Introduction
1.1
The Aged Care Amendment (Aged Care Recipient Classification) Bill 2020 (bill) amends the Aged Care Act 1997 (Act) to enable an alternative classification system for determining the care needs of recipients of residential aged care.
1.2
The proposed changes will allow independent assessors to classify aged care residents into categories, using the Australian National Aged Care Classification (AN-ACC) assessment tool. This will operate alongside the existing Aged Care Funding Instrument (ACFI) assessment process which will continue to be used for funding purposes.
1.3
The bill does not implement the AN-ACC nor make changes to aged care funding under the ACFI. The bill allows AN-ACC ‘shadow assessments’ to be undertaken for the entire residential aged care population from 1 March 2021.
Conduct of the inquiry
1.4
On 12 November 2020, the Senate referred the provisions of the bill to the committee for inquiry and report by 2 December 2020.
1.5
The committee advertised the inquiry on its website and invited submissions by 23 November 2020. The committee received 8 submissions, listed at Appendix 1 of this report.
Acknowledgement
1.6
The committee would like to thank those individuals and organisations that made submissions to the inquiry.
Background
Current funding framework – the Aged Care Funding Instrument (ACFI)
1.7
The Australian Government (government) subsidises the costs of running approved residential aged care homes. The amount of subsidy paid is based on assessments of the residents’ ongoing care needs. Currently these assessments are conducted in-house by staff at residential aged care homes using the ACFI assessment tool.
1.8
Reports produced by both independent researchers and the statutory Aged Care Financing Authority have found the ACFI provides strong incentives for providers to deliver outdated methods of care to produce higher subsidy payments.
1.9
In his second reading speech, the Hon Dan Tehan MP noted that:
The ACFI has been found to no longer be fit for purpose and its use has been found to lead to perverse actions by aged-care providers, causing perverse outcomes for aged-care recipients.
1.10
The Legislated Review of Aged Care 2017 recommended that assessments of funding should be conducted by independent service providers to reduce the risk of a conflict of interest.
1.11
Since the 2016 Budget, the government has committed to developing and testing a lasting alternative to ACFI.
A new model – the Australian National Aged Care Classification (AN-ACC)
Resource Utilisation and Classification Study
1.12
Between 2017 and 2019 the government funded the University of Wollongong to perform a research project, the Resource Utilisation and Classification Study (RUC study). With the involvement of almost 200 residential aged care services, the study empirically measured drivers of the costs of delivering care, and recommended a new resident classification model called the AN-ACC.
1.13
The AN-ACC assessment and funding model is based on six key design elements:
(a)
Resident assessment for funding to be separate from resident assessment for care planning purposes.
(b)
Assessment for funding purposes to be undertaken by external assessors capturing the information necessary to assign a resident to a payment class.
(c)
Assessment related to care planning to be undertaken by the residential aged care facility based on resident needs and underpinned by consumer directed care principles.
(d)
Provision of a one-off adjustment payment for each new resident that recognises additional, but time-limited, resource requirements when someone initially enters residential care.
(e)
A fixed price per day for the costs of care that are shared equally by all residents. This may vary by location and other factors.
(f)
A variable price per day for the costs of individualised care for each resident based on their AN-ACC casemix class.
AN-ACC consultation and trial
1.14
The government has consulted extensively on the AN-ACC through stakeholder forums, an industry reference group, a consultation paper and now a stakeholder working group.
1.15
On 10 February 2019, the Prime Minister announced a $4.6 million trial of the AN-ACC assessment model.
1.16
The purpose of the trial was to collect data to validate the expected distribution of care recipient classifications under the AN-ACC and field test the performance of the assessment tool, an independent assessment workforce and the training, clinical and IT supports for assessors.
1.17
For the purposes of the trial, sixty registered nurses, occupational therapists and physiotherapists from four contracted organisations were trained to undertake AN-ACC assessments in a two-day course.
1.18
The trial was to be completed by 30 June 2020, and to involve the assessment of up to 12 000 aged care residents across all states and the mainland territories including locations from inner metropolitan to very remote. COVID-19 restrictions led to resident assessments ceasing in early April 2020, at which point 7 387 AN-ACC assessments were completed, across 122 homes.
1.19
The trial demonstrated that the AN-ACC assessment model is fit-for-purpose, nationally scalable and costs less on a per-assessment basis than was anticipated when the RUC study was completed.
Responding to the Royal Commission into Aged Care Quality and Safety
1.20
The government is progressing work on the AN-ACC as a possible replacement for the ACFI as it prepares to respond to the recommendations of the Royal Commission into Aged Care Quality and Safety (Royal Commission), which is due to hand down its final report by 26 February 2021.
1.21
Counsel Assisting the Royal Commission has proposed an extensive set of recommendations for aged care reform. This includes a proposal to move to a casemix classification system in residential aged care, such as the AN-ACC, by 1 July 2022. In addition, ongoing evidence-based reviews are proposed in order to refine the model iteratively to ensure accurate classification and funding to meet assessed needs.
1.22
The government described the bill as a phase of preparation that will allow it, in the context of a response to the findings of the Royal Commission, to quickly and seamlessly transition funding from the outdated ACFI:
It sets the stage for a more contemporary, efficient, effective and stable funding approach, one that will promote investment in residential aged care refurbishment and expansion, and that will support providers to better deliver the individualised care that each resident needs.
AN-ACC shadow assessments
1.23
The bill will enable a period of ‘shadow assessment’ using the new AN-ACC assessment tool. The term shadow assessment reflects that the AN-ACC assessments will be occurring in parallel to ACFI assessments. ACFI processes will not change and will continue to operate as the mechanism through which funding assessments are made.
1.24
The government has not made a final decision on whether to transition from ACFI to AN-ACC. The shadow assessment period will be used to inform reform options to replace the ACFI. Further consultation is planned before any final decision on the commencement of the AN-ACC and ongoing assessment workforce is finalised.
Key provisions of the bill
1.25
Item 3 inserts new Part 2.4A of the Act, which sets out the new scheme to classify care recipients on the Secretary of the Department of Health’s (secretary) own initiative.
1.26
New Division 29B sets out what the Part is about, and provides that, on the secretary’s initiative, the secretary may classify care recipients approved for residential care, or for some kinds of flexible care, according to the level of care they need.
1.27
This Division provides that the classification of care recipients is also dealt with in the Classification Principles, and that the provisions in Part 2.4A indicate when a particular matter is or may be dealt with in the Classification Principles.
Classification Principles
1.28
Item 10 amends section 96-1 of the Act and gives the power to the Minister for Aged Care and Senior Australians (minister) to, by legislative instrument, make Classification Principles providing for matters required or permitted, or necessary or convenient, to give effect to the amendments introduced by this bill.
Classification of care recipients
1.29
New Division 29C sets out the provisions which determine how care recipients are classified. New subsection 29C-2(3) provides that the Classification Principles may specify methods or procedures that the secretary must follow in determining the appropriate classification level for the care recipient.
1.30
In classifying the care recipient, the secretary must take into account the assessment of the care needs of the care recipient mentioned in subsection 29C2(2) and any other matters specified in the Classification Principles.
Reclassification of care recipients
1.31
New Division 29D sets out the provisions relating to how care recipients are reclassified for the purpose of new Part 2.4A. New section 29D-1 provides that the secretary may reclassify a care recipient if an approved provider requests, in writing, that the secretary reclassify the care recipient.
1.32
The secretary must not reclassify the care recipient unless the secretary is satisfied that the care needs of the care recipient have changed significantly. New section 29D-1 provides that the Classification Principles may specify the circumstances in which the care needs of the care recipient are taken to have changed significantly.
Changing classifications
1.33
New Division 29E sets out the provisions relating to how classifications are changed and provides that the secretary must change a classification of a care recipient under Part 2.4A if the secretary is satisfied that the assessment or classification was incorrect or inaccurate.
Delegation of powers and functions
1.34
Item 11 amends the Act to provide that the secretary may, in writing, delegate the secretary’s powers and functions under section 29C-3 (secretary may assess care recipients) to a person who satisfies criteria to be specified in the Classification Principles (for example, professional qualifications, demonstrated experience, role-specific training and other formal credentials required of a delegate).
1.35
New section 96-2A provides that delegates must be issued with photographic identity cards. The amendments make it a requirement for the delegate, when exercising the secretary’s powers and functions, to carry the identity card and show it when requested by a provider. It would also be an offence to not return the identity card within 14 days of ceasing to be a delegate.
Limited effect of classifications
1.36
New Division 29F sets out the provisions relating to the limited effect of classifications under new Part 2.4A. Accordingly, the classification level cannot affect any amount of subsidy payable under Chapter 3 of the Act or Chapter 3 of the Aged Care (Transitional Provisions) Act 1997, or any amount that an approved provider may charge the care recipient for the provision of care and services.
Use of computer programs to make decisions
1.37
New section 29C-8 provides that the secretary may use computer programs for decision-making on the classification of care recipients under section 29C-2. This provision provides that a decision made by the operation of a computer program under such an arrangement is taken to be a decision made by the secretary.
1.38
New section 29C-8 also provides that the secretary may substitute a decision made by the operation of a computer program if the secretary is satisfied that the decision is incorrect. This provision does not limit any other provision that provides for the review or reconsideration of a decision.
Financial implications
1.39
The explanatory memorandum (EM) noted that the bill has no financial impact.
1.40
The 2020–21 Budget allocated $91.6 million over two years from 2020–21 to continue the reform to residential aged care funding including undertaking shadow assessments using the AN-ACC.
Legislative Scrutiny
1.41
The Parliamentary Joint Committee on Human Rights made no comment in relation to the bill.
Senate Standing Committee for the Scrutiny of Bills
1.42
The Senate Standing Committee for the Scrutiny of Bills (scrutiny of bills committee) has considered the bill and requested advice from the minister on the following matters:
significant matters in delegated legislation;
broad delegation of administrative power;
computerised decision-making; and
1.43
The scrutiny of bills committee’s consideration of the bill was not finalised at the time this report was prepared.
Issues raised in evidence
1.44
Inquiry participants indicated broad support for the bill and efforts to reform the funding model for the aged care sector.
1.45
However some concerns were raised about elements of the bill’s practical implementation including automated decision making, the process for reviewing classification decisions, and workforce considerations.
Automated decision making
1.46
Some submitters raised concerns about the proposed use of computer programs to make decisions for the purposes of classifying care recipients, particularly in light of the issues caused by ‘Robodebt’. The Older Persons Advocacy Network (OPAN) recommended the inclusion in the legislation of the power of ad-hoc reviews of computer program decisions as an oversight measure.
1.47
The EM notes that the provision regarding computerised decision making is consistent with the principles set out in the Administrative Review Council’s 2004 report Automated Assistance in Administrative Decision Making.
1.48
Further, the bill provides mechanisms for the secretary to substitute and review decisions made with a computer program if it malfunctions or makes an erroneous decision. The bill also limits the use of automated decisionmaking to the classification of care recipients.
Reviewing decisions
1.49
Some submitters raised concerns about the provisions of the bill which allow for review of classification decisions.
1.50
OPAN recommended that the care recipient should be advised of the outcome of a review of classification regardless of whether the review results in a change of classification.
1.51
Leading Age Services Australia (LASA) submitted that care recipients, their appointed advocates and providers should be able to challenge an assessment free-of-charge via a body independent from the Federal Government.
1.52
The EM notes that, under the bill, decisions of the secretary to classify a care recipient, to refuse to reclassify a care recipient, and to change the classification of care recipient, are reviewable under Part 6.1 of the Act. Part 6.1 provides that a person whose interests are affected by a reviewable decision may request a reconsideration of that decision by the secretary, and they also have further review rights to the Administrative Appeals Tribunal.
Workforce considerations
1.53
The Western Australian (WA) Minister for Health told the committee that the creation of the shadow assessment workforce would create significant workforce pressures that could diminish the ability of the aged care sector to deliver routine services:
It is likely that the Commonwealth’s shadow assessment process will draw from the finite pool of qualified nursing and allied health staff in existing health and aged care services who are already carrying a heavy burden from preparing for and responding to the COVID-19 pandemic, in addition to the normal care they provide for older people.
1.54
A key finding of the government’s report on the trial of the AN-ACC assessment model was that an ‘appropriately qualified and experienced independent assessment workforce, employed through contracted assessment management organisations, is readily available to undertake AN-ACC assessments’.
1.55
Other submitters suggested further requirements apply to the assessment workforce.
1.56
The Federation of Ethnic Communities’ Councils of Australia (FECCA) recommended that aged care assessments of culturally and linguistically diverse (CALD) older persons be guided by a Diversity Advisor who should also be involved in ensuring that training of assessors includes cultural competency, cultural safety and trauma-informed approaches.
1.57
The government has noted that all assessors acting as delegates of the secretary will need to meet strict professional qualification and additional training criteria, to be detailed in subordinate legislation.
1.58
OPAN also recommended the bill’s provision be amended to allow for care recipients to also request the delegate to show the delegate’s identity card.
Other issues
Notifying approved providers
1.59
OPAN suggested that, where the AN-ACC assessment is undertaken prior to entry into residential care, the approved provider should not be advised of the specific AN-ACC class assigned. OPAN reported that approved providers have displayed preferential resident selection based on the potential outcomes of the ACFI.
1.60
LASA submitted that notifying approved providers prior to admission is critical:
The purpose of this design is to prevent providers from ‘cherry-picking’ residents. However, LASA considers it important that providers know a resident’s classification prior to admission to ensure that staff numbers, skill and equipment are available to deliver the care needed.
1.61
The RUC study recommended that care homes should not be advised of the AN-ACC classification prior to a resident’s entry to avoid preferential treatment. However, the study also noted that homes could still receive relevant documentation and referral information, and that the only information restriction should be the specific AN-ACC classification.
Criteria for reclassification
1.62
LASA told the committee that the three grounds for the reassessment of residents’ needs as detailed in the AN-ACC model do not sufficiently capture the breadth of medical, behavioural or mental health reasons that may trigger an increased need for care. As such, LASA recommended that:
…criteria for re-assessment should be developed that account for well-accepted causes of increases in care need that are sufficient to warrant re-assessment.
1.63
The bill provides that the secretary may reclassify a care recipient if an approved provider requests a reclassification in writing and the secretary is satisfied that the needs of the recipient have changed significantly. The Classification Principles may specify the circumstances in which the care needs of the care recipient are taken to have changed significantly.
Consultation with states and territories
1.64
Given the complex interface between the health care system and the aged care system, the WA Minister for Health emphasised the need for greater engagement with state and territory ministers and senior officials stating:
Any reforms must have a whole-of-system approach, with a full appreciation of the impacts on older people’s health outcomes, patient flow, costs and workforce.
1.65
The Department of Health (department) indicated that the shadow assessment process will provide the necessary data to understand the operation of the ANACC funding model which will be used to inform any decision by government.
1.66
The government has committed to continuing to consult broadly on implementation matters before decisions on the commencement of the proposed AN-ACC model are finalised.
Matters beyond the scope of the bill
1.67
The committee also received evidence from submitters regarding funding issues which are beyond the scope of the current bill:
calls for an independent pricing authority;
financial impacts of any transition from ACFI to AN-ACC;
potential values assigned to the national weighted activity unit of AN-ACC; and
Committee view
1.68
The committee is well aware that the aged care system needs a reformed funding model to replace the outdated Aged Care Funding Instrument (ACFI).
1.69
Since the 2016 Budget, the government has worked toward developing a lasting alternative to ACFI, including through funding the University of Wollongong research project, which recommended a new resident classification model, the AN-ACC.
1.70
The committee notes that the shadow assessments of residential aged care recipients using the AN-ACC model, which this bill facilitates, will build on the model’s extensive development process, the successful trial and widespread consultation with the sector and provide an opportunity for further refinement.
1.71
The committee considers the bill’s provisions to be an important mechanism to allow the aged care sector and the government to quickly and adequately respond to the findings of the Royal Commission into Aged Care Quality and Safety, which are expected in early 2021.
1.72
The committee encourages the department to closely monitor and evaluate the shadow assessments process and the outcome of the Royal Commission, and consult appropriately on any proposed changes, before a decision is made on the final model.
1.73
The Aged Care Amendment (Aged Care Recipient Classification) Bill 2020 paves the way for a more modern, efficient and stable approach to funding in the residential aged care sector.
1.74
Importantly, a reformed funding model will ensure providers are adequately supported to better deliver individualised care that meets the needs of aged care residents.
1.75
The committee recommends that the bill be passed.
Senator Wendy Askew
Chair