Home care fee caps could limit choice, say providers

Restrictive capping of home care fees could limit senior Australians’ choice when accessing aged care services, says sector peak.

Restrictive capping of home care fees could limit senior Australians’ choice when accessing aged care servicesaccording to analysis conducted by Aged & Community Care Providers Association.

In the 2020 federal election, the Labor Party committed to capping home care administration and management fees. However, the Aged Care Amendment (Implementing Care Reform) Bill 2022 – which passed the House of Representatives on 1 September and goes before the Senate for a vote on 26 September – goes further by giving the government power to cap any home care fees as it sees fit.

As an explanatory memorandum clarifies, the bill introduces a new power into the Aged Care Act that will enable the government “to cap charges that home care providers may charge care recipients.” It also removes the home care providers’ ability to charge exit fees. These amendments “will increase transparency and will ensure more funds are available to meet the direct needs of care recipients,” it says.

Paul Sadler

In a statement, ACCPA interim CEO Paul Sadler said: “We are concerned the Aged Care Amendment (Implementing Care Reform) Bill 2022 currently before parliament could give the Federal Government wide-ranging powers to cap any home care fee at any level without parliamentary scrutiny.”

While ACCPA respects the Albanese Government’s election pledge and supports rules targeted at “unreasonable outlier administration and management fees,” Mr Sadler said: “Any intrusive form of price regulation does not account for the range of choices that older people and their families autonomously make when accessing home care at various price points.”

He added: “It may also inadvertently remove the option for providers to raise prices in order to pay for higher wages in the context of severe staff shortages.”

In its analysis document – Home care fees and choice – ACCPA found that:

  • every Aged Care Planning Region with more than 600 clients has at least one provider with total fortnightly and package management fees of less than 20 per cent, and the vast majority have providers with fortnightly fees of less than 15 per cent
  • most people – about 7 in 10 – choose providers with fortnightly fees of 20-30 per cent, skewing towards the higher end of this range
  • average package and care management fees are already lower than package and care management costs
  • the average home care provider has a lower margin than the average café.

Instead of a blanket cap on home care fees, ACCPA is suggesting capping only outlier prices, above the 90th percentile of current package and care management prices.

Other suggestions highlighted in the document include the government supplying information on provider availability and adding a filter button or price slider to the My Aged Care website that allows people to search for high and low-cost providers.

“It’s imperative that all pathways towards aged care services remain accessible and do not limit the choices of older people and their families,” said Mr Sadler. “Rather, it should empower them with a range of options that suits their needs and financial circumstances.”

“Some providers are making quite a lot of money out of home care.”

Ian Yates
Ian Yates

Meanwhile, in response to ACCPA’s statement, chief executive of the Council on the Ageing Ian Yates told Community Care Review the national peak strongly supported the government’s power to cap home care fees.

“This is one of the most complained about issues,” said Mr Yates. “Some providers are making quite a lot of money out of home care. Some of it doesn’t look like profit because it’s being reported as admin and stuff like that.”

While Mr Yates agrees “restrictive capping” could hurt providers, he told CCR: “reasonable capping won’t – how could it?”

From 1 July 2024, the Independent Hospital and Aged Care Pricing Authority will inform government decisions relating to home care costs once the delayed Support at Home program is up and running.

“When there are clear, fair and reasonable fees set based on a market analysis – which is what the pricing authority does – it will be hard for people to argue against it,” said Mr Yates.

As for the government giving itself power to cap home care fees, Mr Yates told CCR it’s more likely an interim measure to prevent providers rorting the system.

“The sheer fact that they are going to give themselves that power is going to make a lot of providers rethink.”

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Tags: ACCPA, caps, cota, featured, fees, home care, ian yates, Paul Sadler,

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