Proposed law introduces pricing caps for home care
The amount of money that home care providers are allowed to charge for administration would be capped under a private members bill introduced into federal parliament.
Aged Care providers say proposed laws that would cap the amount of money home care providers can charge for administration could result in higher fees and a loss of services.
The Aged Care Amendment (Making Aged Care Fees Fairer) Bill 2021 prevents providers from charging more than 25 per cent in administration for level 1 and 2 home care packages, and more than than 20 per cent for level 3 and 4.
It was introduced as a private members bill on Monday by Rebekha Sharkie, who represents the Centre Alliance Party.
Ban on exit fees
If approved by parliament, the bill will also ban exit fees when changing providers and will require providers to offer prospective clients a comparative fee schedule for at least five approved providers in the area, or if less than five, all providers in the area.
Ms Sharkie says the legislation is designed to prevent “rorting” in the home care system.
The government needs to stop the rorting and introduce pricing caps
Rebekah Sharkie
She says she drafted the legislation after surveying home care recipients in her electorate of Mayo, south-east of Adelaide.
Of the 1,200 respondents who responded, half said they were unhappy with or unsure about the administration fees in their package.
Many reported spending about half of their package on admin and management fees, and 94 per cent said they were unable to afford daily care, Ms Sharkie said.
Lack of guidelines
“Some of these people were only able to afford one hour of cleaning or gardening a fortnight, and their care plans have hardly changed from one year to another, but they were still being charged up to 50 per cent in administration fees.
“I cannot fathom how such low value, static packages can continue to incur such ridiculously high administration and management fees. It’s outrageous and it needs to be stopped.
“My bill will cap fees and it will make more funding available for actual care in the home.”
Ms Sharkie said while providers are currently required to keep management fees “reasonable” there are no guidelines as to what that actually means.
Sometimes costs were hidden in inflated hourly rates, she said.
“The current system is not working,” Ms Sharkie said. “So called competition is not keeping prices down and … the government needs to stop the rorting and introduce pricing caps.
Added complexity will increase costs
LASA CEO Sean Rooney said the Bill appeared to lump care management, an essential home care service, together with administration costs.
He said limiting the ability of providers to charge care and package management fees as a proportion of overall service fees wouldn’t change provider costs, and the bill would only force providers to shift costs to people with the highest package utilisation who were likely to have been allocated less funding than they need.
Mr Rooney said LASA supported measures to address unreasonable pricing in home care, but solutions should not come at the cost of quality monitoring and care management.
Mr Rooney said home care administration costs had fallen from about 25 per cent of costs in 2017 to 22 per cent in 2021.
“If anything, the Bill would likely create further administrative costs by adding complexity to the system,” he said.
Broader analysis of home care pricing by LASA also showed that the prices charged by providers are reasonable compared with other markets such as disability and CHSP, he said.
‘Blunt fee cap’ unhelpful
ACSA CEO Paul Sadler said ACSA had written to Ms Sharkie outlining its concerns about the proposed legislation.
“While we fully support the intent of the bill, which is to make aged care more affordable and easy to understand, unfortunately it doesn’t account for the highly varied nature of home care services and the flexibility that older Australians want in how they are delivered,” he told Community Care Review.
He said in order to make home care more affordable and pay workers better, what was needed was an increase in the funding base, not a blunt fee cap.
“It’s possible this legislation could unintentionally lead to an increase in fees in some cases and a decrease in available services in others,” Mr Sadler said.
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Thank you Ms Sharkie, I am so impressed with your take on this. I am currently trying to get a package for my husband who has multiple problems and dementia and am appalled by the high fees that these providers are taking from people, e.g. $200 for assessment (when they have already been assessed) $25 for a phone call. I worked out I would probably lose about 50% of the package to admin so my poor husband would miss out on therapies he could use. People are not using it because of fees. I hope to manage the package myself if it comes through as 12% or 14% is better than 50%. I have read so many comments from people with packages who give most unfavourable reports and so I am deeply concerned about the gouging. Why does the government not give the money to people themselves to administer if they are capable, to pay and claim back to a certain limited amount. It will continue to be disastrous and services not provided. Thank you so much for your stand on this. It did seem no one cared. But you do. Well done.
Ms Sharkie, there is a way of cutting back on management fees. A few providers allow for ‘Self management’. this means the consumer can manage their own affairs as I do. I am charged a mere 13% management fee because I self manage. I employ the workers of my choice from my local area.This means that in times of fire flood or famine/plague my workers are close by and can still attend to their duties. I feel ,even at 84 years of age that I am still in control of my own life and not at the whim of providers. many folk save their package so ther is money for major items such as a bathroom renovation to cope with using a wheelchair.
Ms Sharkie doesnt appear to have a complete grasp of the complexity of the sector and what putting Aged Care out to the “market” has created. The focus is now completely on funds(attracting it, retaining it, creating an income stream from it) rather than support. The principle of maximising the available dollars for the client is a good objective, but providers forced to lower overhead costs will invariably cut corners on staffing, safety & quality(so, untrained workers, poor retention, poor monitoring & compliance). You get what you pay for. Make it easier for consumers to compare costs and educate about being able to change providers.
Ms Sharkie is right, the money taken by Aged Care Providers out of Packages, leaves little to no money left to get the amount of quality care the older Community Deserve! The ACAT assessment process is not always an accurate reflection of a person’s need, ( my family say, “I can do all that” when in fact, they can’t unless , ( I, the daughter and Carer give all my time to help them! Carer burn out is real as the Age Care System doesn’t see Carers as important!
Then if you do argue the point and show evidence of higher needs going unmet, the funding isn’t there to increase to a higher level Package, sometimes people die ..alone, ( in a house for days, with no one finding them) as Support only comes a few times a week, and no one can afford weekend care!
Older people deserve and need a better system, a cap on fees is a step in the right direction, giving money back to Support Worker funding to check on older people and actually help with their needs across a 7 day week!
It would be a great idea for the government to put a ceiling on excessive charges as these funds are simply swelling the profits of so many providers, with dire consequences for recipients as far less is available to spend