Transcript: rorting allegations, ABC 7.30 Report

Thursday night’s 7.30 Report tv current affairs program on ABC 1 featured a story alleging rorting of the aged care funding system by some aged care providers. Watch the segment and read the transcript here.

Thursday 16 August: ABC TV’s 7.30 Report program ran the following story alleging rorting of the aged care funding system – via the Commonwealth government’s Aged Care Funding Instrument (ACFI) – on the part of some aged care providers.  The program has published the following transcript of the report.  This transcript was also was circulated today as a media release by the office of the Minister for Mental Health and Ageing, Mark Butler.

The Minister has responded today, as reported on ABC Radio’s The World Today, promising to investigate the claims made in the 7.30 Report program that senior managers in the Department of Health and Ageing have ignored evidence of rorting in the aged care industry.

Watch the segment of the 7.30 Report program here or read the transcript below:

LEIGH SALES, PRESENTER:         Whistleblowers from the Department of Health and Ageing say millions of dollars have been rorted from Federal Government aged care funding.

The Commonwealth nursing officers say they were told to look the other way when they found evidence of rorting.

Taxpayer dollars designated for the care of the elderly Australians have been used to pump up the profits of some aged care providers. Sally Sara reports.

SALLY SARA, REPORTER:
The Federal Government pours more than $7 billion into the residential care of elderly Australians. But tonight, insiders are blowing the whistle on rorting in the system.

NURSE (female voiceover):
“The public would be absolutely horrified if they knew what was going on.”

SALLY SARA:
These are the words of nurses employed by the Department of Health and Ageing. Their job has been to go out to aged care facilities to check the funding claims of providers.

NURSE (female voiceover):
“In some places, they treat the residents like a cash cow.”

SALLY SARA:
The nurses don’t want to have their real names or voices broadcast because as public servants they’re not allowed to speak out, but they’re so disgusted by the cheating they’ve seen in the aged care industry, they can’t keep quiet any longer.

NURSE (female voiceover):
“It’s just so unethical. It’s corrupt. The scale of the rorting is huge. It’s taxpayers’ money.”

SALLY SARA:
To make it worse, they say some of their managers didn’t want to know about it.

NURSE (female voiceover):
“We were told to look the other way, tick it all, let it go through.”

NURSE (female voiceover):
“I was told many, many times it was not my money.”

SALLY SARA:
The Federal Government pays aged care providers to take care of the elderly. The higher the care needs of the resident, the larger the payment. The money is calculated per resident, per day using a measure called the Aged Care Funding Instrument, or ACFI. It’s a series of questions on everything from mobility to dementia.

But the whistleblowers say some aged care facilities are exaggerating their residents’ needs to get more ACFI money.

NURSE (female voiceover):
“I’m 100 per cent sure it is deliberate over-claiming, not administrative errors.”

MICHAEL O’NEILL, SENIORS AUSTRALIA:
I think given the size of the money that’s involved here, hundreds and hundreds of millions of dollars, it’s very disturbing. I think it reflects unfortunately the system that has broken down.

SALLY SARA:
Lawyer Rodney Lewis says not only are some aged care facilities falsely classifying their residents as high care, they’re not providing any extra services.

RODNEY LEWIS, LAWYER, AGED CARE CRISIS:
When extra funding becomes available as a result of reclassification, there is normally and generally no change in staffing and no change in care services to the person concerned.

SALLY SARA:
Mr Lewis represents an 84-year-old man who was reclassified as high care even though his family believes he was mentally and physically sound. It delivered extra funding to the aged care facility, but there was no extra care.

RODNEY LEWIS:
There was not an extra pill in his pill box. There was not an extra chip on his plate. It made no difference to him.

SALLY SARA:
There’s big money to be made from aged care funding and it’s legal.

MAN (advertisement):
Let us show you how we can help you with this and not only benefit your residents but also improve your funding.

ADVERTISEMENT (male voiceover):
“Find the hidden goldmines in your site. You’ll be surprised at how many overlooked residents you could get from $100 to $160 or more.”

SALLY SARA:
These are the advertisements of a consultant promising to maximise government funding for aged care providers.

ADVERTISEMENT (male voiceover):
“W&L ACFI Consultants help to find one of our clients over $1 million in funding…”

SALLY SARA:
Nick Heywood-Smith is a physiotherapist, now award-winning entrepreneur. He doesn’t apologise for his company’s blatant spruiking.

NICK HEYWOOD-SMITH, WELLNESS & LIFESTYLES:
Look, I think sometimes we are targeting those advertisements, we’re targeting the CEOs and the boards of these aged care facilities, who are purely looking at the figures.

SALLY SARA:
Wellness & Lifestyles website shows nursing home owners how to claim more than $315,000 in government funding for pain management, but only $50,000 would need to be spent on the residents, the rest, more than a quarter of a million dollars, can be spent elsewhere or claimed as profit.

Is that ethical?

NICK HEYWOOD-SMITH:
Ethical? Well I think the – if the residents are receiving pain treatments that they’ve got an assessed need for, then absolutely it’s ethical. It’d be unethical not to deliver that treatment.

SALLY SARA:
Wellness & Lifestyles receives a 10 per cent share of any extra government funding it can get for providers. They say the funding they secure for their clients is legitimate and the Department would be able to downgrade the payments if they were inflated.

NICK HEYWOOD-SMITH:
We’ve had zero downgrades with our consultancy service. So none of our facilities have lost funding on any of the recommendations we’ve made. I don’t think there’s rorting going on at all in South Australia, definitely not with our clients. Some clients may be trying to push their boundaries a little bit, but because the industry is so heavily regulated, they will get caught out.

SALLY SARA:
In 2007, the Physiotherapy Board of SA fined Mr Heywood-Smith for unprofessional conduct after he was found to have solicited commissions from a wheelchair manufacturing company in exchange for recommending their product.

NICK HEYWOOD-SMITH:
Oh, look, those – that court case was something to do with – completely different. It was actually health care products.

SALLY SARA:
The company’s owner reported him and says members of the public have no idea how tough the aged care industry can be.

ROD MEURIS, DESIGN & INNOVATIONS SA:
I think people that wouldn’t have thought twice about it would be absolutely shocked, devastated to find out how snaky this is. Yeah, absolutely.

SALLY SARA:
Mr Heywood-Smith’s approach on aged care funding may be questionable, but it’s not illegal. It’s just how the system has been allowed to work. Those providing care deny they’re putting profits ahead of ethics. Providers say they’re obliged to get as much funding as possible to deliver the best possible care.

GERARD MANSOUR, LEADING AGE SERVICES AUSTRALIA:
It’s not a pot of gold. It’s about matching the funding with the care needs that you’re legitimately entitled to claim

SALLY SARA:
Can you give a guarantee that there’s not rorting going on?

GERARD MANSOUR:
I’m not aware of – you know, I deal with lot of providers all the time of individual circumstances. What I can say that there’s a very strong validation system in place.

SALLY SARA:
But aged care funding blew out by more than $2.3 billion last year.

MARK BUTLER, MINISTER FOR MENTAL HEALTH AND AGEING:
I’m worried about the very aggressive behaviour of consultants encouraging providers to maximise their income. There are obviously providers in the sector who deal with the instrument as they should, but there appears to be a number who are claiming in a way that they shouldn’t.

SALLY SARA:
In April, the Minister announced a crackdown on providers who cross the line between maximising their income and fraud.

RODNEY LEWIS:
It’s actually a fraud on the Commonwealth. I mean, if you inflate claims and you receive money as a result of those so-called inflated claims and if you make a false claims on the Commonwealth for money, you may very quickly get a knock on the door from the Australian Federal Police.

MARK BUTLER, MINISTER FOR MENTAL HEALTH & AGEING:
I’ve asked for detailed advice about what the full range of options are that we have and where there was a case of fraud obviously it would be incumbent upon us to refer that to the authorities.

SALLY SARA:
The nurses who are blowing the whistle hope the minister is as good as his word.

NURSE (female voiceover):
“The industry needs a clean-up, it stinks. The Department needs to get its act together because it stinks too.”

LEIGH SALES:
Sally Sara with that report.

[See response posted today to this report from Nick Heyward-Smith from Wellness & Lifestyles.]

Tags: 7.30-report, acfi, rorting, sally-sara,

3 thoughts on “Transcript: rorting allegations, ABC 7.30 Report

  1. I would never advise an aged care provider or member of staff to act in a way that is frauding the ACFI. It really is a simple case that no matter what the governemnt is paying as a subsidy for services provided the validation of care needs has to be the focus for the clinical leaders and care team leaders. Nurses are responsible for the assessment and planning of care to those in the RACF. The Nurses need to fully apply their skills in the nursing process and carry out a true and correct process that reflects the care needs of the individuals. This process (in my opinion) needs to continuous and improved as the elderly frail, and the care needs increase.
    The true cost of care needs to be identified by the dept as currently it is not reflective of the care needs of many residents today. If the funding instrument was reflective, there would be not need for a provider to “rort” the system. In saying that there is good money being provided, but more is needed.

  2. Surely if the DOHA officers performed their job half competently, audited the randomised 20% of the residents against the ACFI claims made against them by the RACF, any so called rorting irregularities would have surfaced and warranted a full scale audit with the necessary adjustments and penalties. If all the RACFs have had their claimes checked and validated since ACFI was introduced, any “rorters” should have been singled out and dealth with accordingly. This allegation suggests that there have been “rorters”, possibly responsible for defrauding the Federal Government of many $000,000’s so who’s been asleep. Greater accountability is required at DOHA, where heads should roll off the guillotine for their ineptitude. Now it seems that all RACFs are being impacted by the $480 Million claw back with ACFI funding. The Minister really needs to sort his Department out before he suggests anything about providers rorting the system because they have not been doing their jobs properly.

  3. Doesn’t anyone wonder about the timing of this “expose”? Just as the pressure is mounting on the cut back of the forward estimates this appears. Is it simply an attempt to get the pressure back off Government? After all we are talking about the ABC. The ACFI tool was developed to “better align funding and care need” and did nothing but reallocate the then inadequate funding – there was basically no extra funding. DH&A have observed through their review of ACFI that it was effectively doing what was intended – there was no mention of concern about “rorting”. This only arose late 2011 as the Government stared down yet another budget deficit. The tools and triggers for taking action against fraudulent claims are in the hands of the Government – if it is all so rife why hasn’t action been taken? The simple answer is that it is all a beat up aimed at achieving a budget surplus off the backs of older Australians and those providing the care for them. They are both seen as easy and dispendable targets. Government has reduced forward funding estimates substantially and has yet to provide any independent advice on either the true cost of the care they wish to see delivered, or what they consider to be an appropriate return to the organisations actually doing the job of care delivery, and running all the extra and substantive risks associated with a system completely controlled by bureacrats. Let’s face the facts – this has nothing to do with excessive claiming – it has absolutely everything to do with delivering a budget surplus at all costs, and this little episode is probably one of the lowest actions taken so far by a Government in terms of ethical standards.

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