Aged Care Facilities May Face Changes to Ratios Following Report

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It is with great interest that I read the recent Report on Access To Care (January 2017) by the Australian Government Aged Care Financing Authority. As an Aged Care Placement Consultant I need to be across any changes in aged care accommodation.

Currently all residential aged care services need to meet the supported resident ratio in their region, which was based on regional socio-economic data. If these regional ratios are not met the facility could face subsidy deductions, however it was noted in the report that no facilities have been hit with a subsidy deduction since the introduction in October 1997.

It was found that regional ratios have not only been met but in most cases exceeded by the individual facilities. During 2015-16 the report noted that 93.3% of individual services in Australia had exceed their regional ratio. In all regions the percentage of supported accommodation was well above the required ratio and had increased incrementally over the last four years. I looked at the Victorian Regions data with most interest as that is the where I operate my business as an Aged Care Placement Consultant.

Victorian Regions Table:

Region 2016 Supported Residents in Permanent Care Regional Supported Resident Ratio
Barwon South-Western 42.3% 18.6%
Eastern Metro 33.76% 16.70%
Gippsland 47.0% 18.20%
Grampians 48.8% 18.20%
Hume 42.2% 18.50%
Loddon-Mallee 46.5% 18.20%
Northern Metro 44.5% 23.40%
Southern Metro 41.9% 18.20%
Western metro 49.3% 24.70%

Considering the regional ratios are being exceeded by an average of 20 to 30% ACFA considers there is not a strong case to continue the regional ratios. They don’t consider that provider behaviour is being significantly affected by the ratios. However, they do see a clear financial incentive with the separate 40% rule, which they see as a more effective influencer in provider behaviour.

The 40% rule deems that an aged care service provider can receive the maximum amount of accommodation supplement for each supported resident if more than 40% of total residents are supported residents and this is based on daily ratios. The maximum amount per day for supported residents is $54.39 in a modern or newly refurbished facility and $35.44 a day in an older facility. If the 40% ratio is not met the supplement is reduced by 25%.

ACFA recommends that the 40% ratio rule be applied on a monthly rather than daily basis. This would mean that the supplement is payable for a month at a time rather than days at a time, which would reduce administrative work considerably. Following this system if a facility had under 40% of supported residents for a whole month then their payment would reduce by 25% for the month, however if they had over 40% of supported residents for the month their payment would stay at the maximum amount. The average ratio of supported residents in 2015-16 for Australia was 46.8%, with Victoria being 42.5%.  Only the ACT fell below 40% at 38.7%.

Full Report.

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