Capping Home Care Package Administration and Management Charges – 1 December 2022

[Opening visual of slide with text saying ‘Australian Government with Crest (logo)’, ‘Department of Health and Aged Care’, ‘Home Care Packages Program Pricing Update’, ‘Presenter – Rachel Frost’, ‘agedcareengagement.health.gov.au’, ‘1 December 2022’]

[The visuals during this webinar are of Rachel Frost presenting via video, with reference to the content of a PowerPoint presentation being played on screen]

Rachel Frost:

Good afternoon everyone. Thank you for joining us. We’ll just wait a few more minutes for participants to join.

All right. I might kick off now. I think we’ve got about 575 participants online at the moment. Thank you so much for joining us today. For many of you who probably don’t know me I’m Rachel Frost and I’m the Director of the Home Care Policy Team in the Department of Health and Aged Care. And with me today from the Department is Julia Atkinson who is currently the Acting Assistant Secretary of the Home Care Assessments Branch and also from my team Cin Peeler, Joe Ng and Ben Beckadin who will be helping me today and also doing some of the webinar as well a bit later on.

So as you all know the Government recently announced action to implement their election commitment to cap administration management charges in the Home Care Packages Program. So I hope today we can help you to understand these changes and why we’re making them.

But just some general housekeeping before we kick off. All participants will be muted throughout the webinar. If you have questions please submit them through the Q&A function. These questions will not be public but my team will be able to see them and will be looking at them throughout the webinar.

We are recording the webinar and we’ll publish it within the next week or so on the health.gov.au website.

So before we kick in to the content I’d just like to acknowledge the traditional owners and custodians of the lands on which we meet today and pay my respects to Elders past, present and emerging. In Canberra this is the Ngunnawal and the Ngambri people. We wish to acknowledge and respect their continuing culture and the contribution they make to the life of this city and this region. I’d like to extend that acknowledgment and respect to any Aboriginal and Torres Strait Islander people within the Home Care Program and those here today from all the lands that we are meeting on.

So what we’ll be covering today. I’ll provide an overview of the changes and what they mean for providers and then go through each of the changes in more detail. So Joe from my team will then walk you through some example scenarios which will help you sort of understand how to implement those changes on the ground.

We’ll be monitoring the questions submitted and we’ll have a session at the end where we answer some of the common questions we’ve received. We will also publish a list of the common questions. So we’re not going to get to all of them probably at the end of the session. We’ll publish a list of common questions and their answers in the coming weeks. So you’ll be able to review those and review the webinar.

So why was change needed? As you’re aware the commitment to cap administration and management charges was an election commitment of the current Government. Evidence to the Royal Commission heard that in some cases up to 50% of home care subsidy was being used for administration and management costs. And a key factor driving the need for change is the high level of complaints that we receive related to home care fees and charges from care recipients. And this is across a broad range of channels. So it includes Ministerial correspondence we get, complaints dealt with by the Aged Care Quality and Safety Commission, and also the feedback that we’ve heard from both OPAN and COTA who regularly receive complaints about provider pricing, particularly high administration management charges.

The Department recently conducted a program assurance review focused on administration and management charges. So it found there was considerable variation in pricing and significant pricing transparency issues. They found that value for money is not always evident and charges are often not justified. Third party charges was a particular area of concern with high charges for little to no service in some circumstances. Some providers were incorrectly charging business costs in package management rather than as a component of direct service charges.

We also analysed program pricing data and that also fed into our understanding of the problem. We found that there was little to no difference between median prices when we looked at factors such as location or provider size or the proportion of Indigenous clients or clients from a culturally diverse background. So any argument that high costs were needed for particular cohorts or in certain locations was debunked.

The Department commenced consultation on an approach to cap them in July this year. Both the National Aged Care Advisory Council and the Council of Elders provided formal advice to Government. We also conducted a survey in August this year which provided feedback from 928 providers, 341 informal carers and 273 care recipients. So if you were one of those 928 providers thank you very much for taking the time to do that survey and that really helped us.

The Department met on numerous occasions with peak bodies to discuss the options including the level of caps and we thank them for their ongoing engagement on these reforms.

So what did the consultation tell us?

At a high level the consultations demonstrated that over 75% of care recipients think even the median charges for care and package management are too high and that administrative charges are not value for money.

More than half of care recipients and their carers and families surveyed said they did not know why they were charged for care or package management. We also found significant confusion about additional third party charges. This can lead to tension about fees and charges and we hear that from providers. We hope we can improve care recipients’ understanding about fees and charges and reduce some of that tension that we know that occurs.

Consumer peaks urged us to manage price changes holistically so that providers could not just shift costs which could lead to reduced benefits. They were also concerned that providers could reduce the quantity or quality of services delivered as a way of dealing with these caps on administration management charges. Both care recipients and providers commented on the need to more easily compare providers noting that additional third party charges often made it difficult to compare.

Providers made it clear they did not support major IT changes that were not aligned with future home care reforms. Many providers noted that they need to retain some flexibility to adjust charges to reflect increases in their costs.

A range of stakeholders advised against going too hard on caps without a bottom up pricing study to inform where prices should be set.

Based on the survey data the overwhelming majority of respondents to our survey indicated that they were comfortable and agreed with the level that we have set the caps and that that level was appropriate. They also wanted more guidance material and education to the sector to improve understanding of pricing.

We really appreciated and considered the feedback we received and the comments made by the sector and care recipients and their families. I’m just sharing with you a few of those comments that we received from providers.

And also some key survey responses and quotes from consumers.

We considered all the feedback and made recommendations to Government on how to cap administration management charges in the program. And where did we land? What decision did Government make? So the Government announced their approach earlier this month. From 1 January 2023 care management will be capped at 20% of the package level. Package management will be capped at 15% of the package level. Providers cannot charge for package management in a calendar month when no services other than care management are delivered except for the first month of care. We realised that in that first month it often takes a bit of time to get those services established.

As you all already know exit amounts can no longer be charged when a care recipient moves provider or leaves the program.

And third party service charges which includes charges such as sub-contracting, brokering, handling charges, just be all-inclusive and not be charged separately. In many cases we consider that these charges are already covered by existing care and package management charges. In some cases there may be justification for price adjustments but this really depends on your pricing model and we will talk more about that later.

I have a few important points to make about the caps and where we’ve set them. These caps set the maximum amount a provider can charge. Most providers currently charge less than the caps and we do not want to see providers increasing prices up to the caps.

These graphs I’m showing you now demonstrate the pricing distribution for care and package management by level in August 2022.

As you can see from the diagram on the top right of the slide the middle line of each of those boxes represents where the median sits and the right hand side of the box and that line represents where 75% of prices sit.

The stars here illustrate where we have set the caps. So you can see that the caps are clearly above the 75th percentile. So our focus and the impact is really on removing the most excessive or egregious charges. And you can see it does differ a little bit by level. In some cases we’re well above that box in the median and in some cases we’re closer depending on the level.

The caps are not what we consider to be a fair or reasonable price. Setting the caps at the right level was a balancing act. Our aim was to target the highest charges to make sure care recipients have more funds for direct care and services but at the same time ensuring providers can cover their costs and continue to deliver the quality and safe care and services we all expect and want to deliver for our care recipients.

The changes to the Aged Care Act come into effect 1 January 2023 and changes to the subordinate legislation will be registered shortly and will also commence on 1 January.

The Government will consider the need for further action on administration and management charges as we monitor prices in 2023. So monitoring will focus on identifying providers who charge over the caps, who charge separately for third party services, who charge exit amounts or have raised prices unreasonably. And I’ll talk a little bit more about the compliance and monitoring later.

So what do providers need to do?

So firstly I want to acknowledge that timeframes are very tight and this is not the ideal time of year to implement these changes. We’ve heard and recognise that the substantial reform agenda for aged care has placed and continues to place a significant burden on the sector. We’ve had strong feedback from APRA on the timing but we’re pushing ahead with the 1 January date announced by the Minister and we ask for your support.

I want you to know the Department is here to support you through the changes and the changes to come. We’ve listened to you and we’ve worked with peaks to try and get the balance right and obviously as you all know it’s a Government decision about the policy where we’ve landed. But we have developed guidance for providers and communications for care recipients that you can share with them to help them better understand how administration and management charges are a necessary and needed use of package funds. The balance is it’s then up to you to be able to make sure you can demonstrate you’re delivering value for money for the prices that you charge.

So just recapping on that slide. So by 1 January ’23 you need to ensure your prices are below the caps, stop charging for exit amounts, stop charging separately for third party services, communicate these changes to care recipients and update My Aged Care. If needed – and it does not need to be done by 1 January – adjusting your cost models, ensuring you’ve got the evidence to support any increase in prices, and agreeing any of those changes or increasing to pricing with your care recipients and documenting those in agreements.

One change that we have made that might make implementation easier is that if you are just reducing or eliminating charges to make the 1 January deadline you can simply notify the care recipient rather than seeking mutual consent. Where possible try to give 14 days’ notice and let the care recipients know why the change is occurring. You can use the fact sheet for care recipients that we’ve developed that’s on our website to explain the changes to the care recipient.

As I said we acknowledge some providers may need to adjust their cost models and increase some prices. This may be the case for example where providers have relied on significant revenue from third party charges but have kept direct care charges very low.

Any increases in prices or other changes to the home care agreement must be discussed and mutually agreed with care recipients and documented in the agreement prior to charging those new rates. Make sure you have the evidence to support any increase in prices and that you can justify those increases to your care recipients.

Providers may also add a file note to the home care agreement reflecting the agreed changes and any discussion with a care recipient. In that case you must then update the agreement with the next update that you were scheduled to do.

All providers must ensure that they continue to deliver quality care and package management to all care recipients in line with the legislative definitions and requirements.

I’m now going to talk a little bit more about care management.

So care management is a mandatory support service. All providers have responsibilities under the legislation to all of their care recipients including those who self-manage. We’ve updated the definition of care management to make these responsibilities clear. Providers must regularly assess the needs, goals and preferences of care recipients and review their home care agreements and care plans, ensure their care and services align with other supports they may be receiving and partner with care recipients and their family or carers about their care.

Of course ensuring their care and services are culturally safe and identifying and addressing any risk to their safety, health and wellbeing.

While care management is mandatory we recognise that everyone has different needs and goals and providers should deliver care management flexibly and may find the services more or less intensive as the care recipient’s needs or preferences change.

As I said before providers still have a responsibility to provide care management to self-managed care recipients. This does not mean that these care recipients require or should be charged for full service care management. In many cases existing arrangements can and will remain. But what we want to make very clear is that providers must be able to demonstrate that they have met the mandatory requirements for care management for all of their clients and we are concerned that some providers aren’t currently doing that.

Package management is a service that supports the delivery of a home care package. This service includes activities such as establishing and managing home care budgets, coordinating services such as scheduling services and arranging respite care, as well as preparing invoices and monthly statements.

Conducting quality improvement compliance and assurance activities also falls under package management. What package management does not include is business overheads or costs, general administration and communication or marketing costs. These costs need to be built into the direct care costs under the program.

So let’s talk about charging for care and package management. The caps on care and package management at 20% and 15% respectively will increase with changes to the basic subsidy. The cap is a maximum and not an indicator of what the Government considers to be an appropriate charge. As I said before these caps are just about removing the most excessive charges.

Apologies for that.

Providers must ensure that the prices they set are reasonable and justifiable. This means that you must provide value for money and reflect the resources it takes to provide the care or service at each level and be clear, understandable and transparent. Care recipients really want to be part of the conversation. They want to understand pricing. They want to understand why you charge what you charge for each service at any time and the reason for any changes.

So what do you need to make sure you don’t do? So you can’t charge care or package management as an hourly charge or as an additional hourly charge on top of the base care or package management charge. You can’t charge separately for any business related administration costs such as business insurance, general training of staff or rent. These must be included in the unit price for direct care and services.

Providers must be careful not to double charge. And we have seen this in the program. For example charging for invoicing as part of package management where it’s a recognised part of that service but then also adding an invoice charge to service costs. This is why it’s very important that you have documentation to support your cost model. And as I mentioned before with the program assurance review we did find that many providers did not have that justification and that evidence for their cost model.

It's also illegal for businesses to agree prices among themselves or engage in other anti‑competitive pricing behaviour.

So as we’ve talked about care management is a mandatory service. So you can no longer charge a zero dollar amount for care management.

Whereas for package management you can do so but if you do you must explain to your care recipients how you deliver this service and where you cover those costs.

In most cases you should charge your published price for a service so care recipients can better understand and compare prices. We understand in some cases you may need to negotiate a different price such as where the care recipient has a particular request or need for a particular service. In these cases you must negotiate and agree the price with the care recipient and outline the difference in price and why it is different in the home care agreement and package budget.

I’d now like to talk a little bit more about third party services. So third party services are sometimes referred to as subcontracting, brokerage or handling charges. And our research has found that providers have very different models for how they charge these fees and whether they’re charged at all and what they’re called.

They can include where you source and coordinate care and services through a third party including subcontractors, labour hire or brokered services and where you might purchase goods, equipment or assistive technology from a third party.

Sometimes these charges are part of the provider’s business model or they can be at the request of a specific care recipient who wants a particular worker or service provider. Sometimes these charges are a one off and in other cases they are charged whenever a service is delivered.

If a third party is engaged it’s important to remember that you as the approved provider are responsible to oversee these services including ensuring the quality of care, resolving issues or complaints, monitoring the care recipient outcomes, checking the key personnel are actually suitable to do the job and confirming the services meet all aged care legislative requirements.

So where a care recipient requests a specific third party service provider you have to balance your ongoing accountability for what you spend a package budget on and providing quality of care and also the care recipient’s right to choose the type of service they need and how you provide these.

So we know that some providers publish their prices for third party services and equipment and then charge a separate administrative charge on top of the cost of the third party price. From 1 January 2023 you must set, publish and charge an all-inclusive price for all third party services. This means you can no longer charge a separate amount to cover administrative costs related to use of third party services. You must ensure third party arrangements and prices are discussed with care recipients, documented and agreed in home care agreements and you must publish all‑inclusive prices in the monthly statements. Prices must be reasonable and justifiable. This means there must be value for money and must consider the effort and resources it takes to coordinate them.

We have seen some examples of very high charges and prices for these brokerage and handling costs.

It is expected that most if not all additional costs to an approved provider related to third party services will be recouped through care and package management charges. The all-inclusive price for the actual product or service would then include the actual cost and any business overheads and costs that cannot be charged in care and package management. The Department will not dictate how you do this, for example adding a percentage to a direct service charge, but your approach must be reasonable and justifiable. The Department’s website provides more detailed guidance on charging for third party services.

And finally exit amounts. From 1 January you cannot charge an exit amount to care recipients who leave your care even if the care recipient previously agreed. This aligns with the improved payment arrangements changes which changed the way providers could charge for exiting.

If a person exits your service you must return any remaining unspent funds you hold to the Commonwealth and advise Services Australia through the Aged Care Online claiming. If a person leaves your care before 1 January 2023 you can charge an agreed exit amount as per current arrangements even if you’re finalising their account after 1 January 2023. Activities related to care recipients exiting or moving to a new provider such as transferring documents may be covered under package management or care management where reasonable and appropriate.

To illustrate how these changes work in practice I’m going to hand you over to Joe who will step you through some example scenarios. Thank you Joe.

Joe Ng:

Thank you Rachel. To better explain these changes I’ll take you through three example scenarios that step you through some of the changes that must occur before 1st of January 2023. Let’s start with Mary. Mary is currently on a level one package. Her package costs include $75 per fortnight for care management which is above the cap, $40 fortnightly package management charges which is below the cap. Mary is also charged a separate subcontracting amount for gardening services from Green’s Mowing, a preferred gardener, on top of the gardening charge. Gardening is charged at $57 per hour plus a $7 subcontracting charge, not all-inclusive and possibly unreasonable.

The provider must adjust their pricing in line with legislation including reducing care management to below the cap, reasonably adjust prices where necessary and making third party prices all‑inclusive.

So in terms of reaching agreement, before the 1st of January 2023 Mary’s provider must propose new prices to Mary. The prices that they propose are a $5 reduction per fortnight for care management which is now below the cap, a $5 increase per fortnight for package management which is also below the cap, and also a $60 per hour for gardening charge which is all‑inclusive of the charges. The provider meets with Mary to explain the new prices and clarify that they have one, moved scheduled services from care management to package management as this is an administrative task. They also explain that they’ve covered the invoicing processing cost for Green’s Mowing in her existing package management charge and also have combined the service price for Green’s Mowing and reasonable business costs to make one price.

Mary is welcome to ask any questions and negotiate the price. In this case Mary agrees to the price changes as they seem sensible to her and reasonable. In terms of documenting the plan the provider will update Mary’s documentation to include the detail of the agreed changes in the home care agreement which includes the pricing schedule and individualised budgets as well as the monthly statement. Mary reviews the agreement and signs the home care agreement. The provider will need to discuss, agree and document these changes with all their care recipients. The provider will also need to update the My Aged Care content which includes their pricing schedule and full price list in the provider portal. In addition they will also have to update their own organisation’s website for consistency.

Let’s go to our next example which is all about reasonable charges for third party services starring Henry. So Henry has been assessed as needing a toilet aid from a specialised third party company and has been quoted $1,550 for the item. Henry and his son thoroughly researched the product and request a quote and coordinate with the company shipping and delivery. Henry’s provider has used this company for other care recipients so had established that they are suitable to provide this aid. As this provider is responsible for how his package funds are spent Henry has asked his provider whether they agree with the quote and if they can process the invoice from the company.

Henry’s provider charges 10% on top of each invoice with a cap of $300 per invoice. This means on top of the $1,550 item his provider will charge him an extra $155. While Henry had agreed to the charge when he signed his home care agreement he’s not sure it’s reasonable based on the effort that’s been involved.

From the 1st of January 2023 the Department and the Commission will begin regulating providers in this space. The Department expects that most if not all additional costs associated with delivering third party goods and services will be recouped through the care and package management charges. However you can incorporate business costs to your direct service charges for the price of goods and assistive equipment if the recipient has requested a third party organisation to deliver the service or item.

So in this example the extra $155 doesn’t seem reasonable and Henry would be in his right to re‑negotiate the price. Henry’s provider must explain how their prices are value for money and reflect the resources it takes to provide the care or service, clear, understandable and transparent, and how they’re in Henry’s best interests and how the prices are in line with program requirements and legislation and directly relates to the coordination allowable care for services who are purchasing goods to meet Henry’s assessed care needs and goals. Third party charges must also be all-inclusive and agreed and documented in the home care agreement ideally before this purchase.

Let’s move to our last example with Margaret. This example is all about increasing pricing transparency for third party services. Margaret is looking for a new provider and wants to compare local provider prices. She looks at two services, one from Professional Home Care Services and they publish a price for cleaning and household tasks for $60 per hour. Another provider, Esteemed Services Inc publishes their prices at $45 per hour. Margaret assumes that she’s getting a better deal from Esteemed Services Inc and signs up to receive their services.

There’s a lot of fine print in her agreement and her provider does not explain the policies for third party services. Once Margaret receives services she realises that Esteemed Services Inc charges $45 per hour for cleaning but they also subcontract these services to a third party and adds $15 on to the price to cover the cost of subcontracting each time they deliver the service. As such both providers charge the same amount for cleaning but the care recipient couldn’t tell this from the published prices.

So from 1st of January Esteemed Service Inc must publish their all-inclusive price and must also consider if some or all of the additional subcontracting charges would better fit in package management or care management.

So those are the three examples that we have today. If you have any questions on these examples please enter them into the Q&A and we’ll answer the most common ones at the end of the webinar. I’ll now hand back to Rachel.

Rachel Frost:

Thank you Joe. That was great I think for everyone to see some real worked examples there. And those examples are taken from obviously some of the behaviour and things that we’ve seen in the actual program.

So I’d like to talk a little bit about what we see as the benefits of these measures.

So the primary objective here is to reduce excessive charges for care and package management. The caps that have been set will force providers who are above those caps to reduce their charges for one or more of their key services. The cap for care management will reduce charges for about 16% of care recipients and impact about 25% of providers. The cap for package management will reduce charges for about 12% of care recipients and impact about 19% of providers. We found that 69 providers would be impacted by both caps.

This measure will also increase transparency of provider pricing. Stopping exit charges and separate prices for using third party services will mean less hidden charges. Care recipients and their families will better understand what is being charged and why and care recipients and their families will be able to better compare provider prices including by using their finding a provider tools we have on My Aged Care. Greater transparency of pricing also provides a fairer playing field for providers. And this was some feedback that we got from providers during our consultations.

This measure also helps care recipients know what to expect from their providers. We are making it clear what services people should be receiving as part of care management. We are reinforcing that all care recipients require some care management but it needs to be delivered flexibly to account for different needs.

We’ve also developed guidance to support you to do the right thing and comply with both the legislation and Departmental policies. You need to work in partnership with care recipients to ensure their package budget is used appropriately and transparently. Care recipients should be actively involved in deciding how their package funds are spent and providers should support this. We have additional guidance online to support providers to understand these reforms and their general obligations when it comes to pricing services.

We will closely monitor prices published by providers to ensure they comply, not moving their prices to the caps and not being unreasonable in shifting costs.

Another aspect of this work is about improving the pricing data. Less hidden charges means we can get a better understanding of what providers are charging. This is really important. Data helps us understand how the program is operating and to inform whether we need further measures to support reasonable and transparent pricing in the program. It also informs future home care programs.

So just a recap on what providers need to do.

So some of you may be wondering what you do if the care recipient doesn’t agree with the changes to the home care agreement. Providers must make clear their reasons for lifting prices for example if they are integrating their subcontracting charge into a service fee they must make that clear and help care recipients understand that. Providers must discuss pricing and any proposed changes to pricing with the care recipients and seek mutual agreement before updating home care agreements and charging new prices. Providers may add a file note to the home care agreement reflecting the agreed changes and any discussion with the care recipient and then you would update the home care agreement with revised changes in the next update.

If the care recipient doesn’t agree to changes you may try to negotiate the price with the care recipient to reach agreement. They may seek independent advice such as consumer advocates, family members or legal advice. They may choose to change providers and My Aged Care obviously supports them with tools to compare prices. Price changes can only occur if the care recipient agrees in terms of increases and they don’t have to. But you must continue to provide care under the current agreement.

So as I’ve said a number of times now the Department will be monitoring the data for the program. We’ll be looking at increases in charges for care and package management that might indicate providers moving to the cap. We’re going to be looking at increases in charges. And just talking there, we’re talking about percentages. So we’re looking at people moving beyond that 20% and that 15% or moving up to the that 20% and 15%. Increases in charges for direct care services is also going to be a focus and we’re looking at indications of cost shifting. Again looking at the trend data is going to be important but we’ll also then be identifying from our data analysis specific providers and looking further into those cases where we identify changes in costing that might need further investigation.

We’ll also be looking at where published prices do not comply with the new legislative requirements. As I’ve said if necessary we’ll contact providers where required to get a better understanding of what’s happening with your cost model.

We’ll also look at the need for additional or lower caps as we monitor those prices across the sector in 2023.

Again if there is a significant move across the sector to those caps that’s going to be a flag that would definitely be a trigger looking at those caps and reducing those caps. As required we may update guidance and communications material that we feel we need to to clarify any aspects of the changes further. And obviously the feedback that we’re getting from you in this webinar and that we get from the peaks will help us make sure we get that guidance right and we’ve answered all the question that you have.

After 1 January 2023 the Aged Care Quality and Safety Commission will also commence compliance as part of their regular routine compliance that they currently undertake. So as usual they take a risk-based and proportionate approach and a key focus initially will be on the care and package management charges being below those caps. More information about the approach to compliance and monitoring will be coming out shortly.

So more information about the changes including setting prices, charging prices as well as managing packages can be found on health.gov.au. We have updated all of the pricing guidance there and hopefully that’s a useful resource for you. We’ve made some minor updates to the My Aged Care website and we’ll be updating care recipients on these changes at a broader support at home webinar which is on the 7th of December next week. So Julia Atkinson the Acting Assistant Secretary for our branch will be presenting to care recipients at that webinar.

[Visual of slide with text saying ‘More information’, ‘Updated guidance’, ‘www.health.gov.au’, ‘www.myagedcare.gov.au’, ‘Business Advisory Services’, ‘1800 290 688’, ‘agedcareadvisory@au.pwc.com’, ‘Enquiries’, ‘agedcareenquiries@health.gov.au’]

We’ve also developed a fact sheet for care recipients that providers can print out and share with their care recipients about these changes. You can get the fact sheet from the health.gov.au website and it was also linked from the newsletter piece on the 17th of November.

We’re also as many of you will be aware updating the provider manual and we’ve incorporated the changes that reflect the capping measure in that manual and we hope to have that out shortly.

So there is also support for providers available through the Business Advisory Services. Home care service providers who are at risk of financial stress can apply for free, independent, confidential advice to help review their operations or gain advice on business management and financial strategies particularly for those operating in rural and remote locations and smaller providers. So again go to health.gov.au and search for Business Advisory Services.

As I said to you we’ll be putting out the FAQs following this webinar in the coming week but if there are general questions or enquiries you have please use the Aged Care Enquiries email address and those questions will filter down and we’ll attempt to answer them.

Now we’re ready for some FAQs. So we’ll run through some questions that you’ve submitted today and also some of those questions from when you were registering for the webinar. Please feel free to add more questions into the Q&A function if you think we’ve missed anything. Don’t worry. As I said we’ve only got time for a few questions today but if we don’t get to your question when we publish this recorded webinar we’ll also publish Q&As or FAQs and as many as we’re able to within a reasonable timeframe. We know it’s more important to get it out quickly so we’ll be picking initially the most common questions that we’re getting that need clarification.

So I’m going to throw now to Joe who presented before and also Cin Peeler from my team who are going to tackle some of those questions that we’ve received. So thank you Cin and Joe.

Joe Ng:

Thanks Rachel. All right Cin. So we’ve got our first question here from one of the providers asking:

Q:        Why can’t I charge for package management when a care recipient receives no services except for care management?

Cin Peeler:

Yeah. So this requirement kicks in when you don’t deliver any direct care services or purchase any goods for a care recipient in a month. So I did see there were a few people asking if you had purchased an item did that count as delivering a service, and it does. So for example in January if your care recipient has decided to spend a bit longer staying with their family member after the Christmas period and so they don’t receive any services except for care management in the entire month of January, you cannot charge package management for that month. But it can resume in March if they’re back partway through March.

On this we haven’t changed the requirements for when a care recipient suspends their package though. So those requirements have stayed the same.

Thanks Joe.

Joe Ng:

Thanks Cin. I’ve got another web question here.

Q:        How do these changes affect regional and remote providers?

Cin Peeler:

Thanks Joe. So there are no special provisions for regional and remote providers. A care recipient in regional and remote Australia can be charged the same maximum amount for care and package management as someone in a big city.

As Rachel said earlier we did a lot of analysis of what people were charging and most providers do sit under the cap whether they’re in regional and remote Australia or in metro Australia.

The higher caps that we’ve introduced should give providers who have genuinely higher costs such as those who operate in regional and remote Australia some space to deliver care and package management effectively and still remain below the caps.

For those providers who have care recipients in regional and remote Australia you will know that your care recipients have access to the viability supplement which recognises that sometimes services can cost more in these areas. The viability supplement just provides them with a little bit more money so that if you do charge a slightly higher amount for care and package management there will still be enough money in their package to deliver care and services.

I did just want to add to this one as well. Had a few questions about whether the 20%, 15% cap includes the viability supplement. It doesn’t include any supplements. It is based on the basic subsidy before income tested care fee is applied. So if you go to our website you will see the actual dollar figure that is the maximum amount that you can charge for care and package management and that is a bit clearer for a lot of people than trying to calculate the 20% or 15% themselves.

And I also just want to note if there are any providers who are risk of financial stress, so Rachel did talk about Business Advisory Services. Any home care provider can apply for these services. It’s free, independent and confidential advice to help review your operations or gain advice on business management and financial strategies. If you search for Business Advisory Services on the health.gov.au website it will take you to the right page there. Thanks Joe.

Joe Ng:

Thanks Cin. Those are really good points to raise. Another question here.

Q:        I received a program assurance report with recommended actions that are now in conflict with the advice that you’re giving. What can I do?

Cin Peeler:

So this one’s pretty short. [0:47:45] at the time of the review. If you feel that those actions no longer apply due to the new legislation you can email the compliance officers in the program assurance team. The email address there is hcpprogramassurancecompliance@health.gov.au. And they’ll be able to talk to you one on one about your particular situation. Thanks.

Joe Ng:

Thanks Cin. Here’s another question.

Q:        Can I add X percentage on to the price of a service or good delivered by a third party?

Cin Peeler:

So we do get this question a lot. So we can’t advise whether you should add a given set percentage on to any service price or the cost of a good. Whatever price you charge must be reasonable.

And as we said before most if not all additional costs for delivering a service through a third party or purchasing a good through a third party would be recouped through care and package management.

However you can include your business costs. So for example if your care recipient self‑manages and uses a platform such as Mable which we know is quite a common thing that happens, you can agree a price with your care recipient that is higher than the amount that Mable charges. And so you can cover your business costs.

Costs for things such as processing invoices, vetting the service provider and scheduling or coordinating services should be incorporated into your care and package management charges. Thanks.

Joe Ng:

Good response. Thanks Cin. I think we’ve got time for one more.

Q:        How can I implement these changes in time?

Quite a good question.

Cin Peeler:

Yeah. Thanks Joe. And like Rachel said during the presentation we do know that this isn’t the ideal time of year to implement changes to your pricing and we appreciate your work to implement these changes ahead of the 1st of January.

To help you we have made sure that you can simply notify your care recipients of price decreases or the removal of any separate charges. I did see in the chat a lot of people asked – such as in the example with Mary where she had a $5 decrease and a $5 increase – whether you could just notify the care recipient of that shift. You do need to seek mutual consent for the $5 increase. That is in the Aged Care Act and wasn’t changed for this measure. So any increases must be agreed.

Now we’ve also made a fact sheet which we referenced before. It’s designed so you can print that off or email it off to your care recipients and that explains the charges. And so that hopefully will be helpful to providers and kind of reduce the work involved in explaining the changes to care recipients when you’re either notifying them of the price decrease or seeking agreement to price increases. And finally to support you and your work plan we’re also allowing for providers to add an addendum or a file note to the home care agreement rather than having to do a whole new agreement for these price increases.

I also just want to let you know that we’ve worked with the Aged Care Quality and Safety Commission on these changes. They will continue to undertake a range of activities to monitor compliance and where providers are found not have met their requirements the Commission will take a risk-based proportionate regulatory action. So that’s their normal process to providers not meeting their requirements in the legislation. You can go on their website and they have a lot of documents that explain how they approach their compliance measures and what level of action you could expect.

Joe Ng:

Thanks Cin. That’s a really good response. So I don’t think we have any more time for any more questions but if you do have any questions please submit them through the Q&A function and we will review them and pop them into the FAQ documents that we publish with this webinar in the end. I’ll hand it back to Rachel now.

Rachel Frost:

Thank you Cin, thank you Joe. I think it was good to tackle some of those questions. I’ve just been looking through the questions that we’ve received myself and there’s definitely some common themes there.

I think definitely it looks like there’s a need for some providers to really look at their cost models and think about what they need to charge in order to cover their costs and run their businesses as well in terms of determining what may be a reasonable price to charge. So I think that’s something for the sector and for individual providers to really have a think about. But we will attempt to answer as many of those questions as we can as quickly as we can and get that FAQ out to you.

Thank you for joining us today. We hope you’ve found value in the presentation. As I said any questions that you think of now, you can have a couple more minutes to pop those into the Q&A or else use the enquiries email address and those questions will come through to us. Obviously you’ve got great peak organisations there who can help and support you and we know they do. And yeah I think that’s it for us today. Thank you and have a great day. And goodbye for now.

[Closing visual of slide with text saying ‘Australian Government with Crest (logo)’, ‘Department of Health and Aged Care’, ‘Thank you’, ‘Visit: health.gov.au/our-work/home-care-packages-program’, ‘Phone 1800 200 422 (My Aged Care’s free call phone line)’, ‘Email AgedCareEnquiries@health.gov.au’]

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