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Brokerage agreements in the mix of Consumer Directed Care

By Julie McStay03 Nov 2015

The Consumer Directed Care (CDC) changes over the last 18 months have significantly affected home care services. Some of the main issues we have seen arise relate to negotiating brokerage arrangements with third party service providers.  Approved providers and service providers are frequently asking:

  1. Does an approved provider have to comply with a care recipient’s request for a particular service provider?
  2. If an approved provider does not comply with a care recipient’s request what are the consequences?
  3. To what extent is the approved provider responsible for the delivery of care by a third party service provider?

Compliance with a care recipient’s request

An approved provider cannot be compelled to sub-contract the delivery of care to a third party service provider at the request of a client, but they do have an obligation to take all reasonable steps to secure an acceptable sub-contracting arrangement with a service provider at the client’s request. This is underpinned by a fundamental principle of CDC which is that the provider must, wherever possible, try to accommodate the client’s preferences.

Overarching the client’s right to determine their involvement in managing their package is the approved provider’s responsibility to maintain quality of care and services. Because the approved provider remains responsible for administering the home care package, it has a limited right to refuse a request from the client to use a specific service provider if the refusal meets one of the following conditions:

  • The proposed service may cause harm or pose a threat to the health and/or safety of the consumer or staff.
  • The proposed service is outside the scope of the Home Care Packages Programme.
  • The approved provider would not be able to comply with its responsibilities under aged care legislation or other Commonwealth or state/territory laws.
  • The consumer’s choice of service provider is outside the approved provider’s preferred list of service providers and all reasonable efforts have been made to broker an acceptable sub-contracting arrangement.
  • The consumer’s choice of service provider will not enter into a contract with the approved provider.
  • There have been previous difficulties or negative experiences with the consumer’s choice of service provider.
  • Situations in which a consumer may want to go without necessary clinical services (resulting in a possible compromise of their health and/or wellbeing) in order to “save” for a more expensive non-clinical service.
  • The cost of the service/item is beyond the scope of the available funds for the package.

If an approved provider refuses the client’s request to use a particular service provider the approved provider must clearly explain their decision and reasons for the refusal in writing.

Consequences of not complying with a care recipient’s request

If an approved provider does not comply with a care recipient’s request and the refusal is without reasonable basis or the approved provider has not met their obligations, the client may refer the matter to the Aged Care Complaints Scheme. A complaint may also be made directly to the Australian Aged Care Quality Agency (Agency) or the Department of Social Services (Department).

Generally the Aged Care Complaints Scheme is the first point of contact and may issue directions to the approved provider to resolve the complaint. The worst case scenario in relation to complaints is that the matter could be referred to the Department which can take compliance action against an approved provider. 

Alternatively, if an approved provider refuses a client’s request to use a particular service provider in preference of a service provider they have previously dealt with and:

  • the client’s requested service provider demonstrates that it can provide care and services;
  • that are compliant with the requirements of the legislation; and
  • affordable within the client’s budget,

this type of behaviour may offend the exclusive dealing provisions of the Competition and Consumer Act 2010 (Cth).

Responsibility for care delivery

Under the current system the approved provider remains responsible for the delivery of care regardless of whether they enter into an agreement with a sub-contractor who is the approved provider’s preference, or the care recipient’s preference, to deliver all or some of that care. In all situations an approved provider must meet their obligations under the Aged Care Act 1997 (Cth) and these include meeting the minimum requirements for case management and ongoing monitoring, reviews and formal assessments.   

Steps for best practice

To best avoid disputes in relation to brokerage agreements under the latest CDC conditions we recommend the following steps:

  • Take all reasonable steps to secure an acceptable brokerage arrangement with a service provider of the client’s request.
  • If you wish to refuse a client’s request to use a specific service provider the refusal must meet one of the conditions outlined above and should be thoroughly documented.

Meeting the needs of aged care recipients can be complex. When consulting clients and their families regarding their home care needs a heightened regard for sensitivity is beneficial. In the unfortunate situation that you do encounter problems with clients in relation to service provider arrangements we are available to assist you. 

Our Simply Legal brokerage agreements are also available to assist you in your service provider arrangements. They are updated to reflect the latest CDC conditions and available in long and short form. Please click here.