ACFI Funding – where does the money go?

By 31 October 2017Uncategorized

Recently, the Minister for Ageing was reported in the media (15 April 2012) to comment about a multi-billion-dollar cost blowout in the aged care system.

The Minister was referring to a report to the effect that there were unusual claiming patterns by aged care Providers which result in increased subsidy payments but which are not having any effect on spending on extra staffing.

Under the Aged Care Act 1997, aged care providers may re-classify residents according to their care needs under an assessment system called the Aged Care Funding Instrument (ACFI). Residents may be reassessed from time to time and if their needs classification requires it, application may be made for a higher funding subsidy from the Commonwealth Department of Health & Ageing. The ACFI assessment is usually carried out by qualified people on behalf of the aged care Provider.

The objective of the ACFI system is to cover the extra staffing costs which are involved in caring for persons with higher needs. However, when an application is successful and a higher subsidy is granted, the funds go directly to the aged care provider who appears to disburse or spend funds according to the discretion of management.

In other words, all extra funding arising from re-classification is received by the provider as part of total gross income derived through subsidy.

The Aged Care Act 1997 includes among the responsibilities of approved providers, the requirement to maintain an adequate number of appropriately skilled staff to ensure that the care needs of care recipients are met (Part 4.1 – Quality of care, 54-1 Responsibilities of approved providers, (1) (b) ).

Accordingly it is reasonable to assume that if a person’s needs are assessed at a higher level because of increased disability through illness or other cause, there will be a corresponding increase in attention from appropriately skilled staff. Anecdotally however, this appears not to be the case.

Although it is not possible to be definitive about it, it seems to be rare that there is any correlation between a higher classification under the ACFI scheme and any increase in skilled staff attending to the person whose classification has changed. If that be the true position, the result seems to defy the logic of the process and its intended outcome, namely to provide a direct benefit to the person whose disabilities have been adversely assessed and re-classified upwards.

How can the resident get extra benefits from reclassification?

Recently I was talking to a client who happened to mention that he experienced a reclassification of his disabilities but that although the provider had apparently been granted extra subsidy, there had been no discernible change in the level of care he had received and certainly no increase in the number or type of care staff who attended him.

When I eventually was able to look at his residential care contract with the Provider which he signed when he entered into the residential care home, I found an interesting provision which I strongly suspect is contained in many such contracts.

It went like this:

“the provider will provide to you the care and services required by the Aged Care Act according to your needs, as assessed from time to time…”

So, in this case there was a contractual obligation on the part of the Provider to provide care according to the needs of the resident with “as assessed from time to time“.

It is my guess that such a provision is relatively common and residents should therefore make sure that if they find such a provision and if they are reassessed to a higher level of need with a consequent increase in Commonwealth subsidy going to the provider, they should ask how that extra subsidy will be spent in order to accommodate their increased need.

Considering that extra daily subsidies can exceed $100 as a result of reclassification with under the ACFI system, it may be that significant and very helpful assistance can be sought by the resident and should be offered by Provider as a logical outcome and obligation under the residential care contract itself.

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