Resident’s payment class not provided to facility until after entry under new model

The assessment and funding model proposed by the University of Wollongong recommends residents be grouped by 13 payment classes and that facilities not be advised of a resident’s class until after they are in care.

The assessment and funding model proposed by the University of Wollongong’s landmark study recommends residents be grouped by 13 payment classes and that facilities not be advised of a resident’s class until after they are in care.

The findings of the government-commissioned Resource Utilisation and Classification study undertaken by the University of Wollongong’s Australian Health Services Research Institute have been published in a suite of seven reports that were released on Friday.

The four-part study aimed to determine the characteristics of residents that drive care costs and inform the move to a more stable and effective funding tool and system that offers providers and government greater financial stability.

The study makes 30 recommendations including the adoption of the proposed assessment and funding model known as the Australian National Aged Care Classification (AN-ACC) system and the development of a two-year national transition strategy to implement the system.

Minister for Senior Australians and Aged Care Ken Wyatt described the comprehensive research as “a game changer for aged care” because it proposed a completely different way of allocating funding for residential aged care.

The AN-ACC assessment and funding model is based on the following six key design elements:

  • resident funding assessment to be separate from resident care planning assessments
  • funding assessment to be undertaken by external assessors capturing the information necessary to assign a resident to a payment class
  • care planning assessment to be undertaken by the aged care facility based on resident needs and underpinned by consumer directed care principles
  • a one-off adjustment payment for each new resident that recognises additional but time-limited resource requirements when someone enters residential care
  • a fixed price per day for the costs of care that are shared equally by all residents and that may vary by location and other factors
  • a variable price per day for the costs of individualised care for each resident based on their AN-ACC casemix class.

The AN-ACC, which consists of 13 classes based on end of life needs, frailty, functional status, cognition, behaviour and technical nursing needs, has three key roles as an information tool including to inform input measures.

Once the classification is in routine use, it will be possible to define staffing requirements by AN-ACC class and develop best practice models of care for each class, the study found.

The AN-ACC is also a tool to measure and fund outputs, such as a day of resident care adjusted for the needs of different types of residents, and to meaningfully measure resident outcomes for benchmarking and other purposes.

The study recommends that all new residents be assessed by an independent assessor using the new assessment tool within four weeks of entering residential aged care.

However, it proposes that aged care facilities should not be advised of the resident’s exact AN-ACC class until after the person is in care and a default payment class at entry of Class 2, which refers to a resident who is independent without compounding factors.

“A desirable feature of a funding model for residential aged care is that it does not create incentives for homes to select residents based on their payment class,” the study found.


The study also recommends that subsidies paid to facilities consist of a base care tariff for care costs shared by all residents, which are grouped by six categories reflecting the structural costs of delivering care in different types of facilities, and an additional payment for each residents based on their class.

It proposes that the base tariff for facilities in the two most remote categories be based on approved beds with all other base tariffs based on occupancy.

The study also recommends the requirement of each resident to undergo a care planning assessment at least annually with outcomes discussed with residents and carers to form the basis of an annual care plan as a condition of claiming the subsidy.

Assessment workforce

The AN-ACC model also calls for the development of a workforce of credentialed assessors who are external to aged care facilities.

The study found the Australian Aged Care Quality Agency’s assessment workforce was a useful prototype model and should be used to guide the development of a national networked external assessment model for the AN-ACC funding assessment.

The study proposes that external assessment be undertaken by credentialed registered nurses, occupational therapists and physiotherapists who:

  • have experience in aged care
  • complete approved AN-ACC assessment training
  • comply with continuing professional development requirements.

Consultation open

The government is seeking sector and community feedback to inform decisions around residential care funding reform and the design elements of the proposed new assessment and funding model.

The University’s reports are available here.

Papers for the consultation, which is open until 31 May 2019, can be accessed here.

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