Bills Digest no. 94 2015–16
PDF version [669KB]
WARNING: This Digest was prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments. This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.
Alex Grove
Social Policy Section
1 March 2016
Contents
List
of abbreviations
Purpose of the Bill
Background
Committee consideration
Policy position of non-government parties/independents
Position of major interest groups
Financial implications
Statement of Compatibility with Human Rights
Key issues and provisions
Other provisions
Concluding comments
Date introduced: 11
February 2016
House: House of
Representatives
Portfolio: Health
Commencement: Sections
1 to 3 upon Royal Assent. All other provisions on 27 February 2017 except Division
1 of Part 2 (contingent amendments) which will not commence due to the
commencement of the Aged Care Amendment (Red Tape Reduction in Places
Management) Act 2016 on 11 February 2016.
Links: The links to the Bill,
its Explanatory Memorandum and second reading speech can be found on the
Bill’s home page, or through the Australian
Parliament website.
When Bills have been passed and have received Royal Assent, they
become Acts, which can be found at the ComLaw
website.
Abbreviation
|
Meaning
|
AA
|
Alzheimer’s Australia
|
ACAR
|
Aged Care Approvals Round
|
ACAT
|
Aged Care Assessment Team
|
ACSC
|
Aged Care Sector Committee
|
Act
|
Aged Care Act 1997
|
Bill
|
Aged Care Legislation Amendment (Increasing Consumer
Choice) Bill 2016
|
CDC
|
Consumer Directed Care
|
CEO
|
Chief Executive Officer
|
CHA
|
Catholic Health Australia
|
CHSP
|
Commonwealth Home Support Programme
|
DoH
|
Department of Health
|
HACC
|
Home and Community Care
|
HCP
|
Home care package
|
LLLB
|
Living Longer. Living Better.
|
NHHRC
|
National Health and Hospitals Reform Commission
|
PC
|
Productivity Commission
|
Transitional Provisions Act
|
Aged Care (Transitional Provisions) Act 1997
|
The purpose of the Aged Care Legislation Amendment
(Increasing Consumer Choice) Bill 2016 (the Bill)[1]
is to amend the Aged
Care Act 1997[2]
(the Act) and the Aged
Care (Transitional Provisions) Act 1997[3]
(the Transitional Provisions Act) to:
- allocate
home care packages (HCPs) directly to consumers, rather than to
approved providers
- create
a national system for prioritising consumer access to HCPs and
- reduce
regulation of the approval process for all aged care providers.
The Australian Government subsidises aged care services for
older people who cannot live without support in their own homes.[4]
The Act and associated Principles provide the regulatory,
funding and quality framework for residential aged care, home care and flexible
care services.[5]
The Transitional Provisions Act and associated Principles provide for
continuing care recipients (who were receiving an aged care service under the
Act prior to 1 July 2014 and are still receiving that service) to continue under
the pre-1 July 2014 subsidy and fee arrangements.[6]
As at 30 June 2015, under the Act there were:
- 72,702
operational home care packages providing aged care services to individuals in
their homes[7]
- 192,370
operational residential care places providing permanent and respite care in
aged care homes and[8]
- 7,629
operational flexible care places.[9]
The majority of Australian Government expenditure under the
Act in 2014–15 was for residential care ($10.6 billion), with $1.28 billion
spent on home care packages and $407.5 million on flexible care programmes.[10]
The Australian Government also provides funding for aged
care services outside of the Act. The largest single component of this funding
in 2014–15 was $1.9 billion for Home and Community Care (HACC) services.[11]
HACC providers offer basic maintenance, support and care services such as
domestic help, counselling, personal and nursing care, meals, transport and
home modifications.[12]
From 1 July 2015, HACC (other than in Victoria and Western Australia) was
integrated with three smaller programs to form the Commonwealth Home Support
Programme (CHSP). The CHSP provides entry-level home support to older people
and their carers. [13]
Home care packages
An HCP is a coordinated package of care provided to an older
person by an approved home care provider. It offers a greater level of support
than the CHSP. HCPs assist older people to stay at home (rather than entering
residential aged care) and provide ongoing personal and support services and
clinical care. All HCPs are now delivered on a Consumer Directed Care (CDC)
basis. CDC allows the HCP recipient to have more choice and flexibility when
selecting care and services, including a say in how the funding for their HCP
is spent.[14]
HCP recipients can choose to include a variety of services
in their package, including:
- personal
care such as assistance with bathing, dressing, mobility and communication
- nutrition,
meal preparation and feeding
- skin
care
- continence
(bladder and bowel) management
- mobility
aids and
- nursing,
allied health, hearing and vision services.[15]
There are four levels of home care packages, ranging from
Home Care Level 1 (supporting people with basic care needs) to Home Care Level
4 (supporting people with high care needs).[16]
The higher the level of the package, the more funding it attracts. Daily HCP
subsidies currently range from $21.71 (Home Care Level 1) to $132.01 (Home Care
Level 4). Supplements may also be paid depending on the consumer’s
circumstances (for example, if they have dementia, need oxygen or tube feeding,
or live in a rural or remote area). Subsidies and supplements are currently
paid directly to the approved provider of the HCP. [17]
Consumers are required to contribute to the cost of their
HCP. Everyone receiving an HCP can be asked by their provider to pay the basic
daily fee of up to 17.5 per cent of the single basic Age Pension (which
currently equates to $137.76 per fortnight).[18]
Part pensioners and self-funded retirees taking up an HCP from 1 July 2014 can
also be asked to pay an income tested fee (subject to annual and lifetime
caps). The Commonwealth subsidy received by the provider of the HCP is reduced
by the amount of the income tested fee.[19]
Continuing care recipients are able to continue on the pre-1 July 2014 fee
arrangements, under which basic daily fees and income tested fees were not
applied consistently by providers (because the subsidy received by the provider
was not reduced by the income tested fee).[20]
Planning and allocation of aged
care places
The Australian Government controls the supply of subsidised
aged care places. The current planning framework aims to increase the number of
aged care places in line with the ageing population, and to balance provision
of places across metropolitan and non-metropolitan areas, including for people
with special needs. [21]
The Government is aiming for an aged care provision ratio of 125 aged care
places per 1,000 people aged 70 years or over by 2021–22.[22]
As at 30 June 2015, there were 111.5 operational aged care places (81.1
residential and 30.4 home care) per 1,000 Australians aged 70 years or over.[23]
Aged care places are currently allocated directly to
providers who are approved to provide aged care under the Act (approved
providers), rather than directly to consumers. Existing places allocated to
providers generally continue from year to year. For new places, the Minister
determines the number of additional residential, home care and flexible care
places to be made available in each state and territory each year, in
accordance with the planning framework. The Secretary (or delegate) then
distributes these places amongst the Aged Care Planning Regions in each state
and territory. Prospective and existing approved providers compete for the
majority of these places (with the exception of some flexible care places)
through the open Aged Care Approvals Round (ACAR).[24]In
anticipation of the passage of this Bill, the 2015 ACAR is expected to be the
last one in which providers can apply for an allocation of new home care
places.[25]
Consumer access to HCPs
In order to access an HCP, a person must be assessed and
found eligible for home care by an Aged Care Assessment Team (ACAT). They then
need to find an approved home care provider that has an HCP available (either
at their assessed level or a lower level).[26]
Consumers who have been assessed as eligible can join the
waiting lists of individual providers, if a suitable package is not immediately
available in their area.[27]
Because individual providers maintain their own waiting lists, there is
currently no national data available on the number of people waiting for HCPs
(unmet demand).[28]However,
national data on occupancy rates (met demand) are available. In 2013–14, the
occupancy rate across all HCPs was 88.4 per cent, with the lowest occupancy
rates for Level 1 and Level 3 HCPs (as these were newly introduced levels of
care at that time). Occupancy rates varied across jurisdictions, with Victoria
having the highest occupancy rate (93.2 per cent) and Western Australia the
lowest (77.8 per cent).[29]
Consumers can change providers under the current system, but
only if they can find another provider that has a suitable package available.[30]
Recommendations for greater
consumer choice
In recent years, the National Health and Hospitals Reform
Commission (NHHRC) and the Productivity Commission (PC) have called for greater
consumer choice in aged care, including in home care. Both Labor and Coalition
Governments have responded to these calls.
National Health and Hospitals
Reform Commission
The NHHRC’s 2009 report called for ‘greater choice and
responsiveness in how older people use aged care services’, including through
removing restrictions on the number of places an aged care provider can offer:
We recommend that the current restrictions on the number of
aged care places an approved provider can offer be lifted. This means good aged
care providers will be able to take as many people as wish to use their
services, and older people will no longer have to accept the only place they
can find. Aged care services will compete with each other to attract older
people. Older people who are unhappy with their care will find it easier to
shift to a different service;[31]
and giving home care consumers more choice in how funding
for their care is directed:
... we recognise the value of moving towards ‘consumer-directed
care’, where older people can have more say in tailoring the package of
services that they use to best meet their assessed needs. While such an
approach will need to be developed and introduced over time, our recommendations
support giving people receiving care in the community greater choice in how the
resources are allocated, and to whom, for their care and support;[32]
The mechanisms proposed by the NHHRC for achieving these
changes included removing planning ratios and linking subsidies to consumers’
needs (with the number of subsidies capped at the point of assessment), and
allowing providers to convert some residential places to community care places.[33]
Productivity Commission
In 2011 the PC released a report recommending significant
changes to the operation and delivery of aged care in Australia.[34]
The PC considered the benefits and risks of introducing greater consumer choice
in aged care (such as through CDC), and noted that ‘even a relatively small
number of active consumers switching between alternative services can induce
providers to improve services and encourage broader innovation and quality
improvement.’[35]
Similarly to the NHHRC, the PC recommended that consumers
should access aged care based on their needs (as determined by a proposed
‘Gateway’ assessment). The PC also recommended that consumers should be able to
choose their aged care provider:
the Australian Government should approve a schedule of aged
care services to be provided to individuals on an entitlement basis, according
to the Gateway’s assessment of their need. Individuals should be given an
option to choose an approved provider or providers.[36]
Living Longer. Living Better.
reforms
The Labor Government responded to the PC report in 2012 with
a ten year package of reforms known as Living Longer. Living Better.
(LLLB).[37]
While not implementing all the structural changes recommended by the PC, the
first wave of LLLB reforms, enacted in 2013, did separate the costs of
accommodation and care, require those who can afford to contribute to the cost
of their care to do so, introduce accommodation payments for all people in
residential aged care, place a greater focus on consumer directed care and introduce
a ‘Gateway’ (now known as the My Aged Care website and call centre) to help
older Australians navigate the aged care system.[38]
The LLLB reforms also included a longer term goal to create
a more flexible aged care system driven by consumer choice, with reduced
government regulation:
The longer term vision for reform is to create a more
flexible and seamless ‘end-to-end’ aged care system that provides more choice
and access to the full range of aged care services, from low intensity support
in the home, to Home Care packages and residential aged care provided at
variable levels of intensity. Increasingly, the level and mix of services would
be more driven by consumers and less by government regulation, with the role of
government more focused on protecting equity in access and quality. In line
with the preferences of older people and their families, a key element would be
expanding access to care in the home and enabling people to live independently
in the community as long as possible, including developing a new national
system of home support.[39]
This longer term reform was to include ‘further government
decision making about transition to a less highly regulated system that allows
consumers more choice in how the care subsidy provided by government is used to
support their care needs.’[40]
Aged Care Sector Committee
Following its election win in 2013, the Coalition Government
established the Aged Care Sector Committee (ACSC) to provide advice to
Government on aged care policy and reform. The Committee includes ‘representatives
from across the aged care sector, including, peak bodies, large for-profit and
not-for-profit providers, consumers, workforce, the National Aged Care Alliance
and the Department.’[41]
The ACSC and the Government developed the Aged Care Sector Statement of
Principles to guide future changes in the aged care system.[42]
One element of the Principles is that ‘Funding will attach to the consumer
allowing greater consumer choice of who provides services and how they are
provided.’[43]
2015–16 Budget
The Coalition Government announced in the 2015–16 Budget
that from 1 February 2017, HCPs will be allocated directly to consumers by the
‘My Aged Care Gateway’ rather than to service providers through the ACAR. This
will enable consumers to receive services from a provider of their choice, and
to change providers if they wish. $73.7 million over four years has been
provided for the implementation of this measure.[44]
The measure aims to ‘give older Australians greater choice
in deciding who provides their care, and will establish a consistent national
approach to prioritising access to care.’ It is also intended to increase
competition among providers, leading to improved service delivery, and to
reduce regulation and red tape for providers. The Government calls the changes
a ‘key step in moving to a less regulated, more consumer-driven and
market-based aged care system.’[45]
The Bill implements this Budget measure.
At the same time, the Government announced that it would
consult with the aged care sector on options for combining HCPs with the
entry-level CHSP to create a single integrated care at home programme from 2018.[46]
This ‘second stage of home care reform’ is not implemented by the Bill and is
not discussed further in this Bills Digest.[47]
Senate Standing Committee for
Selection of Bills
The Senate Standing Committee for Selection of Bills
recommended that the Bill not be referred to a committee for inquiry.[48]
Senate Standing Committee for the
Scrutiny of Bills
The Senate Standing Committee for the Scrutiny of Bills has
one concern with the Bill.
The Secretary’s decision to determine that a person is a prioritised
home care recipient under proposed section 23B-1 (and therefore
eligible for HCP funding) is not subject to merits review. The Committee notes
that a person’s priority for home care services (determined by the Secretary
under proposed section 22-2A) is a reviewable decision, and that this is
one matter that the Secretary must consider when deciding whether a person is a
prioritised home care recipient. However, as the Secretary may
also consider other matters in relation to a decision under proposed section
23B-1, the Committee feels that ‘a significant element of discretionary
judgment’ may still be involved.[49]
The Committee is concerned that the provisions ‘may be
considered to make rights, liberties or obligations unduly dependent upon
non-reviewable decisions’. The Committee has sought the Minister’s advice as to
why merits review is impractical in this instance, and whether any alternatives
to merits review have been considered.[50]
Shayne Neumann, the Labor Shadow Minister for Ageing, stated
in 2015 that he wanted consumers to have ‘more choice, control and
flexibility’, but that he would have liked to see ‘the current changes bedded
down prior to any major changes [such as the 2017 HCP reforms] being announced.’[51]
No statements by other non-government parties or
independents specifically relating to the Bill have been identified.
Aged care providers and consumer groups are broadly
supportive of the changes contained in the Bill, although with some concerns in
particular areas. The following summary draws on public comments by relevant
stakeholders, as well as the Department of Health’s (DoH) summary report of
feedback to the Increasing Choice in Home Care – Stage 1 discussion
paper (which does not identify comments by individual stakeholders).[52]
Greater consumer choice
As noted above, the ACSC, which includes representatives
from across the aged care sector, has endorsed the idea that funding should be
attached to the consumer in order to allow greater choice of services.[53]
Ian Yates, CEO of COTA Australia (a peak national body
representing older Australians), has described the Bill as ‘a great first step
in allowing older people to pick and choose their services, and who provides
them’. [54] He believes
the changes will allow consumers to move away from poor providers, and has
urged the Parliament to pass the Bill quickly to allow time for implementation
planning.
Nick Mersiades of health and aged care provider Catholic
Health Australia (CHA) has welcomed the move to let consumers direct their HCP
funding to their preferred provider. He notes that CHA has regularly advocated
for such a measure, although it would like the Government to go further and
eventually remove the rationing of places for all aged care services. He also
notes that for the first time, the aged care sector will have a good measure of
unmet demand in the form of an accurate waiting list.[55]
Brian Sullivan, a community, aged and health policy consultant
with Verso Consulting, has sounded a note of caution regarding quality control.
He notes that the Government can currently influence quality (above and beyond
quality standards) through the ACAR allocation of places, and that this
influence may be weakened under the proposed changes:
The policy levers available under the current system may be
weakened under a heavily market-based approach, which implies a more hands-off
regime. Just look at the vocational training sector scandals. [56]
Information for consumers
Alzheimer’s Australia (AA), which advocates for people
living with dementia and their carers, has welcomed the Bill, but noted that
consumers will not be able to make informed decisions about their care unless
they have clear, easy to access information about their entitlements and the
services that are available to them. AA would like the My Aged Care website to
include quality information about services from a consumer point of view.[57]
The requirement for quality information to support consumer
choice is also reflected in the stakeholder feedback received by DoH:
- Overall, the premise that allowing home care packages
to follow the consumer and opening up the home care market will afford greater
choice, flexibility and continuity of care for consumers was generally
supported.
- However, some stakeholders raised concerns that there
is a risk of confusing consumers with further changes following the
introduction of consumer directed care and with the anticipated increase in,
and variability of, provider marketing.
- Supports will be required to enable consumers to
navigate a market-based system and make informed decisions. Some stakeholders
have suggested adopting a standardised approach to provider marketing/pricing
(e.g. use of consistent terminology) to enable consumers to easily compare
providers.
- Safeguards will be required for consumers
(particularly those from special needs groups) who may not have the capacity,
skill, or support to make decisions regarding their choice of provider.
- The My Aged Care referral process must be transparent
and ensure that consumers are made aware of all suitable providers in their
locality.[58]
Special needs (including
rural/remote) consumers
The Secretary is currently able to determine that a certain
number of aged care places be allocated to people with special needs, such as
Indigenous Australians, people from culturally and linguistically diverse
backgrounds and people living in rural and remote areas.[59]
Some stakeholders are concerned that people with special
needs may not be adequately catered for in a market-based system, when special
needs home care places are no longer allocated through the ACAR.
AA National CEO, Carol Bennett believes that ‘[c]hoice will
only exist if there is also support available to special needs groups’
including consumers with dementia.[60]
AA is also concerned that real choice will not exist in regional and remote
areas where there are limited services.
Brian Sullivan agrees that the main choice for consumers in
rural and remote areas can be ‘simply to get care at home at all.’ [61]
He notes that removing the ACAR for home care and increasing competition may
cause providers to focus on larger population centres in non-metropolitan
areas:
Current regional allocation of places puts some level of
obligation on providers to service all parts of a region. Sometimes this is
best met through regional provider collaborations. There is a real danger that
increased competition between providers will lead to reduced incentives for
collaboration (as seen in the UK) and an increased focus on the more lucrative
population centres in non-metropolitan regions.[62]
The Victorian Healthcare Association is also concerned that
specialised providers of care for vulnerable groups may not be viable under a
free-market model.[63]
Impact on aged care providers
Feedback to DoH suggests that the loss of a guaranteed
allocation of places may threaten the financial sustainability of some
providers, as well as encouraging casual labour:
The removal of allocated home care places will reduce
certainty of service volume and income stream. Some stakeholders raised
concerns that this may impact financial sustainability. A number of
stakeholders have also commented that it may also affect providers’ ability to
manage and plan their workforce, which may encourage casualisation of the
workforce. A casual or contract-based workforce may be more difficult for
providers to monitor consistency of care quality, and to attract and retain
staff.[64]
Jason Horne, CEO of large private aged care provider
KinCare, has called the changes ‘the mother of all disruptions’.[65]
He believes they will have a greater impact on home aged care providers than
Uber has had on the taxi industry. He believes that providers will have to
shift from a focus on compliance to a focus on meeting consumer expectations.
He sees the changes as both an opportunity and a threat, and believes that
market consolidation will cause a number of providers to disappear from the
sector. Horne has also cautioned that the reforms may lead to a ‘honey pot
effect’ similar to that seen in the vocational education and training sector.[66]
In keeping with the Budget announcement, the Government
has committed $73.7 million over four years to implement the HCP reforms.[67]
According to the Regulation Impact Statement in the
Explanatory Memorandum, the net regulatory saving to providers of aged care is
estimated to be $4.51 million per year. The bulk of the savings are expected to
come from ceasing the ACAR process for home care places and streamlining
approved provider arrangements, although these savings are partially offset by
increased costs associated with the management of unspent funds when consumers
leave providers.[68]
As required under Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the
Bill’s compatibility with the human rights and freedoms recognised or declared
in the international instruments listed in section 3 of that Act. The
Government considers that the Bill is compatible because it will give older
consumers greater choice in how they receive home care services, implement a
national prioritisation approach to ensure that HCPs are distributed based on
need, and give older people with disabilities greater choice of care provider.[69]
Parliamentary Joint Committee on
Human Rights
The Parliamentary Joint Committee on Human Rights had no
concerns regarding the Bill.[70]
Allocation of HCPs directly to
consumers
As described in the Background section of this Bills Digest,
aged care places are currently distributed between regions according to a
planning framework, with approved providers competing to have newly released
places allocated to them through the ACAR. Eligible consumers must then find a
provider that has a suitable vacant place to provide their care.
The key measure of this Bill is to allocate HCPs directly to
consumers, rather than to approved providers. This involves amending the
planning and allocation provisions in the Act, introducing new provisions to
prioritise consumer access to HCPs and changing provider eligibility for
Government subsidies to make funding follow the consumer. These changes are
outlined below.
Removing home care from the planning
and allocation process
Currently, the planning and allocation processes set out in
the Act apply to all types of care provided under the Act (that is, residential
care, flexible care and home care). The Minister determines the number of new
places to be allocated in each State or Territory for each type of care, and
the Secretary distributes these among the planning regions.[71]
The Secretary may determine that certain places must be provided to people of
kinds specified in the Allocation Principles, which currently includes people
with special needs and residents with limited financial resources.[72]
The Secretary may then allocate places to an approved provider to deliver a
particular type of aged care within a region.[73]
This is typically done through the competitive ACAR process (discussed
earlier).
Items 24–30 amend the above provisions such that they
only apply to residential and flexible care. This has the effect of removing
home care from the planning and allocation process. HCPs will no longer be
allocated to particular regions within states and territories, nor will certain
HCPs be reserved for people with special needs.[74]
Approved providers of HCPs will no longer compete for places through the ACAR.
However, the Government will continue to cap the total number of HCPs
available, in line with the aged care planning ratio.[75]
Prioritising consumer access to
HCPs
Currently, in order to access subsidised residential,
flexible or home care, a consumer must be assessed (by an ACAT) and approved as
eligible by the Secretary.[76]
Item 39 inserts proposed section 22-2A which
provides that when approving someone as eligible for home care, the Secretary
must determine (and may vary) a person’s priority for home care services, in a
manner that is consistent with the care needs of that person.
Item 41 inserts proposed subsection 22-4(2A)
which specifies that if a person is being assessed for home care, the person’s
priority for home care services must be evaluated as part of the assessment.
According to the Explanatory Memorandum, ‘a person’s
priority for home care services will be largely based on information obtained
through the comprehensive assessment undertaken by an ACAT in accordance with a
clinical framework.’ [77]
This information on a person’s priority will then feed into the proposed
national prioritisation process.
Item 44 inserts proposed Part 2.3A which deals
with the prioritisation of home care recipients.
Proposed section 23B-1 allows the Secretary to
determine that a person who has been approved as a recipient of home care is a prioritised
home care recipient, and to determine the level of HCP that they have
been prioritised for. This in effect means that the person has reached the top
of the waiting list and can now seek an approved provider to deliver their HCP.
In determining that a person is a prioritised home care recipient,
the Secretary must consider the period of time that the person has been waiting,
the person’s assessed priority for home care services, and any other matters
specified in the proposed Prioritised Home Care Recipients Principles. The
Secretary may also consider any exceptional circumstances.
This means that the waiting lists for HCPs currently
maintained by individual providers will be replaced with a national prioritised
waiting list based on a person’s needs and how long they have been waiting.
This is meant to facilitate ‘a more equitable and flexible distribution of home
care packages to care recipients based on individual needs and circumstances,
regardless of where they live.’[78]
It should also allow unmet need (the number of people waiting for packages) to
be easily measured for the first time.
Proposed section 23B-2 allows the Secretary to
increase a person’s level of care as a prioritised home care recipient,
up to and including the highest level of HCP that the person has been approved
for. This provision allows a person to receive an HCP at a lower level, as an
interim arrangement, while still remaining on the national waiting list for a
higher level package.[79]
Proposed section 23B-3 sets out the circumstances in
which a person ceases to be a prioritised home care recipient.
This will occur if the person dies, ceases to be approved for home care, does
not receive home care within a specified period or ceases to receive home care
in specified circumstances.[80]
This means that a person could lose their entitlement to an HCP if they do not
find a provider within a reasonable timeframe, or if they permanently enter
residential care.[81]
Proposed section 23B-4 allows the Secretary to use a
computer program to make decisions to make or vary determinations under proposed
Division 23B (Prioritised home care recipients). The Secretary may
substitute a new decision if satisfied that the initial decision
made by the computer program is incorrect. The Government intends to use the My
Aged Care system to make decisions regarding the national prioritisation
process for HCPs.[82]
Provider eligibility for home care
funding
The Act currently provides that an approved provider is
eligible to receive a home care subsidy from the Government if they hold an
allocation of home care places and they are providing care to an approved
recipient under a home care agreement.[83]
Item 47 repeals and replaces section 46-1 of the Act.
Proposed section 46-1 provides that an approved provider of home care is
eligible for a home care subsidy if they have notified the Secretary that they
are providing home care, they are providing care to a prioritised home
care recipient under a home care agreement, and they have undertaken to
deal with any unspent home care amount in accordance with the
User Rights Principles.[84]
Funding will follow the consumer, and providers will no longer have a fixed
allocation of places.
This will allow eligible consumers to ‘direct government
funding to the provider of their choice’, and to ‘change their provider if they
want to’, or to take their HCP with them ‘if they move to another area or
state’.[85]
The move to a ‘market-based system’ with more consumer choice is intended to
drive ‘quality, value and performance of services’.[86]
In keeping with this market-based philosophy, the Government
has chosen not to further regulate home care agreements (beyond what is already
specified in the Act):[87]
To support transparency and choice for the consumer, before a
consumer commences in a home care package, the provider must disclose all
relevant charges that may be deducted from the total of any future unspent
funds. All applicable charges must be clearly set out in the Home Care
Agreement offered to the consumer and be published on My Aged Care. The
provider will also be required to disclose to the consumer other matters which
could restrict portability, such as minimum contractual periods and required
notice to leave a package.
Consistent with the Government’s approach to reducing
regulation and encouraging businesses to compete in a market-based system, it
is not proposed to initially regulate (prohibit or restrict) minimum contract
periods, minimum notice requirements, or administrative charges on entry, exit
or transfer.[88]
Therefore, although consumers will be free to choose and
change providers under the proposed changes, they may be restricted in practice
by such matters as minimum contract periods and exit fees. The Government may
enact further regulation in the future if there is evidence that ‘restrictive
conditions are being included in Home Care Agreements’.[89]
Reduced regulation for approved
providers
Providers of aged care are currently required to meet
suitability criteria, and also to hold an allocation of places, in order to be
approved providers under the Act.[90]
As home care places will no longer be allocated to providers, the Government
has taken the opportunity to ‘streamline’ these requirements for all approved
providers, not just providers of home care.[91]
Lapsing of approval
The Act currently provides that the Secretary must approve a
person as a provider of aged care if they meet certain requirements. The
approval begins to be in force on the day that the person first has places
allocated to them (whether through an ACAR process or by transfer from another
provider). However, the approval does not come into force if the person fails
to secure an allocation of places within 2 years (or a longer period as
specified in the Approved Provider Principles).[92]
Item 8 repeals and replaces subsections 8-1(3) and
(4) of the Act. Proposed subsection 8-1(3) provides that an approval as
a provider of aged care begins to be in force on the day the applicant is
approved by the Secretary. Thus, applicants will no longer need to secure an
allocation of places within two years to become approved providers.
Further, section 10-2 of the Act currently provides that an
approval of a person as a provider of aged care that is in force lapses if that
person does not hold an allocation of places. Item 23 repeals this
section, with the effect that approved provider status will no longer lapse if
providers are not providing care.
Item 20 inserts proposed section 9-1A, which will
require approved providers to notify the Secretary of certain information (such
as the name and address of each service) prior to first providing home care. This
is to ensure that the Secretary will continue to receive the type of
information that is currently provided by home care providers as part of the
ACAR process.[93]
Streamlined eligibility
requirements for providers
The Act sets out the criteria that the Secretary must
consider when deciding whether to approve a person as a provider of aged care.[94]
These currently include:
- suitability
and experience of key personnel[95]
- track
record of key personnel in delivering aged care for another approved provider
- ability
and record in providing aged care, meeting relevant standards for the provision
of aged care, and committing to the rights of aged care recipients
- record
of financial management (both generally and in relation to the provision of
aged care)
- history
as a provider of aged care, including conduct and compliance with
responsibilities and obligations and
- any
other matters specified in the Approved Provider Principles.
- Item 9 repeals the above criteria and replaces them
with a shorter list of simplified criteria for assessing the suitability of an
aged care provider. The proposed criteria are:
- experience
in providing aged care or other relevant care
- demonstrated
understanding of responsibilities, and systems in place to meet its responsibilities
as a provider of the type of care for which approval is sought
- record
of financial management and methods to ensure sound financial management
- history
as a provider of aged care, including conduct and compliance with
responsibilities and obligations and
- any
other matters specified in the Approved Provider Principles.
This means that the Secretary will no longer be required
to consider matters relating to the applicant’s key personnel, although the
Secretary will still retain the option to consider the above criteria in
relation to key personnel.[96]
There also appears to be a reduced focus on the provider’s past record in
providing aged care (particularly in relation to financial management, meeting
standards and the rights of aged care recipients) in the streamlined criteria.
The proposed criteria are intended to ‘have a greater
focus on the capacity of the organisation as a whole to deliver the type of
care for which approval is sought and less focus on key personnel, who may
change over time.’[97]
In keeping with the streamlined criteria, the Government also intends to
streamline the administrative process to become an approved provider (for
example by streamlining the application form and making it easier for existing
residential and flexible care providers to be approved as home care providers).[98]
The Bill does not alter the responsibilities of approved
providers as set out in the Act.[99]
Extension of delegation powers
The Secretary may currently delegate all or any of his or
her powers and functions under the Act to an officer of the Department.[100]
Item 56 amends this provision such that the Secretary may delegate all
or any of his or her powers and functions under the Act to a person engaged (as
an employee or otherwise) by an Agency or an authority of the Commonwealth. This
is intended to allow for delegations to be made to contractors (due to the
increased volume of decisions required as a consequence of allocating HCPs
directly to consumers).[101]
Amendments to the Transitional
Provisions Act
The Transitional Provisions Act grandfathers aged care
subsidy and fee arrangements for continuing care recipients.[102]Item
63 amends the Transitional Provisions Act to allow approved providers to
continue to receive subsidies for continuing home care recipients when home
care places are no longer allocated to providers. The other amendments to the
Transitional Provisions Act mirror the key amendments to the Act, and are
adequately described in the Explanatory Memorandum.[103]
Application and transitional
provisions
Schedule 1, Part 3 contains application and transitional provisions
to ensure continuity of service for existing providers and recipients of HCPs.
Item 78 provides that anyone who is receiving a HCP
the day before the item commences (that is, on 26 February 2017) will be taken
to be a prioritised home care recipient. This means that the recipient will be
able to continue receiving their HCP under the new arrangements, and will not
have to re-apply or go on the national waiting list.
The other application and transitional provisions are
adequately described in the Explanatory Memorandum.[104]
Government Commissions, consumer groups and aged care
providers have long been calling for older Australians to have more choice in
the care they receive. This Bill represents the first stage in a move towards a
consumer-driven market for Government subsidised aged care in the home. Funding
will follow the consumer, and providers will compete directly for customers,
rather than for a guaranteed allocation of places.
These changes will, for the first time, create a national
waiting list for HCPs, and allow consumer access to be based on assessed need,
as well as waiting time. The Government has also taken the opportunity to
streamline the process for aged care providers to gain approval across all
types of care, not just home care.
While stakeholders are generally supportive of the Bill,
there are concerns that not all home care consumers will be able to exercise their
choice in practice, particularly if they have special needs or live in a rural
or remote area. Restrictive conditions in agreements between consumers and
providers could also limit the portability of HCPs, but the Government has
chosen not to impose further regulation on such agreements at this time.
To the extent that the market can meet the needs of all
older Australians requiring care at home, and the Government releases enough
HCPs to satisfy demand, the measures in this Bill are likely to give consumers
greater choice in the care that they receive.
Members, Senators and Parliamentary staff can obtain
further information from the Parliamentary Library on (02) 6277 2500.
[1]. Parliament
of Australia, ‘Aged
Care Legislation Amendment (Increasing Consumer Choice) Bill 2016 homepage’,
Australian Parliament website, accessed 11 February 2016.
[2]. Aged Care Act 1997,
accessed 11 February 2016.
[3]. Aged Care (Transitional
Provisions) Act 1997, accessed 11 February 2016.
[4]. Department
of Social Services (DSS), ‘Using the Guide to Aged
Care Law’, Guide to Aged Care Law, version 1.09, released 4 January
2016, DSS website, last updated 9 February 2015, accessed 11 February 2016.
[5]. Department
of Health (DoH), 2014–15
Report on the operation of the Aged Care Act 1997, DoH, Canberra, 2015,
p. 2, accessed 11 February 2016. The Principles are made under section 96-1 of
the Act.
[6]. Explanatory
Statement, Aged Care (Transitional Provisions) Principles 2014 (as made),
accessed 11 February 2016. The Principles are made under section 96-1 of the
Transitional Provisions Act.
[7]. DoH,
2014–15
Report on the operation of the Aged Care Act 1997, op. cit., pp. 36–37.
[8]. Ibid.,
p. 49.
[9]. Ibid.,
p. 70. Flexible care includes transitional care (to assist people to return
home after a hospital stay), aged care provided by a Multi- Purpose Service (a
service in a rural or remote area that also provides health and community
services), and innovative care (a small number of grandfathered places
remaining from a home care pilot program).
[10]. Ibid.,
p. xiii.
[11]. Ibid.
[12]. Ibid.,
p. 28.
[13]. Ibid.,
p. 34; DSS, ‘About
the Commonwealth Home Support Programme’, DSS website, accessed 11 February
2016.
[14]. DSS,
‘About
the Home Care Packages Programme’, DSS website, accessed 11 February 2016.
[15]. DSS,
‘Home
Care Packages—Care and Services’, myagedcare website, accessed 11 February
2016.
[16]. DSS,
‘About
the Home Care Packages Programme’, op. cit.
[17]. Aged
Care Financing Authority (ACFA), Third
report on the funding and financing of the aged care sector, ACFA,
2015, pp. 63–64. The value of the subsidies and supplements is set out in the Aged Care (Subsidy, Fees
and Payments) Determination 2014.
[18]. DSS,
‘Help
at home: costs explained’, myagedcare website, accessed 15 February 2016.
[19]. ACFA,
Third
report on the funding and financing of the aged care sector, op. cit.,
p. 134.
[20]. DSS,
‘Home
Care Package Costs if you entered care before 1 July 2014’, myagedcare
website, accessed 15 February 2016; ACFA, Third
report on the funding and financing of the aged care sector, op. cit.,
p. 65.
[21]. DSS, ‘3.3.2 How does the
Commonwealth plan its allocation of places?’, Guide to Aged Care Law,
version 1.09, released 4 January 2016, DSS website, last updated 19 September
2014, accessed 15 February 2016.
[22]. DSS, Expansion of flexible care initiatives, 2015
Budget fact sheet, DSS, 2015, accessed 15 February 2016.
[23]. DoH,
2014–15
Report on the operation of the Aged Care Act 1997, op. cit., p. 13.
[24]. Ibid.,
pp. 14–16; DSS, ‘2015
Aged Care Approvals Round’, DSS website, last updated 2 October 2015,
accessed 15 February 2016.
[25]. DoH,
2014–15
Report on the operation of the Aged Care Act 1997, op. cit., p. 42.
[26]. Ibid.,
p. 36.
[27]. DSS,
‘How
do I get a Home Care Package?’, myagedcare website, accessed 16 February
2016.
[28]. ACFA,
Third
report on the funding and financing of the aged care sector, op. cit.,
p. 57.
[29]. Ibid.,
pp. xx–xxi.
[30]. DSS,
Five
steps to accessing a Home Care Package, DSS, Canberra, 2015, accessed
16 February 2016.
[31]. National
Health and Hospitals Reform Commission (NHHRC), A
healthier future for all Australians: final report, Department of
Health and Ageing (DoHA), Canberra, 2009, p. 109, accessed 16 February 2016.
[32]. Ibid.,
p. 110.
[33]. Ibid.,
pp. 110–111.
[34]. R
de Boer, ‘Caring
for Older Australians report: a sector in need of reform’, FlagPost,
Parliamentary Library blog, 16 August 2011, accessed 16 February 2016.
[35]. Productivity
Commission (PC), Caring
for Older Australians, vol. 2., Inquiry report, 53, PC, Canberra, 2011,
pp. 161–162, accessed 16 February 2016.
[36]. Ibid.,
p. 173.
[37]. DoHA,
Living
Longer. Living Better. Aged care reform package, DoHA, 2012, accessed
16 February 2016.
[38]. R
de Boer and P Yeend, Aged
Care (Living Longer Living Better) Bill 2013, Bills digest, 106,
2012–13, Parliamentary Library, Canberra, 2013, accessed 16 February 2016; DSS,
‘About us’, myagedcare
website, accessed 16 February 2016.
[39]. DoHA,
Living
Longer. Living Better. Aged care reform package, op. cit., p. 24.
[40]. Ibid.
[41]. DSS,
‘Aged
Care Sector Committee’, DSS website, accessed 16 February 2016.
[42]. DSS,
Aged
Care Sector Statement of Principles, DSS, Canberra, 2015, accessed 16
February 2016, p. 2.
[43]. Ibid.,
p. 7.
[44]. Australian Government, Budget measures: budget paper no. 2: 2015–16, p. 147.
[45]. DSS, Increasing choice for older Australians,
Budget fact sheet, DSS, 2015.
[46]. Australian Government, Portfolio budget statements 2015–16: budget related paper no. 1.15A:
Social Services Portfolio, p. 113.
[47]. S
Ley (Minister for Health, Minister for Sport and Minister for Aged Care), ‘Second
reading speech: Aged Care Legislation Amendment (Increasing Consumer Choice)
Bill 2016’, House of Representatives, Debates, (proof), 11 February
2016, p. 6, accessed 16 February 2016.
[48]. Senate
Standing Committee for Selection of Bills, Report,
2, 2016, The Senate, 25 February 2016, accessed 29 February 2016.
[49]. Senate
Standing Committee for the Scrutiny of Bills, Alert
digest, 2, 2016, The Senate, 24 February 2016, pp. 1–3, accessed 25
February 2016.
[50]. Ibid.
[51]. S
Neumann (Shadow Minister for Ageing), ‘Speech
to the Aged and Community Services National Conference, Perth’, transcript,
3 September 2015, accessed 25 February 2016.
[52]. DoH,
Increasing Choice in Home Care – Stage 1: Discussion Paper Feedback,
DoH, Canberra, 2016.
[53]. DSS,
Aged
Care Sector Statement of Principles, op. cit., p. 7.
[54]. COTA
Australia, Older
Australians welcome more choice and control in delivery of home care,
media release, 11 February 2016, accessed 23 February 2016. COTA Australia
was formerly known as Council on the Ageing.
[55]. N
Mersiades, ‘2015 Budget ushers in welcome next steps in aged care reform’, Aged Care Update, Catholic Health Australia (CHA) website,
13 May 2015, accessed 23 February 2016.
[56]. B
Sullivan, ‘Let
the games begin’, Community Care Review, November 2015, pp. 14–15,
accessed 23 February 2016.
[57]. Alzheimer’s
Australia, More
choice and control in aged care = more information needed, media
release, 11 February 2016, accessed 23 February 2016.
[58]. DoH,
Increasing
Choice in Home Care – Stage 1: Discussion Paper Feedback, op. cit., p.
6.
[59]. This
process is discussed further in the ‘Key issues and provisions’ section of this
Bills Digest.
[60]. Alzheimer’s
Australia, More
choice and control in aged care = more information needed, op. cit.
[61]. B
Sullivan, ‘Let
the games begin’, op. cit., p. 15.
[62]. Ibid.
[63]. Victorian
Healthcare Association (VHA), ‘Priority
groups must be protected under new home care system’, VHA website, 10
November 2015, accessed 23 February 2016. The VHA is a peak body representing
public hospitals, rural and community health services, aged and primary care
providers across Victoria.
[64]. DoH,
Increasing Choice in Home Care – Stage 1: Discussion Paper Feedback, op.
cit., p. 7.
[65]. L
Belardi, ‘Home
care reforms the ‘mother of all disruptions’’, Community Care Review,
3 December 2015, accessed 23 February 2016.
[66]. Ibid.
[67]. Explanatory
Memorandum, Aged Care Legislation Amendment (Increasing Consumer Choice)
Bill 2016, p. 2, accessed 22 February 2016.
[68]. Regulation
Impact Statement, Aged Care Legislation Amendment (Increasing Consumer
Choice) Bill 2016, pp. 20–21, accessed 22 February 2016.
[69]. The
Statement of Compatibility with Human Rights can be found at page 28 of the
Explanatory Memorandum to the Bill.
[70]. Parliamentary
Joint Committee on Human Rights, Thirty-fourth
report of the 44th Parliament, 23 February 2016, p. 1.
[71]. Aged
Care Act 1997, sections 12-3, 12-4 and 12-6.
[72]. Aged
Care Act 1997, section 12-5; Allocation Principles 2014,
section 10, accessed 22 February 2016.
[73]. Aged
Care Act 1997, section 14-1.
[74]. Under
section 11-3 of the Aged Care Act 1997, people with special needs
include, amongst others, Indigenous Australians, people from culturally and
linguistically diverse backgrounds, people living in rural and remote areas,
disadvantaged people, veterans, homeless people and lesbian, gay, bisexual,
transgender and intersex people.
[75]. Explanatory
Memorandum, op. cit., p. 16.
[76]. Aged
Care Act 1997, sections 22-1 and 22-4.
[77]. Explanatory
Memorandum, op. cit., p. 38.
[78]. Ibid.,
p. 39.
[79]. Ibid.,
p. 41.
[80]. The
specified period and specified circumstances will be set out in the Prioritised
Home Care Recipients Principles.
[81]. Explanatory
Memorandum, op. cit., p. 42.
[82]. Ibid.,
p. 42.
[83]. Aged
Care Act 1997, section 46-1.
[84]. User Rights Principles 2014,
accessed 22 February 2016. Item 59 provides that unspent home care
amount will be defined in the User Rights Principles.
[85]. S
Ley, ‘Second
reading speech: Aged Care Legislation Amendment (Increasing Consumer Choice)
Bill 2016’, op. cit., p. 6.
[86]. Ibid.,
p. 5.
[87]. Requirements
for home care agreements between a care recipient and an approved provider are
set out in section 61-1 of the Aged Care Act 1997.
[88]. Regulation
Impact Statement, op. cit., p. 19.
[89]. Ibid.
[90]. Aged
Care Act 1997, sections 8-1 and 8-3.
[91]. S
Ley, ‘Second
reading speech: Aged Care Legislation Amendment (Increasing Consumer Choice)
Bill 2016’, op. cit., p. 7.
[92]. Aged
Care Act 1997, section 8-1.
[93]. Explanatory
Memorandum, op. cit., p. 35.
[94]. Aged
Care Act 1997, section 8-3.
[95]. ‘Key
personnel’ is defined in section 8-3A of the Aged Care Act 1997 and
include directors, executives, managers and nursing managers.
[96]. Aged
Care Act 1997, subsection 8-3(2).
[97]. Explanatory
Memorandum, op. cit., p. 33.
[98]. Ibid.,
pp. 33-34.
[99]. Aged
Care Act 1997, Chapter 4.
[100]. Ibid.,
subsection 96-2(1).
[101]. Explanatory
Memorandum, op. cit., p. 45.
[102]. Continuing
care recipients entered care before 1 July 2014 and have not ceased care nor
opted into the new fee and subsidy arrangements. Aged Care Act 1997,
Schedule 1, Clause 1.
[103]. Explanatory
Memorandum, op. cit., pp. 46–48.
[104]. Ibid.,
pp. 49–52.
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