Legislative update | Home care pricing transparency and comparability

Approved providers of home care will be aware that reforms aimed at transparency and comparability of home care pricing information, and the reduction of high administration costs, have applied to new home care recipients since 1 July 2019.

For pre-existing care recipients, providers were given until 1 July 2020 to transition them to arrangements compliant with the new regime. With this date fast approaching, providers should ensure they are on track to comply.

Recap on home care pricing transparency and comparability

The Aged Care Legislation Amendment (Comparability of Home Care Pricing Information) Principles 2019 introduced various changes to the User Rights Principles 2014. In summary:

Publishing of pricing information

• Since 1 July 2019, providers have been required to submit notice of prices and fees for common care and services in an approved form (“Pricing Schedule”). In practice, providers enter their prices in the My Aged Care service provider portal.
• Home care providers must also publish a document (such as a PDF) or a website link to a list setting out the price of each kind of care and each service that they provide (not just the common ones).

Package Management and Business Costs

• New definitions were inserted at section 4 of the User Rights Principles, from 1 July 2019:
• Business costs means ‘the costs of running a business that are not directly related to the provision of home care (for example, office rent, insurance and marketing) …’;
• Package management means activities that a provider is required to take to manage ‘the provision of a package of care and services … and the quality of the care and services included in the package …’.
• Package management can be charged as a standalone item and is in fact not of the items listed in the standardised pricing schedule: Section 19B(1)(d).
• Business costs must not be charged as standalone items. Providers are expressly prohibited from applying these costs (however described) as a separate charge: Section 21K. Business costs can, however, be factored into the cost of care and services.
• Providers must not charge more than a ‘reasonable amount’ for package management costs or business costs (as well as any travel and subcontracting costs of the kind listed in the standardised schedule): Section 21L.

Home care agreements

• New home care agreements since 1 July 2019 have been required to include a copy of the provider’s current Pricing Schedule: Section 23(2)(ba).
• As a general rule, the price charged for care or services must not be more than the price mentioned in the Pricing Schedule: Section 21M.

1 July 2020 – completing the transition

Keeping pricing information up to date

The publication of pricing information is not a one-off requirement.

Home care providers need to ensure their published pricing information remains up to date, and lodge updated notices (i.e. update their Pricing Schedule and full pricing information) whenever their pricing changes (sections 19B(3) and 19C(3)) and at least once every 12 months (snew section 19D).

Clients pre-dating 1 July 2019

Care recipients who were receiving home care on 30 June 2019 must be transitioned to meet the new pricing requirements by 1 July 2020.

Ideally, providers will have been making steady progress at this since July last year. But the reality is, it has been a busy and challenging period in aged care. But where there are pre-1 July 2019 clients who still need to be transitioned, here are the checks for providers to complete.

1. Ensure clients are not being charged for ‘business costs’.
2. Include a copy of your Pricing Schedule in each client’s home care agreement.
3. If a client is to be charged a different amount for a service, to what is provided for in the Pricing Schedule, their home care agreement must state this, along with the reason for the different price.

Comment

Rather than making piecemeal amendments to home care agreements that pre-date 1 July 2019, some providers may prefer to ask clients to sign a new home care agreement in line with whatever current standard agreement they offer to new clients.

In reality, many clients may not understand why changes to their home care agreement are needed, or may not be interested or willing to entertain changes.

If this is the case, providers need to approach the situation having regard to the client’s rights under the User Rights Principles, as well as anything agreed in their existing home care agreement. If you are unsure how to go about this (and particularly if you encounter clients who are unwilling to partake in the transition), please do not hesitate to contact us. We would be pleased to assist you.

Please contact Gemma McGrath or  David McMullen on (08) 9321 0522 should you require practical advice with respect to the new regime and compliance.