Movement of provisionally allocated aged care places: The law catches up

by | Aug 20, 2019 | Aged Care Blog

The Aged Care Amendment (Movement of Provisionally Allocated Places) Bill 2019 (Bill) was introduced into the House of Representatives on 24 July 2019.

The Aged Care Amendment (Movement of Provisionally Allocated Places) Bill 2019 (Bill) was introduced into the House of Representatives on 24 July 2019.

The Bill proposes to amend the Aged Care Act 1997 (Act) to enable the Secretary of the Department of Health (or their delegates) to allow approved providers of residential aged care to move provisionally allocated residential aged care places from one region to another, within a state or territory.

This Bill was previously introduced to parliament in February 2019, and at the time passed the House of Representatives; but it lapsed as the Federal election was called prior to the Bill being debated in the Senate.

What is a provisionally allocated place?

Under the current Aged Care Approvals Round (ACAR) process, approved providers apply for allocations of residential aged care places.

An allocation of places takes effect when the Secretary determines that the places are ready to become operational (ie to provide care to residents): Act s 15-1(1). If this determination is not made at the time of allocation, then the allocation is taken to be a provisional allocation (Act s 15-1(2)); that is, an allocation that is yet to take effect.

Typically, provisional allocations occur where construction of an aged care facility is yet to be completed.

Isn’t it already possible to transfer residential aged care places?

Yes and no.

The Explanatory Memorandum to the Bill explains:

‘Historically, based on an incorrect interpretation of the Act, but otherwise consistent with policy intent, the Department of Health (the department) has considered applications for the movement of provisionally allocated places between regions. It has come to light that the Act does not permit a variation of the region to which residential aged care places are provisionally allocated’.

So, the Bill is intended to align the Act with what has already been the Department’s practice to date.

The transfer of places and provisionally allocated places is already dealt with in subdivision 16-B of the Act. In summary:

  • An approved provider may give the Secretary of the Department a transfer notice, in order to transfer a provisionally allocated place to another person.
  • On receiving a transfer notice, the Secretary will consider the transfer and has a right of veto.
  • So long as the transferee is an approved provider on the transfer day and the transfer has not been vetoed, the provisionally allocated places are transferred with effect on the transfer day.

Section 15-5 of the Act also allows provisional allocations to be varied on application. The Bill proposes to amend this section of the Act, as summarised below.

Amendment of the Act

At present, a provider may apply for variation of a provisional allocation, to: (a) reduce the number of places; or (b) vary any applicable conditions: Act section 15-5(2). To this, the Bill would add variations which (c) have the effect of ‘moving provisionally allocated places to a different region within the same State or Territory’. According to the Explanatory Memorandum:

‘As a result of this amendment, approved providers will be able to apply to the department to vary a provisional allocation to enable them to operationalise the place and deliver aged care services to older Australians in a different region to where they were originally allocated …’:

To be clear, the Bill would not amend the Act so as to enable the moving of provisionally allocated places from one State or Territory to another.

The Bill would also add a new subsection (8) at the end of section 15-5, listing matters to which the Secretary should have regard when assessing whether a variation to move a provisional allocation is justified. These include:

  • Whether the objectives of the planning process would be met: The ACAR process considers the aged care needs of each planning region (with respect to factors such as population growth, current operational places and provisional places). In turn, this informs the number of places allocated to a particular region, and to which providers.
  • Financial viability and sustainability of the service in the new region, and suitability of the new premises.
  • The needs of the aged care community in the new region and the original region for which the places were allocated including (if relevant to the original allocation) the needs of particular groups or the provision of particular types of aged care.
  • The impact the move will have on the timeframes attached to the place when it was first allocated.

Why move residential aged care places?

For a variety of reasons, providers who receive provisional allocations may encounter difficulty making those places operational. The Bill’s second reading speech cites town planning processes and the location of suitable land as examples.

The Explanatory Memorandum acknowledges that it is in the best interests of older Australians for residential aged care places to become operational as quickly as possible. So, to this end, the movement of provisionally allocated places from one region to another should be allowed where a provider can demonstrate that:

  • the movement is in the interests of aged care consumers;
  • there is a clear need for places in the new region; and
  • it is not detrimental to the region the provisionally allocated places are currently allocated to.

Comment: The outlook for movement of places

If the Bill is passed, the Act will simply have caught up with the Department’s existing practices. But for now, the Bill remains a work in progress, and we will be monitoring its movement through the Senate.

It is interesting that Parliament is progressing these changes to the Act at a time when the Department is undertaking an impact analysis of different arrangements for allocating residential aged care places as an alternative to ACAR. In the ‘Residential aged care: Proposed alternative models for allocating places’ discussion paper released in July 2019, one possible model suggests assigning residential aged care places to consumers (rather than to providers):

‘This reform option proposes ceasing the allocation of residential aged care places to an approved provider, and instead assigning a ‘place’ to a consumer. Consumers with an assigned residential aged care place would be able to receive subsidised residential aged care from any approved provider with an available bed in their aged care home (and is able to deliver the required care and services).

Approved providers would no longer need to obtain places through the ACAR or through transfer from other providers in order to deliver residential aged care. Payment of the residential aged care subsidy would no longer be linked to the provider holding an allocated place occupied by a consumer, but rather be contingent upon a consumer with an assigned place accessing a bed in the provider’s aged care home’.

If ACAR were replaced with an alternative allocation model this could (depending on the final model) significantly affect current practices in the transfer and movement of residential aged care places. Like the Bill, however, the Department’s impact analysis on potential new allocation models also remains a work in progress.

If you are an aged care provider with any queries about ACAR, the transfer or movement of places, or the Department’s consultation on alternative allocation models, please don’t hesitate to contact us.

David McMullen

David McMullen