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.]