The transcripts of The Royal Commission into Aged Care Quality and Safety can make for uncomfortable reading when correspondence never intended for a public audience is aired for the scrutiny of the commissioners.

One such passage was presented last week, in which counsel assisting the royal commission, Peter Rozen QC, read to Stephanie Hechenberger, the former regional director of Bupa Aged Care Australia, her own email describing staff cuts and across-the-board increases in ACFI assessments as a “great opportunity” for the aged care provider that soon afterwards failed 32 of the 44 quality standards.

Ms Hechenberger’s email illuminated a widespread problem that has plagued the sector for years – the manipulation of ACFI assessments to maximise funding in aged care.

Staff cut to boost the bottom line

Emails from May 2017 read aloud during the commission reveal a company in financial difficulty and aggressively targeting cost cutting ahead of care.

An email from Ian Burge, operations manager at the time, states there is an urgent need to “improve BACA’s commercial position”. He outlines “how we’re going to move forward”.

One method of reducing costs he described was reducing staff numbers. Homes of between 81 and 120 beds were asked to save at least two shifts of 7.5 hours per day.

There was also a “directive” from management to improve the company’s financial position with a $3 “uplift” in the aged care funding instrument (ACFI) payments for every resident.

“In my understanding it was for the general manager to lead a review of resident assessment in line with their care needs in the home to assess any care requirements above their current ACFI claiming and to ensure that assessments and claims were updated to reflect the resident care and to ensure that the organisation was receiving government funding for the care it was providing,” Ms Hechenberger explained.

Mr Rozen, counsel assisting the royal commission, questioned the “tension” between cutting staff on the one hand, while claimed increased care needs for all residents on the other, particularly in light of the fact that Bupa South Hobart had already failed mock audits.

Ms Hechenberger told the commission she expressed her concerns about the strategy to management, but was still ultimately made responsible for implementing the changes.

Cost cutting became the focus

In regards to cost cutting, Mr Burge wrote, “There are no sacred cows and anything’s possible. So when it comes to rosters, for example, the easiest way to save one, two or three shifts in relation to non-replacement of annual leave.”

An email from Ms Hechenberger from that time reads, “I love working with you all, especially in this time of such great opportunity. Keep up the fantastic work you’re doing… Remember, there are now two key KPI… that you will be measured on: (1) save a shift, one, two or three; (2) ACFI uplift, $2, $3 or $4.”

“It’s pretty clear, isn’t it, from this email that you were asking the general managers to focus their attention and enthusiasm on these initiatives; would you agree?” Mr Rozen asked, to which Ms Hechenberger agreed.

Ms Hechenberger, who has no clinical experience but does hold an MBA, said she didn’t know why she didn’t ask the aged care operator if reducing staff hours would impact on care.

In fact, rather than being concerned about the effect of staff cuts on care, her correspondence suggested she was more concerned the cuts would not save enough money.

Gaming of ACFI “incredibly widespread”

Manipulating ACFI funding is “incredibly widespread”, Peter Vincent, managing director of Aged Care Management Australia, told HelloCare.

He said that unfortunately ACFI is seen by both for-profit and not-for-profit providers as a way of maximising income, and all too often is not driven by the care required.

“It is a problem,” he acknowledged.

Mr Vincent said some providers have had to pay back millions of dollars after being assessed by the Department of Health as having overstated their care needs.

According to data from the June quarter, of 1,808 ACFI assessments were reviewed across Australia, and 708, or 39 per cent, had their ACFI assessment downgraded and had to return funding to the government that was incorrectly allocated to them.

Recurrent funding would provide certainty for providers, government

Mr Vincent said recurrent funding for the sector, where everyone is funded at the same rate, would be easier and lower cost for both providers and the government. Providers would know how much they are going to receive, and the government would no longer have to police assessments.

“There is a lot of support for recurrent funding from some quarters of the sector,” he told HelloCare.

RUCS won’t solve the problem

The RUCS funding model being developed for the sector won’t solve the problem, Mr Vincent said. 

“It’s still an assessment based model, but the assessment will be done by an independent person outside the organisation.

“It’s just shifting the focus and will slow the process down even more,” he said.

What is ACFI?

The ACFI is the mechanism the government uses to assess the care needs of people living in residential aged care. It helps the government determine how much it needs to allocate to the facility to enable them to provide appropriate care for their residents. 

The ACFI consists of 12 care needs across three funding categories:

  • Activities of Daily Living (ADL)
  • Behaviour (BEH)
  • Complex Health Care (CHC)

Each resident is assessed for each of the categories as being high, medium, low or nil.

In May 2016, the government announced plans to change the ACFI model in order to save $1.2 billion over the next budget period – four years.

The plan included cuts to the care of residents with CHC needs, amongst other changes. As a result of the changes, the pain treatments and medication assistance for residents with CHC needs may be lower and less frequent. 

In addition, an updated ACFI scoring matrix meant that some residents’ requirements were adjusted from ‘high’ to ‘medium’.

These changes came into effect in at first from 1 July 2016 and were updated again on 1 January 2017.

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