Changes to reduce administration and management charges
The Australian Government is committed to reducing excessive administration and management charges in the HCP Program. This ensures that more funds are available to meet the needs of care recipients.
From 1 January 2023:
- care management prices will be capped at 20% of the package level
- package management prices will be capped at 15% of the package level
- providers cannot charge for package management in a calendar month where no services (other than care management) are delivered, except for the first month of care
- providers cannot charge separately for third-party services
- providers cannot charge exit amounts.
The caps set the maximum amount a provider can charge. They are not the target price for these services or an indicator of what is considered a ‘reasonable’ price.
The Government will consider the need for additional or lower caps as we monitor prices across the HCP sector in 2023. Monitoring will focus on identifying:
- increases in charges for care and package management that might indicate providers moving to the cap
- increases in charges for direct care services that might indicate cost-shifting
- where published prices do not comply with the new legislative requirements.
Additionally, to support providers in setting their prices, the Government is clarifying that care management is a mandatory support service. See care management for further information.
How you can prepare
By 1 January 2023, providers must:
- ensure charges are below the legislated caps for care and package management
- stop charging separately for exit amounts and third-party services
- update prices on My Aged Care, and all documentation to reflect any changes including:
- pricing schedule
- full price list
- home care agreements
- individualised budgets
- monthly statements.
From 1 January 2023, providers:
- should consider adjustments to their cost models if required to maintain viability
- must ensure they are delivering quality care and package management to all care recipients in line with legislative definitions and requirements.
Providers can simply notify the care recipient rather than seeking mutual consent where they are just seeking to inform them of:
- decreases to prices for care and package management
- removal of separate third-party services and exit charges.
In this instance providers should:
- provide 14 days’ notice prior to changes occurring so that care recipients can discuss these changes with their provider
- include details of why this change is occurring
- add a file note to the home care agreement reflecting the notice provided and any discussion with the care recipient
- update the home care agreement with revised charges in the next update.
In line with existing consumer directed care requirements, providers must ensure all other changes (including any increases in any prices in response to these changes) are:
- discussed and mutually agreed with care recipients
- documented in the home care agreement before providers start charging the new rates.
All prices and price increases must be reasonable and justifiable.
For more information on updating the home care agreement, including what to do if a care recipient does not agree to the changes, see Home care agreements for Home Care Packages.
We have developed a fact sheet that you can share with your care recipients and their families. You can use this document to support your conversations when explaining the changes.
Home care service providers who are at risk of financial stress can apply for free, independent, confidential advice to:
- help review operations
- gain advice on business management and financial strategies.
This includes those operating in rural and remote locations and smaller providers.
Visit Business Advisory Services for more information.
Contact us if you have any general enquiries about aged care.