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Home care reforms bring increased consumer choice

07 Mar 2016

New legislation has been passed in Parliament relating to the home care reforms announced as part of the 2015-16 Budget. The Aged Care Legislation Amendment (Increasing Consumer Choice) Act 2016 was passed on 3 March 2016 and will take effect from 27 February 2017.

End of the ACAR

Approved providers of home care will no longer have to apply through the Aged Care Approvals Round (ACAR) for an allocation of places. Eligible and prioritised consumers will receive subsidised home care from any approved provider of their choice in any location within Australia. However, this will not mean unlimited Commonwealth funding for home care or unlimited Commonwealth funded aged care packages. Under the new system home care packages will continue to be capped at a national level.

Eligibility and priority

A national system of prioritisation will be administered via the My Aged Care website and will determine the order eligible consumers are assigned a home care package. A new piece of legislation will regulate the prioritisation of home care recipients, the Prioritised Home Care Recipients Principles.

The prioritisation process will involve the following steps:

Aged Care Assessment Team will undertake a comprehensive assessment

  • If appropriate, the person will be ‘approved as a recipient of home care’ (the approval can be limited to one or more levels of care)
  • Before a subsidy can be paid, the person must be determined by the Department of Health (Department) to be a ‘prioritised home care recipient’ by considering:
  • how long the person has been approved as a recipient of home care;
  • the person’s priority for home care services;
  • any other factors specified in the Principles.

The Department may also consider exceptional circumstances to justify making a determination (eg emergency care situations or “instances of market failure”).

A computer program will be able to make determination decisions allowing My Aged Care to automatically generate a notice as a decision of the Secretary of the Department.  Once a consumer receives this notice they will be able to approach any approved provider of their choice.

Approved providers

The streamline changes for providers are:

  • suitability criteria will have a greater focus on the way an organisation operates as a whole rather than on individual key personnel;
  • streamline the process for becoming an approved provider; and
  • provide a ‘simple model’ for existing residential care providers to also provide home care, ie by ‘opting-in’ rather than completing the standard application process
  • new obligation to notify the Department about each home care service it proposes to provide home care, and a failure to do so will:
    • mean provider will not be eligible to receive subsidies for that service;
    • possibly result in a sanction being imposed.

New arrangements for unspent home care package funds

To encourage the ‘funding for a home care package will follow the consumer’ approach, when a home care recipient:

  • moves between approved providers any unspent home care amount (subsidy and/or fees paid by the care recipient, less any administrative charges) will move with the care recipient to the new provider;
  • permanently leaves home care any unspent funds will be returned to the care recipient (or their estate) and the Commonwealth according to respective contributions made by each party.

What is ahead for you?

The new legislation brings changes of more flexibility for consumers. The good news for providers is less red tape and less administrative burden from some regulation perspectives.  While the changes will not take effect until 27 February 2017, the market-based approach will bring about competition and it is therefore time to plan workforces and market services to be competitive in the coming consumer driven market.

This content is not intended to be a substitute for legal advice.  If you would like legal advice in relation to the upcoming home care reforms please contact Julie McStay, Director - Aged Care and Retirement Living, Hynes Legal.

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