Fed Govt unveils second $200M tranche of Royal Commission reforms – targeting funding, personal care workers, home care, governance and pricing

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Federal Health Minister Greg Hunt has introduced the second stage of the Government’s reforms in response to the Royal Commission recommendations, with more funding but more regulation, red tape and the threat of penalties on the way.

Following on from the first tranche of legislation released in June, the Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021 – which runs to 208 pages – covers a number of recommendations taken up by the Government and costed at $201.3 million, including:

  • Australian National Aged Care Classification (AN-ACC)

The Aged Care Funding Instrument (ACFI) will be replaced by the Australian National Aged Care Classification (AN-ACC) model which has been developed over several years.

Residential aged care recipients have been assessed and classified under the AN-ACC since April this year – this classification will be linked to the subsidy calculation for residential providers from 1 October 2022 – just over a year from now.

  • Aged care and support worker regulation

The Bill also establishes nationally consistent pre-employment screening for aged care workers and governing persons of approved providers and a code of conduct for approved providers, workers and board directors.

This will be enforced by the Aged Care Quality and Safety Commissioner with offenders to face civil penalties and new banning orders for individuals.

“This will have the effect of prohibiting or restricting them from being involved in the provision of any type, or specified types, of aged care, or from engaging in specified activities as an aged care worker or governing person of an approved provider,” reads the Bill.

“Civil penalties may apply to approved providers, aged care workers or governing persons, for breaching a banning order.”

  • Extending the Serious Incident Response Scheme to home care

The Serious Incident Response Scheme (SIRS) will also be extended to home care and flexible care from 1 July 2022.

Under the scheme, home care providers will be required to identify, record, manage and resolve all incidents that occur.

  • Strengthening provider governance

Approved providers will also be subject to increasing governance requirements from 1 March 2022 including providing an annual statement on their operations that will be made publicly available.

The amendments will also require approved providers to notify the Commission of changes to key personnel and will replace the current disqualified individual arrangements with a suitability test for key personnel, similar to the National Disability Insurance Scheme (NDIS).

“The new governance arrangements will improve the transparency and accountability of providers, and will change the culture from the top down,” stated Mr Hunt.

  • Enhanced information sharing

The Government is also taking the first step towards aligning regulations across aged care, disability support and veterans’ care with increased information-sharing by the aged care regulator, Department of Health and Department of Veterans’ Affairs with specified Commonwealth bodies.

“It will facilitate information-sharing about providers and workers operating across the care and support sector who are not complying with their obligations, are failing to provide quality care or whose conduct might be putting senior Australians at risk,” explained Mr Hunt.

  • Increased financial and prudential oversight

The bill also flags the implementation of a new financial and prudential monitoring, compliance and intervention framework for the aged care sector aimed at improving financial accountability and identifying providers that are at risk of going under.

This includes enabling the Department or the Commissioner to request information or documents from a provider around RADs and makes it an offence to withhold that information.

This bill will also extend the period of liability between misuse of RADs and insolvency for both providers and key personnel from two years to five years.

  • Independent Health and Aged Care Pricing Authority

Finally, the bill will enable the newly renamed Independent Health and Aged Care Pricing Authority to provide advice on aged care pricing.

You can read the full Bill here.

It’s a mixed bag of measures.

There will be significantly more red tape for providers and staff – but also a new pricing structure that should reward providers that are efficient.

The reforms may also further add to workforce pressures – at all levels.

We hear from operators that many have facility managers and board directors who are nervous about the level of regulation and threat of civil penalties under the new system.

Will they look for the exit?

We will be taking a closer look at the sector’s workforce challenges in this week’s issue of SATURDAY, in your inbox at 6am, 11 September. Subscribe here to read the full issue.