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Frequently Asked Questions - The Aged Care Amendment (2008 Measures No. 2) Act 2008 (Updated June 2009)

These questions and answers have been prepared to assist with the changes to the regulatory framework for aged care detailed in the Aged Care Amendment (2008 Measures No. 2) Act 2008.

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Updated June 2009

These questions and answers have been prepared to assist with the changes to the regulatory framework for aged care in the Aged Care Amendment (2008 Measures No. 2) Act 2008 (the Amending Act) and the Approval of Care Recipients Amendment Principles 2008 (No 2).

The answers do not constitute legal advice and people are encouraged to seek their own professional advice about the application of the legislation to their own particular circumstances. The answers provided are in plain English and in cases of discrepancy between these answers and the legislation, the legislation should be relied upon.

A: Summary

Q1. What is the purpose of the changes?

The purpose of the legislation changes is to amend the Aged Care Act 1997 (the Act), the Aged Care Principles 1997 and the Aged Care (Bond Security) Act 2006 (the Bond Security Act) to address current legislative inadequacies and maintain effective regulatory safeguards for ensuring high quality care for older Australians.

When the aged care legislation was developed ten years ago, the typical business model adopted by aged care providers was one whereby the owner of the facilities also operated the aged care facility. The regulatory framework reflected the “cottage” nature of the sector as it then was. In recent years a different model of aged care has emerged, one in which the owner and operator of a facility have distinct roles and responsibilities and may function quite separately. The last decade has also seen a significant increase in the level of investment in the sector from large corporate entities. The regulatory framework had not kept pace with this shift in business practice. This lack of consistency between the regulatory framework and contemporary business practice meant that the regulations had not been able to be applied equally to all approved providers regardless of their corporate structure.

There has also been significant growth in the value of accommodation bonds held by aged care providers. As at 30 June 2008, around 970 approved providers (75% of all approved providers) held accommodation bonds, with a total value of almost $8 billion. It is obviously extremely important in terms of consumer confidence, and to maintain and increase the level of corporate investment into the sector, that the regulatory framework that governs these financial arrangements is as robust and current as possible.

In addition, feedback from the sector clearly reflects a level of dissatisfaction with the complexity and number of assessments required of an individual’s care needs, by Aged Care Assessment Teams. Some reassessments required in the existing process have been identified by the Department as being unnecessary or administrative in nature. The amendments contained in the Amending Act will streamline assessments of frail older people, so as to enable more timely, consistent and quality assessments for aged care.

The amendments have also made some minor, operational changes to improve the administration of the legislation so that it operates more efficiently and effectively.

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Q2. What is the financial impact of the changes?

While there may be some costs to the aged care sector as the result of implementing some of the changes, they are expected to be minimal. Other measures are expected to lead to efficiencies and savings, so that on balance there is likely to be a minimal financial impact.

Transition costs, associated with change to systems, will also impact on Government, but these will be absorbed in the existing budget allocation to the Department. There will be a long transition period (through until 1 July 2009), during which the Government will work closely with approved providers to ensure smooth implementation.

Q3. What consultation has been undertaken on the changes?

The changes have been the subject of consultation with the aged care sector through the Ageing Consultative Committee, which comprises peak industry, professional and consumer bodies. Consultation included preparation of a Consultation Paper and a face-to-face meeting with the Committee in June 2008. As a result of that meeting, the Consultation Paper was revised and provided to the Committee and Aged Care Assessment Program officials for wider distribution to stakeholders. Distribution was at the discretion of the officials and Committee members, but included providers (both charitable and commercial), peak bodies, consumer representatives, consumers, and other interested parties.
Written submissions were received from a range of aged care stakeholders. The Department considered the feedback in the development and fine tuning of the complex legislative and policy reform process, and as a result, did not pursue or amended some of the proposals outlined in the Consultation Paper.
The Department again met with the Ageing Consultative Committee in October to discuss the outcome of the consultation process. The changes contained in the Amending Act are consistent with what was outlined in the in the Consultation Paper and has been discussed with the Committee.

Q4. When do the amendments take effect?

Most of these reforms commence on 1 January 2009, with specified provisions not taking effect until 1 July 2009, allowing for a transition period and the implementation of systems changes.

B. More Detailed Information About The Changes

Q5. How do the changes increase protections for residents?

All of the amendments are ultimately designed to better protect aged care recipients. Some of the specific measures, and their impacts on care recipients, are described below:

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Sanctions

The new arrangements put the intention of the legislation beyond doubt in relation to sanctions imposed on providers who fail to meet their responsibilities in relation to, for example, user rights, quality care standards or accountability requirements. The Aged Care Amendment (2008 Measures No. 2) Act 2008 ensures that the safety, health and well-being of current and future care recipients is the paramount consideration and their interests must be protected ahead of any other interests, such as the financial interests of the approved provider.

Police Checks

Currently, the police check arrangements permit people with convictions for serious offences to work in aged care with access to care recipients, provided they are under supervision. However, it is difficult to monitor approved providers’ compliance with requirements for supervised access. Strengthening of the current police check requirements make it necessary for all employees of aged care facilities aged care staff, with access to care recipients, whether supervised or unsupervised, to have a police check.

Missing persons

The protection of aged care residents has been increased by requiring providers to raise the alarm with the Department of Health and Ageing when a facility has determined that a resident is missing without reason and is sufficiently concerned that it has reported this to the Police. This notification allows the Department to determine whether appropriate action has been taken by the service in respect of the missing resident and whether there are adequate systems and processes in place to ensure other residents’ safety.

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Role of the Aged Care Commissioner

Changes to delegated legislation (the Aged Care Principles) make the Complaints Investigation Scheme more accessible and workable from a practical perspective. The changes include, for example, allowing the Aged Care Commissioner to accept an oral application from persons who are dissatisfied about a decision. This assists residents who may not be able to make a written complaint.

Increased coverage of the Accommodation Bond Guarantee Scheme

Changes ensure that accommodation bonds (or like payments) that have been paid by people for entry into aged care services are fully protected under the Accommodation Bond Guarantee Scheme and that residents in similar circumstances are afforded similar protections.

Q6. How do these changes affect existing approved providers?

One of the significant changes to the legislation is clarifying who is and is not regulated under the Aged Care Act 1997. This has been achieved by linking approval of providers to the allocation of places which is directly linked to Commonwealth funding.

This change will have no impact on existing approved providers with an allocation of places. However, if an existing approved provider does not have an allocation of places for any services, then its approval as a provider will automatically cease from 1 July 2009. If, before this time, the provider acquires places, then it will continue to be an approved provider in respect of the service for which it has received places.

If an existing approved provider has a number of services, some with allocations and some without, it will cease to be an approved provider in respect of the services with no allocations from 1 July 2009, unless it acquires places for the services.

Other changes to the legislation may require approved providers to make small systems or administrative changes. A six month transition period (to end June 2009) will assist in ensuring a smooth transition. The Department will also issue more detailed information to approved providers to assist them in transitioning to the new system.

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Q7. How will the new arrangements work for entities applying for approved provider status?

From 1 January 2009, when an entity successfully applies for approved provider status, it becomes qualified but “approved provider” status will not take effect until the entity has received an allocation of aged care places.

If, at the time an entity is applying for approved provider status, the Secretary considers that the suitability of the applicant is dependent on a particular circumstance (e.g. the ongoing engagement of a particular management company) then the Secretary may impose a condition of allocation that the circumstance (e.g. use of the management company) should not be changed unless the provider has obtained the agreement of the Secretary.

Once qualified, the entity would be required to comply with the obligation to notify the Department of certain changes in its circumstance and the obligation to give information relevant to its suitability to be an approved provider when requested.

Approved provider status would not take effect until such time as the applicant has an allocation of places for a particular service. This may occur either as the result of being awarded an allocation by the Department or as the result of an approved transfer of places from another approved provider. The applicant would automatically convert to an approved provider in respect of that service, when the places (provisional or operational) are acquired.

The approval will only take effect if the applicant receives an allocation of places (in respect of any service) within two years. If an allocation is not received within two years, the entity would be required to re-apply for approved provider status.

When approved provider status takes effect the entity will need to refund the balances of all unregulated lump sums held (i.e. lump sum entry fees taken before they became an approved provider) and can then enter into accommodation bond or accommodation charge agreements with eligible care recipients in accordance with existing rules, provided that there is no disadvantage to the care recipient.

Q8. How will the changes affect former approved providers?

The Aged Care Amendment (2008 Measures No.2) Act 2008 addresses unintended outcomes of the current legislation that did not allow the Guarantee Scheme to protect accommodation bonds refunds owed by an organisation that ceased to be an approved provider. The Amending Act clarifies the that an organisation that loses its approval must refund its accommodation bonds and ensures that from 1 January 2009 accommodation bond refund obligations survive the lapsing or revocation of approved provider status. The Accommodation Bond Guarantee Scheme will also protect residents whose bonds are not refunded in circumstances where the former approved provider becomes insolvent.

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Q9. What changes are being made to the transfer of places?

The Aged Care Amendment (2008 Measures No.2) Act 2008 amends the Aged Care Act to enable the transfer of provisionally allocated places in exceptional circumstances. The amendments provide that in deciding whether to approve a transfer, the Secretary to the Department of Health and Ageing must consider, among other things, whether:

a) the transferor has made significant progress towards being in a position to provide care, in respect of the places;
b) whether it would be contrary to the interests of the aged community in the region not to permit the transfer; and
c) whether the transferee is likely to be in a position to provide care in respect of the places within a short time after the transfer.

This change allows a transfer in cases where the provider has expended significant resources (time and funds) gaining the relevant planning approvals for the service and has progressed development to a point where significant delays in the provision of care would occur if the development of the aged care service was not completed as quickly as possible. If the provider could not continue the development, the places could be transferred to another provider that could ensure completion, but only at the location in respect of which the places were allocated.

The major advantage for all concerned is that this provides practical support for the goal of making provisional allocations operational in the shortest possible time. If the transfer of provisionally allocated places is in the interests of the community in order to enable operational beds to come “on-line” more quickly, then this amendment enables this to occur.

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Q10. How do I know if I fall under the new definition of ‘key personnel’?

The new provision makes it clear that all directors (in the case of bodies corporate) and members of the governing body (in the case of entities that are not bodies corporate) are key personnel.

Under the new arrangements, providers will need to identify those ‘pulling the financial or managerial strings,’ as the approved provider is in the best position to identify those persons. Only those who should be accountable will need to be notified to the Department. Approved providers will need to:

• Identify the people within or outside their direct approved provider organisation that have authority, responsibility for, or significant influence over the activities of the provider (including the management or financial arrangements of the service).

This amendment will not inadvertently capture people who should not be notified to the Department (including, for example, religious leaders), unless they are actively involved in making financial or managerial decisions which affect the executive decisions of the aged care service.

A prescriptive approach (whereby individual positions within an organisation would be named in the legislation) was not considered practical for this measure, given the complexity and diversity of some of the modern organisational structures and roles within aged care.

Q11. What will the Department do after it has been notified that a resident is missing?

The Department’s response to the notification will check with the approved provider whether there is an ongoing risk to residents. For example, further action would not be taken where a ‘missing’ resident turns up, having spent a day with family or friends without having previously advised the provider using available mechanisms. Whereas, if a resident is reported as ‘missing’ without reasonable explanation and it is considered that the approved provider did not have adequate systems and processes in place to prevent the absence, then an investigation would ensue and compliance action may be considered.

The purpose of the notification is to enable the Department to determine whether appropriate action has been taken by the service provider in respect of the missing resident and whether there are adequate systems and processes in place to ensure other residents’ safety.

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C. Amendments Relating To Assessments By Aged Care Assessment Teams (Acats)

Q12. When do the ACAT amendments take effect?

See table below.

Q13. What are the changes related to the assessment of frail older people?

The specific changes related the Aged Care Assessment Teams (ACAT) operational practices under the Aged Care Assessment Program are:

There are changes to the lapsing of some approvals as follows:

Care not received From 1 July 2009 all current approvals for the following care types will not lapse if a person has not received the type of care:

• Residential respite care (high and low level)
• High level residential care
• Extended Aged Care at Home (EACH)
• EACH Dementia (EACH D) Package

Top of page This means all approvals made for these care types on or after 1 July 2008 - and which were not time limited so that they expired before 1 July 2009 - will not lapse.

Approvals will continue to lapse for Community Aged Care Packages (CACPs) if a person is not provided with community care within 12 months starting on the day after the approval is given.

Approvals will also continue to lapse for low level residential care if a person is not provided with the care within 12 months starting on the day after the approval is given.

Approvals will also continue to lapse for transition care if a person is not provided with the care within 4 weeks beginning on the day after approval.

Break in care From 1 January 2009 all current approvals for people who have received high level residential care or residential respite care (high and low level) will not lapse irrespective of when the approval was made and even if there is a break in care. This was already the case from 20 March 2008 for CACP, EACH and EACH D.

Approvals will continue to lapse for low level residential care if a person has commenced receiving care, and there is a break in care lasting more than 28 days which occurs after the lapsing period of 12 months (beginning on the day after approval) ends.

Approvals will also continue to lapse for transition care if a person has commenced receiving care, and there is a break in care of at least one day after the lapsing period of four weeks (beginning on the day after approval) ends.

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There are changes to eligibility for approvals for EACH D or EACH Packageas follows:

From 1 January 2009 if a person is eligible to receive an:

• EACH D Package – the person is also eligible for an EACH Package or a Community Aged Care Package (CACP) as an alternative to an EACH D Package
• EACH Package – the person is also eligible for a CACP as an alternative to an EACH Package

However, an older person should be re-assessed at any time if their care needs change.

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Q14. Why were the ACAT legislation changes introduced?

These amendments address two issues:

• To make the Aged Care Assessment process significantly more efficient and lead to a reduction in assessment waiting times. This improvement in the efficiency of the Aged Care Assessment Teams (ACAT) will help ensure reassessments are conducted only for the people who genuinely need them.
• To improve the equity of access for some forms of flexible care by allowing a person to access care at a lower level in the community.

Q15. How do I know if a person has a current ACAT approval?

The onus is on the service provider to establish if a person has valid approval. If you would like to seek further advice on the care recipient’s current approval, you can check via ‘Online Claiming’ or contact Medicare Australia on 1800 195 206.

Q16. Should a client put their name down with an Aged Care Assessment Team for a re-assessment after 1 July 2009?

A client should only be reassessed if there is a significant change in their care needs or their approval for low level residential care, a Community Aged Care Package (CACP) or Transition Care has lapsed. As noted in the table above, after 1 July 2009 all current approvals for other types of aged care will not lapse.

Q17. Why are low level ACAT approvals continuing to lapse?

Low level approvals will continue to lapse after 12 months if no care has been provided, to ensure that a person’s approval will meet their current care need.

Q18. Where can I get more information about the changes to the regulatory framework for aged care?

The Department of Health and Ageing has developed a detailed implementation Guide (including an addendum to update information), which will be posted on the Department of Health and Ageing website.

If you have any further queries regarding these changes, please contact the Aged Care Information Line on 1800 500 853.
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