Aged Care providers are used to dealing with acronyms – now they have a new one to learn.

By Cameron Bradley
Consultant and Partner
26 October 2021
  • Aged care

What do you need to consider when one of the main revenue streams for your business changes? That’s exactly what Australian Government funded Residential Aged Care providers should be contemplating right now. Providers will cease getting Federal care subsidy payments for consumers in Residential Aged Care under the Aged Care Funding Instrument (ACFI) framework on 30 September 2022. Subsidy payments under the Australian National Aged Care Classification (AN-ACC) framework will then commence.

What is AN-ACC and how is it different?

Unlike ACFI, which only references the needs of a Resident, AN-ACC has three distinct funding components, which consider:

  1. The costs relating to a Resident’s individual care requirements
  2. The shared or fixed costs that benefit all Residents within the home
  3. The one-off or initial costs associated with a consumer entering the Residential Aged Care system for the first time.

The AN-ACC assessment will be completed by an independent external assessor and is for funding purposes only. Care staff within a Residential Aged Care home will only assess a Resident for care planning purposes.

The Australian Government is currently running a shadow assessment program, where independent assessors will visit all Residential Aged Care homes. These assessments will determine the variable component of AN-ACC for each Resident, to be paid from 1 October 2022, with ACFI ceasing at this time. The Government will be modelling this data in the interim to finalise the exact funding rates that will be paid to each provider.

Now is not the time for Residential Aged Care providers to get complacent with ACFI however, remember this will remain the basis for funding for the next 12 months, and whilst assessment processes are changing, comprehensive clinical documentation will help ensure that a Resident is assessed accurately and supports the funding outcome.

What are some opportunities?

  • Greater levels of funding certainty and less variability when Residents change.
  • No more validations or downgrades. Unlike ACFI, a Resident’s funding will not be reassessed unless their care needs increase. Providers will have no disincentive when considering innovative and restorative care practices.

What are some risks?

  • Will I get more funding or less than I do now? Is there a financial discrepancy with the needs identified in the funding assessment versus the care planning assessment?
  • With “more time” now available for care planning, it’s likely the Resident, their family and the Aged Care Quality and Safety Commission will have a high level of expectation, more so than ever before.

What else should I be considering now?

  • Do any of your critical reporting indicators need to change, operationally or to the Board?
  • What are your current costs? Are they fixed or variable depending on individual Resident care needs?
  • What IT systems (including excel models) rely on ACFI data now? How will they need to be updated? Does this impact on your IT roadmap?
  • How will you consider the changing rostering requirements that come from an individual’s AN-ACC assessment? Will you be able to automate/integrate the requirements? How will you meet the new reporting requirements on care hours?
  • What policies and procedures will need to be updated? What education and training will your staff need and how can it be provided to them within the next 12 months? What will you do with your current ACFI Specialists?
  • Does this change allow you to reconsider your Service Delivery in any way?

PKF Audit & Assurance are positioned to help you develop an AN-ACC Transition Plan and can help you to further consider all of the points raised above. We can assist you to identify your current cost and staffing profile and to consider any gaps. We can assist you with strategic considerations, including Service Delivery, IT Infrastructure or delivery of other valued services to support a sound AN-ACC transition.