Mr Fisher told Australian Ageing Agenda.

The starting price allows the rates of each classification to be defined and offers insight into the shadow assessment outcomes at an industry level because the average daily subsidy requires a distribution of residents across the 13 AN-ACC classifications, he said.

This makes it possible to calculate the care minutes required at each classification, which providers can use to help inform their budgets for next year, Mr Fisher said. However, providers still require additional resident level data to prepare accurate plans.

“Actual resident outcomes are still unknown, which is critical to understanding the financial impact for services individually. Providers have more clarity on revenue but must have more visibility of their own residents to understand what their future clinical resource requirements will be in terms of the mandated care minute requirement,” he said.

AN-ACC’s winners and losers

Mr Fisher points out that the mandated 200 minutes of care does not mean every resident requires 200 minutes of care. “The average for all residents is 200 minutes. This means each service will be impacted differently based on their current resident cohort and current rosters,” Mr Fisher said.

“The big winners are those who will add subsidy revenue but already have adequate rosters to meet the mandate. Most facilities will add revenue but will need to add clinical staff. The industry average is an increase of 11 per cent to revenue and a need to add 20 per cent more care minutes per resident per day.”

This scatter plot diagram from Mirus Australia shows the variable impact of AN-ACC on providers across the sector, says Tyle Fisher

Providers renew calls for shadow assessment data

Pat Garcia

Providers and their representatives including peak body Catholic Health Australia are reiterating calls to release the results of the shadow assessments.

“While we welcome the announcement in the Budget of the average payment per resident per day, we eagerly await the final piece in the funding puzzle – the classification for each resident that determines the final price,” CHA CEO Pat Garcia told AAA.

“[The Budget] doesn’t tell us the classification of residents under AN-ACC for each service in order to gauge the extent to which the increased funding covers the cost of the minimum staffing levels, which will vary across services depending on their resident profile.”

Lincoln Hopper

It is a big information gap that needs to be filled, said St Vincent’s Care Services chief executive officer Lincoln Hopper.

“Despite this encouraging consistent news about an uplift in that price, the extent that it does cover those minimum staffing levels, it is still yet to be seen,” Mr Hopper told AAA.

Providers need the shadow assessments to be released to make informed decisions, he said. “That would significantly help because then we’ve got accuracy compared to our existing resident base to compare these things to. At the moment, I know we – and other care providers just like us – are doing whatever we can to try and understand and calculate that ourselves,” said Mr Hopper.

“This announcement with those shadow assessments would bring all the relevant information together to allow us to plan with confidence and start to deliver the outcomes that people are expecting from us,” he added.

Wages could impact on meeting staffing requirements

Providers are also concerned the Budget’s failure to address wages could add to existing struggles to attract and retain aged care workers and at a time when more staff will be needed under AN-ACC.

“The Budget had nothing in it that addressed workforce remuneration,” Mr Garcia said. “The question left unanswered by government was how are we going to pay for the extra wages once the Fair Work Commission hands down its decision on award rates and how are we going to attract and retain the extra workers that are needed to meet the minimum staffing requirements and the demands of our ageing population.”

Mr Hopper said he shared in the universal disappointment over the government’s continuing inaction around raising wages.

“It is vital that once the Fair Work Commission hands down its decision on the current minimum award rates claim for aged care workers for whoever is in government to fully fund the wage increases. Failure to fully fund a wage rise will mean that providers will be unable to attract, retain and grow the skilled aged care workforce that is so desperately needed.”

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