Leading Age Services Australia (LASA), the voice of aged care, says all cash savings from a Commonwealth plan to change home aged care administration must go straight to reducing the nation’s unacceptable home care queue.

Commenting on the release of an Aged Care Financing Authority (ACFA) report into the proposal, LASA CEO Sean Rooney said the changes could deliver a one-off Government saving of hundreds of millions of dollars.

“The current queue is appalling, with over 112,000 older Australians waiting to receive packages at their approved level,” he said. “LASA supports the payment administration changes in-principle, as long as all savings are used to boost home care packages (HCP). 

“At the same time, the ACFA report raises serious risks associated with the Government’s suggested implementation and timeframes, with more than 80 per cent of LASA’s surveyed providers reporting cash flow concerns ranging from somewhat challenging to unachievable.

“We are worried some providers may not be able to afford to transition to the changed HCP payment arrangements without adequate safeguards, leaving care recipients in limbo.

“It is also imperative the Government provides timely advice to both older Australians and their care providers about details of the planned changes and any impacts on care delivery.”

The Federal Government proposal is to implement a “payment in arrears” model for home care providers for services delivered, instead of the current advance payment system which includes the full monthly value of a client’s HCP. The plan is to minimise the accumulation of unspent HCP funds held by providers and align payments more closely with modern business practices and the NDIS system. 

Key LASA recommendations to reduce the impact of the changes have been endorsed by ACFA including:

  • Short-term grants or loans and free financial advice to assist providers during the transition
  • Special consideration for regional and remote providers and those in thin markets
  • A trial period for the new system to minimise disruption
  • Retention by providers of unspent funds until each recipient leaves home care

The first phase of the changes is proposed for introduction from June 2020. The report also flags concerns over the effective trialling and implementation of a new payment system by April 2021.The ACFA report suggests moving phases two and three back from April 2021 to June 2021. 

ACFA commissioned chartered accountants StewartBrown to analyse the financial impact of the proposed changes.

Chartered accountants StewartBrown found 30 per cent of sampled HCP providers reported a financial loss before tax in the 2018-19 financial year.

“LASA supports the increase in transparency around HCP spending but it is vital the cash flow and administrative costs that will come with the changes are taken into account,” said Mr Rooney.

“It is critical impacts are minimised for clients and the many already fragile businesses providing vital care.”

The ACFA and StewartBrown reports are available here.

The full LASA submission to the Government’s consultation process is available here.

Stock photo. Posed by model. Image: kali9, iStock.

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