Nov 29, 2017

Excessive Exit Fees: Home Care Services Over-Charging the Elderly?

Consumer Directed Care was meant to give choice and control back to the consumer – but many feel like that that hasn’t happened.

It’s been reported recently that home care services are charging excessive exit fees to clients who wish to change service providers – fees so high that vulnerable elderly feel that cannot move, essentially being robbed of choice.

While there are at least 15 home care services are charging at least $1000 for residents, some providers are charging up to $5000 for people to leave .

According to the Health Department, 64 per cent of home care providers have charged exit fees which must be published on the myagedcare.gov.au website.

The topic of exit fees is one that has been raised a number of times since the principles of Consumer Directed Care were fully implemented in the Home Care program in February this year.

The issue of what to charge a consumer is left up to the discretion of the provider however there are some “guidelines” that the Department has published to guide decision making

According to those guidelines:

There is no set ‘cap’ or threshold on exit amounts. However, the exit amount you may deduct from a client’s unspent home care amount cannot be more than:

 

  • Your published maximum exit amount at the time the Home Care Agreement was entered into; and
  • The exit amount included in the client’s Home Care Agreement; and
  • The client’s unspent home care amount.

 

Pat Sparrow, CEO of Aged Care Services Australia, explains that “exit fees can vary between providers and we encourage consumers to compare prices and shop around.”  

According to ACSA, the average fee is about $417, and many providers are charging less than that, with several charging no fees at all.

“Fees can’t be charged unless the consumer agrees to the contract that includes such a fee. Exit amounts can’t be more than the amount stated in your Home Care Agreement, or your unused home care balance.”

“Providers with higher-than-average exit fees must be mindful of competing in what is a consumer-directed market. People can move their package from one provider to another according to their preferences, and exit fees are an important part of those preferences.

Tracey Silvester, Executive Manager of Envigor Home Care, says that exit fees are “not fair but it is well within the guidelines.”

“As discussed earlier in the year when Home Care Packages went from being allocated to providers to being allocated to consumers, exit fees are an area that consumers should check before they enter into an agreement with a provider.”  

“A consumer cannot be charged out of pocket for an exit fee that is greater than the balance of their package when they leave the package.”

“What it does mean is that if they are transferring to another provider, there may be no funds available in their package for contingencies if they become sick and need extra services etc.”

Tracey explains that her home care service have chosen not to ask for such fees, “Envigor has made the decision to not charge exit fees to consumers.”

“We believe that package funds should be available totally for the provision of services, not to prop up administrative overheads incurred by providers.”  

“If a provider is charging an exit fee that is high, and a consumer wishes to move their package to another provider then it probably further justifies their decision to move that package.”  

“Our advice to consumers is to check and recheck their agreements before they sign.If there is something you don’t understand in the agreement then ask for clarification.”

Tracey says that “it is important for consumers to check the [MyAgedCare] website before they contact providers so that they can make informed decisions regarding their services.”

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