Controversial call to regulate admin fees in home care packages

Consumer peak body Alzheimer’s Australia is proposing the Federal Government introduce a cap on the administration fees providers can charge as part of the delivery of home care packages and for all admin charges to be published on My Aged Care.

Consumer peak body Alzheimer’s Australia is proposing the Federal Government introduce a cap on the administration fees providers can charge as part of the delivery of home care packages and for all admin charges to be published on My Aged Care.

The recommendation was in response to ongoing concerns about excessive charges and a lack of transparency around how costs have been calculated. The peak body said it had received reports of fees equivalent to up to 70 per cent of a consumer’s package.

However providers have said they would be “strongly opposed” to the idea of a cap, which goes against a market-based community aged care system.

As part of the home care reforms from February 2017, the Federal Government is proposing maximum exit fees be published on My Aged Care, but Alzheimer’s Australia has called for the transparency measures to go further to include the disclosure of all admin charges on the website.

“It is imperative that in regard to administration fees there is also adequate transparency and disclosure, including publication of the fees on My Aged Care and Alzheimer’s Australia also proposes that an absolute cap be in place in relation to the quantum of administration fees that can be charged by providers,” the peak body wrote in a submission to the draft delegated legislation for the home care changes.

The peak body said the higher costs for rural and remote providers should be dealt with in the government’s funding formula rather than through the deduction of higher fees which impact the funds available for care.

While the peak acknowledged that mandating a maximum fee may encourage service providers to charge that fee, it said this “would still be an improvement on the current situation.”

Chief executive of COTA Australia Ian Yates said it supported increased transparency and comparability of pricing for consumers and was pushing for a standardised set of comparable prices to be published on My Aged Care.

He said comparability of unit pricing would eliminate the need for a cap for admin charges in home care.

Mr Yates said he did not support the separation of charges into admin charges and other fees, which was confusing for consumers and did not enable easy comparison.

He pointed to the energy sector as an example of how price comparability of basic services could offer consumers greater transparency and support decision-making.

“It is our view that it is possible to get a comparable set of fairly commonly used services that has to be published on the My Aged Care website for comparison purposes.”

Leading Age Services Australia CEO Sean Rooney said it was “strongly opposed” to any proposal to cap administration fees.

“In a consumer driven system – which is what consumers have been lobbying for – capped pricing makes no sense; it actually goes against free market principles.

“The administration costs vary for providers based on all sorts of factors, including location, just as they do for any other service provider. Providers have every right to recoup these costs which contribute to their ability to deliver the service.”

The peak body for mission-based aged care providers Aged and Community Services Australia said it did not agree with the proposed requirement that exit fees charged when a consumer switched providers or left their package be advised to the department and published on My Aged Care.

“Exit fees should be a matter between the provider and the consumer while publishing of exit fees on the website should be a decision of the provider,” ACSA wrote in its submission to government.

It said all fees and charges should be market-based.

Providers are able to charge administration costs to cover items such as government quality and reporting requirements, organisational overheads, capital costs, developing statements and establishing contracts with subcontractors

Case management and advisory fees can be charged on top of admin charges and will vary depending on the level of involvement of the consumer and their carer.

Submissions to the Increasing Choice in Home Care delegated legislation closed last week.

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Tags: acsa, admin-fees, alzheimers-australia, cota, home-care-packages, lasa,

8 thoughts on “Controversial call to regulate admin fees in home care packages

  1. Perhaps both Alzheimers’ Australia and COTA would like to include how much of the package value is taken up by regulation and red tape? Or perhaps an interest charge applied for the lack of payments from Medicare Australia which continues to completely destroy viability through their inefficiencies, alleged loss of information sent to them and late payments. Currently as a provider we are still fighting for statements from Medicare from January 2016 and we are about to close off the financial year. Just how much would AA and COTA think that is worth in terms of administrative overhead including weekly calls as a minimum to chase up with no response or progress? Would that be included in their proposed Cap?

  2. It didn’t take long. There obviously wasn’t enough regulation and red tape to prevent someone trying to squeeze a bit more out of the system..

    Why the resistance to transparency? Is it deception or guilt?

    The arguments against full disclosure are just embarrassing. How would a simple table of clearly itemised fees confuse the customer and hinder easy comparison? COTA should check its mission statement.

    And LASA best cancel any future calls for government intervention if it intends to cite free market principles. By the way, those same principles are reliant on the participants’ bargaining skills and the liberty to enter or leave the market as they choose. The frail and elderly don’t quite match Mr Rooney’s reference.

    This behavior just confirms that our sector doesn’t possess the integrity to operate without government oversight.

  3. The government and consumer groups can’t have it both ways. They have been actively pursuing a free market economy for aged and community care and that is now becoming a reality. In any free and competitive market businesses must have the freedom to manage their operations – and be judged by consumers on those decisions. Capping administration fees flies in the face of the reform process that is being introduced.

  4. I agree with this. I have heard of a consumer directed NDIS package holder receiving a bill for “phone calls to wheelchair provider” in 30 minute increments, this was provided without consultation and the bill sent from the co-ordinating company without approval. Ad hoc I had heard that the providers were advising staff to use their calendars for billing and moving to a full “lawyer” style billing model… If this occurs then packages will be descerated

  5. In a ‘free market economy’ I should be able to administer the package without having to use an agency. Alzheimer’s and COTA have a lot to answer for given the lack of transparency and pillaging of home care packages over the years.
    Home Care packages were set up out of compassion and more importantly for a need to keep suffering people home as long as possible, though it did not take long for the vested private business groups to maximise their ‘take’.
    Competitive? You must be kidding… agencies have their regular meetings on how to maintain their business models.
    Legislation will change as more early onset dementia/alzheimers’ carers use the home care packages, and they will not accept unexplained, non-negotiable administration fees and feeble ‘industry’ comments.
    And, by the way, just imagine what would happen if voluntary carers stopped their caring role.
    Home Care Packages are being ‘desecrated’ and decimated…as carers we manage on the pittance left over and the business model expects us to grateful? Really?

  6. As a recipient of a CDC Home Care Package for a number of years I am forced to query how much of the management fees goes in the provision of compliance information to the Government.

    The Government seriously controls the fees allowed for Admin and Client Management fees. They are absolutely miniscule (try 3%) in comparison with fess charged for CDC packages.

    Why then, is the Government chasing a “free market” for the CDC sector, when the NDIS is being screwed to the wall and causing so much stress for management in those sectors.

    I have approached an NDIS provider with a request that they consider extending their service to the CDC sector. A fee in the order of 12 to 15% would seem like winning Tattslotto for them.

    I have no problems with Government overview providing it is sensible, simple and not subject to “rorting and inefficiencies in government departments.

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