Residential aged care funding reform

AN-ACC residential care funding model

The AN-ACC funding model is an efficient, transparent and sustainable funding model for residential aged care.

It provides more equitable funding to residential aged care providers that better matches residents’ needs and the costs of delivering care, particularly in:

• rural and remote locations
• Indigenous and homeless specialist services.

AN-ACC key elements

There are 3 main elements under the AN-ACC funding model:

1. resident assessments will be completed by an independent AN-ACC assessor instead of residential aged care workers
2. the AN-ACC subsidy paid to providers has 3 components – fixed, variable, and a one-off entry payment. The characteristics of a residential aged care home, such as location or specialisation, determines a fixed amount of funding, and the variable funding component is determined by an independent assessment of a resident’s care needs
3. annual pricing and model review, informed by independent analysis from the Independent Health and Aged Care Pricing Authority (IHACPA) based on costing studies and other available aged care sector data.

Learn more about the AN-ACC funding model.

AN-ACC background

Under the Aged Care Funding Instrument (ACFI), funding levels for residential aged care services:

• did not adequately differentiate between residents about the costs of delivering care
• resulted in volatile revenue streams for providers and costs to the government
• required clinical workers in residential aged care to assess residents for funding, reducing their availability to deliver care.

Reflecting on these issues, the Royal Commission into Aged Care Quality and Safety recommended introducing a case-mix funding model for residential aged care, such as AN-ACC.

The Australian Health Services Research Institute developed the AN-ACC for the government between 2017 and 2019. The model was independently researched, trialled and tested.

The AN-ACC timeframes outline the key milestones for the implementation of the AN-ACC funding model.

AN-ACC timeframes

Learn more