Govt takes the slow boat to veiled aged care financial transparency

Article published 26 May 2021

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THREE days after Budget 2021 was handed down, the Department of Health gave evidence at a Senate inquiry into the Aged Care Legislation Amendment (Financial Transparency) Bill 2020, brought on by cross-bench Senator Stirling Griff last year. Members of the Committee used this inquiry to get more information about the Government’s plans for financial transparency in the aged care industry, and the Department was happy to oblige, if only to prove Senator Griff’s bill was no longer needed.

Senator Griff’s bill requires providers to submit a financial transparency annual report for each and every one of their nursing homes. Reports are to be made publicly available and must include information about the cost of food, medications, continence aids and also the total cost of salaries and wages for all staff members by very specific categories (nurses, personal carers, management etc) and by their employment status (temporary, permanent, agency) staff. Providers risk sanctions if they don’t comply.

Under Senator Griff’s bill, approved providers who collect more than a total of $10 million in funding for their nursing homes from the Government in a financial year must comply with the most stringent (Tier 1) requirements of Australian accounting standards, a bit arbitrary perhaps, as it would capture only 71 per cent of nursing homes, with some escaping when they shouldn’t. TriCare, for example, operates thirteen nursing homes which, together, collected more than $82 million in subsidies at last count. However, because each TriCare nursing home is individually incorporated and is therefore operated by a separate approved provider, none of whom collects more than $10 million in subsidies, TriCare does not have to comply with Tier 1 requirements.

Senator Griff’s bill makes sense in an environment where financial transparency in aged care does not exist.

However, aged care announcements as part of Budget 2021 do attempt to address financial and other transparency concerns about the aged care industry and reveal some detail on how the Government will implement the Royal Commission’s recommendations relating to financial transparency and transparency about performance generally.

From 1 July 2021-2022, the Department is introducing an expanded annual Aged Care Financial Report which will collect detailed information on where aged care providers spend their money. The first annual report won’t be submitted until late 2022.

From 1 July 2021, to receive the new basic daily fee supplement, residential aged care providers will need to give an undertaking that they will report annually through the Aged Care Financial Reports on the adequacy of daily living services they provide, and how much they spend on these services. From October 2021 that reporting will be mandatory.

From 1 July 2022, residential aged care providers will start quarterly reporting of staff care minutes with the first batch of reports received in October 2022. From October 2023, it will become mandatory to provide 200 minutes of care per day per resident.

From 1 July 2022, providers will also be required to provide a monthly care statement to residents and their families outlining the care they receive and any significant changes or events during that month.

From 2023, as part of an amended star rating system currently published on, residential aged-care providers will be required to report on four measures of care and consumer experience, including staffing.

Note that the boosted star rating facility will not produce anything until 18 months from now and will be the first and likely very filtered and spun information to be published. It may also be the only information published. The amended Aged Care Financial Reports submitted by providers will not be published, because these reports are classified as ‘protected information’. It would require an amendment of the Aged Care Act 1997 to enable publication. Then again, the Government might just decide to wait for the new aged care legislation to fix that up or, possibly, continue with this secrecy provision in the new legislation.

The timing of the reporting requirements is very leisurely and without urgency. This in circumstances where providers already submit Aged Care Financial Reports to the Department. It wouldn’t be too hard to arrange for the expansion of these reports at short notice. The Department already collects all the data required for the expanded report. It is just a matter of harmonising data collection and presentation.

All that makes the immediate passing into law and commencement of Senator Griff’s bill, with amendments, a very desirable alternative.

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