Nov 17, 2022

Dodgy providers should be “weeded out” through new home care fee caps

17_11_2022 home care

The Federal Government will set a cap on how much providers can charge on administrative and management fees in the Home Care Packages (HCP) Program in the new year.

From January 1, 2023, care management prices will be capped at 20% of the package level and package management prices will be capped at 15% of the package level.

This announcement follows recent legislation that passed Parliament in late October, the Aged Care Amendment (Implementing Care Reform) Bill 2022, which included HCP caps and 24/7 nursing mandates.

Under these newly announced changes from the Government, providers will not be able to charge for package management in a calendar month where no services other than care management were delivered, except for the first month of care.

Providers will also not be able to charge separately for third party services including brokerage, handling and subcontracting charges, or charge exit amounts.

Aged care peak bodies have called this move a win for older Australians and have said these caps will give them and their families confidence that their money will go exactly where it needs to. 

Council on the Ageing (COTA) Australia Chief Executive, Ian Yates, said quality home care is vital for older Australians and this announcement is an important step in improving care and boosting accountability and transparency in the sector.

“Older Australians deserve to have their Home Care Package funds going directly to the care they need and deserve – not being used up on things like higher than average profits or inefficient management and administration,” he said.

“The issue isn’t just about price gouging or excess profits, it’s also about inefficiencies in how some providers operate. 

“The Government needs to be awake to this and make sure we’re weeding out inefficient operators who refuse to move with the times.”

Chief Executive Officer of National Seniors Australia, Professor John McCallum, agreed and said that the high demand for home care services posed no incentive for providers to keep costs competitive and that some older Australians have been paying up to 50% of their Home Care Package in administration and management fees.

Chief Executive Officer of Aged & Community Care Providers Association (ACCPA), Tom Symondson, said most home care providers won’t be impacted by these change as they already charge less than the caps, but will work with the Government to implement them smoothly.

“These caps also recognise the important role of the providers and allow them enough leeway to pay for the delivery of these important services,” he said.

Back in August, Aged Care Minister, Anika Wells, said that a review into home care found some recipients were paying up to 60% for care management or 30% for package management, and some providers charged fees for recipients exiting their package or processing invoices – which was unacceptable.

Ms McCallum explained, “The Royal Commission into Aged Care Quality and Safety found action was required to address home care charges, because some providers were overcharging.

“[Those administration and management fees are] not affordable or sustainable and is simply wrong.

“Excessive fees can restrict people’s access to services which can not only compromise their wellbeing and safety at home but also lead to premature entry into residential aged care.”

Mr Yates noted that while these changes are a big step forward, it is critical the Government monitors the system to ensure this reform is delivering on its aims, that services are priced fairly and that providers are complying.

While the caps set the maximum amount a provider can charge, he said they are not the target price for these services or an indicator of what is considered a ‘reasonable’ price, so the Government will need to consider the need for additional or lower caps in the near future.

The Government has clarified that care management is a mandatory support service and that all prices must be reasonable.

“We need full pricing transparency, and it must be compulsory for every provider, with penalties for non-compliance. Too many providers are still ignoring this obligation,” said Mr Yates.

“The Government must also ensure its pricing for services is adequate, with the assistance of the new Independent Health and Aged Care Pricing Authority, so providers are receiving the level of subsidy that’s needed to deliver services that meet independently assessed needs.”

Ms Wells told Guardian Australian that these fee cap changes would give recipients better value for money and more power to “shop around” for packages.

“We will support providers to adjust their pricing and set reasonable and competitive charges,” she said.

“I encourage providers to start planning for and talking to their care recipients about these changes now.”

From July 2024, under changes to home care, the Federal Government will combine home care services into a new streamlined ‘Support at Home’ program which will see them set home care prices.

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  1. Make sure you are aware of all people are in places where they are cared for are in a way they can stay in these beautiful buildings who they call home. Last rise of fees they were very worried with affordability that they are finding it the funds they had would have to come for advice .

  2. Thanks for your informative article.
    Could you please let me know more about:

    ”Providers will also not be able to charge separately for third party services including brokerage, handling and subcontracting charges, or charge exit amounts.”

    I’m not sure if this means, that providers can no longer contract Direct Care workers (who have their own ABN)? (for example ”Mabel”)? Or does this mean, providers who charge extra to the package, on top of the contracted carer’s hourly rate.?

    Are you able to provide me with a link to this information from the Government?
    Thank you

  3. NONE of this would be happening if the HACS at local councils was to keep going. Governments CLAIM they want to see more people be able to stay in their OWN HOMES – and that is everyone’s right surely? but by WITHDRAWING funding to HACS and farming out people to agencies which are springing up at a rate of knots there WILL BE a HUGE influx of people into Aged care facilities. The INCREDIBLE WORTH from a humanitarian viewpoint as well as the practicalities CANNOT be put into words. Elderly loved one’s families are ALSO going to be put under the financial pump to find ‘deposits” and ingoings into Aged Care facilities. This total DEMOLITION of the HACS services is an UBERIZATION of Aged Care and is a disgrace. I spoke at a Council meeting to TRY to persuade Whitehorse Council from canceling their HACS but to no avail. The elderly are the most important people in all of this but there will be hundreds of job losses too at all levels. PLEASE – is their ANYONE who can think intelligently enough to KEEP the HACS at councils AND embellish on them?

  4. Yes when my mum died she was charged an exit fee from her provider
    Plus also a mask fee
    She had left for 3 months in respite care they still charged for it

  5. 1)Thankyou -Seniors with more disability and Alzheimer’s /Dementia PLUS WITH NO FAMILY CLOSEBY should be CARED more by the PROVIDER rat home with low care hrs as $25/hr as given to carers but charged $30 or $40 /hr
    2)I ,Anna S-Knight Using Providers from 2002 onwards after my car accident /ongoing injury I’m still suffering …..with loss of hubby last year -Cared for him ten years or more with Prostrate Cancer Spread to his bones -Lack of Sleep from last Ten years of caring ….NEED MORE HRS OF CARE FROM PRESENT RAMCARE PROVIDER
    3) Get carers twice daily as I’m all alone -75 yrs this yr 2023,hearing and eyesight troubles & on walking stick & walker/wheelchair /No family makes it more difficult 4) Cannot go out alone.Even taxi subsidy card there -need carer to take me out .5) only 2 hrs morning & one hr night -Not enough hrs of care 6) many days without shower /outing/no food – still try to go out alone ,but had headswing -no one there to pick me up etc etc -Government should have check on Providers & Client check up every months.Tell providers to take less hourly rate of care hrs & Quality care given & take feedback .from Clients should -be COMPULSORY .7) Admin fee /Management fee taken away more from clients care hrs ESP LEVEL FOUR homecare package -AND THOSE WITH NO FAMILY -PLEASE CHECK THE PROVIDERS PLEASE -No Exit fee to be charged ? Clients with No family -should get Agedcare AADA help /support Always .Please ! Thankyou for your Support government of Australia -Agedcare …etc -contact me email below


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