The Aged Care Amendment (2008 Measures No. 2) Bill 2008
1.1
On 16 October 2008 the Senate, on the recommendation of the Selection of
Bills Committee, referred the provisions of the Aged Care Amendment (2008
Measures No. 2) Bill 2008 (hereafter 'the bill') to the Community Affairs
Committee for inquiry and report by 20 November 2008.
1.2
The inquiry was advertised in The Australian and through the
Internet. The committee wrote to interested individuals and groups inviting submissions.
The committee received submissions from 16 individuals and organisations, and
these are listed at Appendix 1. The committee held a public hearing in Canberra
on 14 November 2008. Details of the public hearing are referred to in
Appendix 2. The submissions and Hansard transcript of evidence may be accessed
through the committee's website at https://www.aph.gov.au/senate_ca.
1.3
The committee notes that the Senate's Finance and Public Administration
committee is currently holding a broader inquiry into residential and community
aged care in Australia, and has sought not to traverse any such broader issues
in discussing the bill before the committee.
Residential aged care
1.4
Many older Australians receive care in residential aged care facilities,
and there are now around a thousand organisations providing approved care.[1]
Residential aged care comprises a range of supported accommodation services for
older people who are unable to continue living independently in their own
homes. It includes high level and low level care, depending on the amount of
assistance the resident requires. There are also programs that support care in
the home or home-like environments, including Community Aged Care Packages and
Extended Aged Care at Home.[2]
1.5
Residential aged care is governed by the Commonwealth's Aged Care Act
1997 (hereafter 'the Act') and the User Rights Principles. The legislation,
administered by the Department of Health and Ageing (DOHA), does two things.
First, it sets out objectives for the aged care sector. These are:
to promote a high quality of care and accommodation for the
recipients of aged care services that meets the needs of individuals;
to protect the health and well-being
of the recipients of aged care services;
to ensure that aged care services are targeted towards the
people with the greatest needs for those services;
to facilitate access to aged care services by those who need
them, regardless of race, culture, language, gender, economic circumstance or
geographic location;
to provide respite for families, and others, who care for older
people;
to encourage services that are diverse, flexible and responsive
to individual needs;
to help those recipients to enjoy the same rights as all other
people in Australia;
to plan effectively for the delivery of aged care services
to promote ageing in place through the linking of care and
support services to the places where older people prefer to live[3]
1.6
Second, the Act underpins Commonwealth funding of aged care. It
establishes principles for funding, stating that it will take account of
quality, type and level of care; the accessibility of care; the outcomes
achieved by service providers; and the need for accountability, both for
funding and for care outcomes.[4]
1.7
The Commonwealth's residential aged care program provides funding for
aged care services. The program is characterised by 'funding, user charging,
and regulatory arrangements that apply across the whole Australian Government
funded residential aged care sector'.[5]
1.8
A 2006 paper summarised funding arrangements for aged care:
[T]he Commonwealth provides approximately three-quarters of the
total funds available (mainly via residential care subsidies and capital grants
to providers). The remaining funding comes from permanent residents in aged
care facilities paying accommodation and daily living charges. Most of the
funding comes via the Commonwealth Department of Health and Aged Care but there
is also specific residential aged care funding via the Department of Veterans’
Affairs for aged veterans.[6]
1.9
The majority of aged care services continue to be provided by
not-for-profit organisations,[7]
with Catholic Health Australia for example being the 'largest non-government
provider grouping of aged care services'.[8]
Approved providers
1.10
In order to receive Commonwealth funding for aged care, the service
provider must be an approved provider.[9]
Approval as a provider of aged care is granted upon application to the
Secretary of the Department of Health and Ageing, provided the service provider
meets certain conditions.[10]
These conditions include that the applicant:
has shown that specific criteria have been met: the capacity to
deliver appropriate standards of care, managerial and financial skills, and
that key personnel are not 'disqualified individuals'.[11]
1.11
'Key personnel' is a term defined in the Act, and, in respect of
applicants for approved provider status, means:
-
a member of the group of people who are responsible for the
executive decisions of the applicant;
-
any other person who is concerned in, or takes part in, the
management of the applicant;
-
any person who is responsible for the nursing services
provided, or to be provided, by the aged care service conducted, or to be
conducted, by the applicant;
-
any person who is responsible for the day‑to‑day operations of an aged care
service conducted by the applicant, whether or not the person is employed by
the applicant;
-
any person who is likely to be responsible for the day‑to‑day operations of an aged care
service that the applicant proposes to conduct, whether or not the person is
employed by the applicant.[12]
1.12
'Disqualified individual' also has a particular meaning under the Act,
and refers to situations where:
-
the individual has been convicted of an indictable offence;
or
-
the individual is an insolvent under administration; or
-
the individual is of unsound mind.[13]
1.13
An approved provider may be a corporation, a state or territory
government, or a local government authority.[14]
Aged Care Assessment Teams
1.14
While the secretary of DOHA makes assessments of care providers to see
whether they qualify to be approved providers, there is also an assessment
process of the individuals seeking care, to determine whether they are eligible
for subsidy, and what sort of care they require.[15]
These assessments are made by an Aged Care Assessment Team (ACAT).[16]
ACATs are generally multidisciplinary teams of health professionals, funded by
the Commonwealth through the states and territories,[17]
as the operational arm of the Commonwealth's Aged Care Assessment Program.[18]
1.15
In 2006, the Council of Australian Governments (COAG) agreed to reform
aspects of aged care delivery, including 'that there be more timely and
consistent assessments for frail older people by Aged Care Assessment Teams and
simplified entry and assessment processes for the Home and Community Care
Program'.[19]
This resulted in a review of the operation of ACAT teams that, while positive
about their role and professionalism, identified issues with consistency of
assessment approach, capacity and timeliness, as well as complexity,
particularly from the point of view of clients and carers.[20]
The Review noted that there may be some unnecessary re-assessments of care needs,
stretching resources that are already in heavy demand.[21]
Accommodation bonds
1.16
One of the key elements of the funding arrangements, relevant to the
bill before the committee, is accommodation bonds. Accommodation bonds are
charges levied on a person when they enter low level approved residential care.[22]
Not all low level care recipients pay these bonds: there is an assets test.[23]
The bonds are held by aged care providers for as long as the person is in care.
The service provider is allowed to draw on the investment income from the bonds
to help fund capital works, debt retirement or, in limited circumstances, to
improve the quality and range of care services.[24]
Unlike accommodation charges, bonds must be refunded (apart from some allowable
deductions)[25]
when the person leaves low level care.[26]
1.17
Accommodation bonds represent a major asset base within the aged care
sector. At 30 June 2007, bonds held by aged care service providers were worth
$6.3 billion.[27]
1.18
The Commonwealth's Aged Care (Bond Security) Act 2006
provides, in certain circumstances, a Commonwealth guarantee underpinning aged
care accommodation bonds in the event that an approved aged care service
provider becomes insolvent.[28]
The bill
1.19
The bill seeks to amend the Act, and the Aged Care (Bond
Security) Act 2006, 'to address current legislative inadequacies and
maintain effective regulatory safeguards for ensuring high quality care for
older Australians'.[29]
It reflects the fact that the legislation is over ten years old, and in that
time the aged care sector has evolved and changed substantially. In particular,
a different model of aged care has emerged, one in which the
owner and operator of a facility have distinct roles and responsibilities and
may function quite separately. The last decade has also seen a significant
increase in the level of investment in the sector from large corporate entities.
The regulatory framework has not kept pace with this shift in business
practice.[30]
1.20
The government has indicated that the bill makes changes to aged care
regulation in three areas: the regulation of approved providers; the framework
for assessments made by Aged Care Assessment Teams; and the protection of
residents' accommodation bonds.[31]
1.21
The regulation of approved providers is to be improved in several ways:
- The bill will link approved provider status to the actual
allocation of aged care places, so that a provider will only be 'approved' once
it actually has aged care places allocated to it, and will only be an
'approved' provider for those services to which funded places have been
allocated.[32]
- The bill will ensure that the regulatory approach to the sector reflects
the realities of the structure of aged care service providers. This will
include allowing the Secretary of the Department to examine related business
entities when making decisions under the Act.[33]
This will also address the possibility that businesses will establish
structures to deliberately limit the transparency of their suitability to
provide aged care, taking advantage of the current structure of the Act.[34]
- The bill will introduce a broader definition of 'key personnel' for
the purposes of regulatory scrutiny, ensuring consideration of the suitability
of everyone who has 'authority or responsibility for (or significant influence
over) planning, directing or controlling the activities of the applicant /
approved provider',[35]
regardless of the structure of the aged care service provider's business.[36]
1.22
The bill will reduce the number of ACAT assessments needed to ensure
that people receiving high level care, respite care or flexible care may
continue to be eligible for that care. Currently, older Australians requiring
these categories of care are generally assessed every twelve months.[37]
The bill will remove this requirement, though 'reassessment should occur at any
stage if there has been a change in the care recipient's care needs'.[38]
1.23
The bill amends both the Act and the Aged Care (Bond Security) Act to
improve the security of accommodation bonds:
Experience with the operation of the Aged Care (Bond Security)
Act 2006 has highlighted that the Guarantee Scheme only operates in regards to
current approved providers and does not protect bonds when the approved
provider status has lapsed or been revoked before the refund declarations have
been made.[39]
1.24
The bill extends the application of the bond scheme's rules (such as
time frames for bond refunds), and also extends the reach of the government's
Guarantee Scheme.[40]
1.25
In addition to these changes, there are a range of other more minor
amendments, such as the introduction of an additional mechanism for
transferring provisionally allocated aged care places in exceptional
circumstances.[41]
Departmental consultations
1.26
The Department advised the committee that the bill had been
the subject of extensive consultation with the aged care sector
through the Aged Care Assessment Program officials and the Ageing Consultative
Committee which comprises peak industry, professional and consumer bodies.[42]
1.27
The Department indicated that some changes were made to proposed
amendments as a result of these consultations. Officials at the hearing
emphasised that the Consultative Committee is very representative of the
industry.[43]
However, in response to committee concern raised during the hearing, DOHA
undertook to write to stakeholders regarding some of the matters raised during
this inquiry.[44]
1.28
DOHA also indicated that two matters have been raised with them since
the introduction of the bill. It had discussed these issues directly with
concerned stakeholders, but also drew these matters to the attention of the
Committee. The first concerned introducing deterrence as a factor in
determining sanctions against non-complying service providers. The Department
indicated that concerns were raised that 'this amounts to punishment and is
inappropriate'. The Department indicated that the purpose of the amendment was
to ensure that action can be taken against non-compliance 'even where there may
be no immediate impact on the health, safety or well-being of care recipients'.[45]
This matter is discussed further below.
1.29
The Department indicated that clarifying material regarding the reforms would
be made publicly available in November 2008.[46]
Clarification in relation to police check provisions and some other matters was
provided to the committee in its supplementary submission to this inquiry.[47]
1.30
Several submitters raised concerns about the public consultations and how
DOHA presented them. Some indicated that they had indeed been consulted, but
wanted to emphasise that they had not, and did not, agree with some of the
proposals they were consulted upon.[48]
Others indicated they had not been a part of consultation processes, and hoped
that the reform process would be delayed to conduct more extensive discussion
and education with the sector.[49]
Support for the bill
1.31
There was support for the measures in the bill. The aged care lobby group
were 'pleased to see that amendments are being made' to the Act.[50]
The Australian Medical Association (AMA) 'supports the measures in the Bill to
reduce the number of unnecessary reassessments for residential respite care and
high level residential care'.[51]
The NSW Nurses' Association believed that the bill 'offers changes that will
benefit care recipients, providers of aged care services and the government'.[52]
The Combined Pensioners and Superannuants Association (CPSA) of NSW welcomed
the changes to the definition of 'key personnel', changes to the operation of ACAT
teams, and new measures to protect residents' bonds.[53]
Aged Care Crisis Team also supported the bill.[54]
Aged and Community Services Australia (ACSA) indicated that changes to ACAT
team operations will be a valuable step forward.[55]
1.32
ACSA also supported some other aspects of the legislation, such as the
linking of approved provider status to the allocation of funded places. ECH Inc
supported the legislation, 'but believes that several aspects of the amendments
require clarification'.[56]
Catholic Health Australia (CHA) provided 'broad support' for the bill, but had
concerns in particular areas.[57]
Issues with the bill
1.33
A number of stakeholders were critical of elements of the bill. ACSA
stated that, while consultation had taken place, 'there was no unanimity
between the Government and other stakeholders on some key points', and there
are areas where they and other stakeholders 'did not support the final version
of the measures proposed in the bill'.[58]
The Aged Care Alliance (TACA) is a Queensland-based industry organisation that
was sharply critical of the legislation.[59]
TACA stated that:
[t]he amendments will impose additional compliance costs upon a
highly regulated sector and will have the effect of further increasing the
level of regulatory complexity and inefficiency. We submit that the rationale
for those particular amendments is flawed and that they represent poor public
policy.[60]
1.34
The main areas in which industry stakeholders had concerns were:
- Increased regulation and red tape generally;
- The effects of an expanded definition of "key
personnel";
- Fears about the expanded and potentially more 'punitive' role of
the Secretary of the Department, such as in respect of imposing sanctions on
providers and in the setting of maximum accommodation bond payments;
- Criteria for, and processes associated with, sanctions and
deterrence functions.
The definition, and consideration
of the suitability, of 'key personnel'
1.35
The current legislation requires the Secretary to consider whether an
applicant for approved aged care places is suitable for the task.[61]
In broad terms, that consideration includes whether the applicant can provide
quality care, whether the applicant can implement sound financial management,
and whether the applicant's 'key personnel' are suitable and experienced.
1.36
'Key personnel' has a particular meaning under the Act. It currently
states that such personnel include:
-
a member of the group of people
who are responsible for the executive decisions of the applicant;
-
any other person who is concerned
in, or takes part in, the management of the applicant;
-
any person who is responsible
for the nursing services provided, or to be provided, by the aged care service
conducted, or to be conducted, by the applicant;
-
any person who is responsible
for the day‑to‑day operations of an aged
care service conducted by the applicant, whether or not the person is employed
by the applicant;
-
any person who is likely to be
responsible for the day‑to‑day operations of an aged
care service that the applicant proposes to conduct, whether or not the person
is employed by the applicant.
(4) A person referred to in paragraph (3)(c) must hold a
recognised qualification in nursing.
The bill proposes to change these arrangements in three
respects.
1.37
First, it would allow the Secretary to consider not only the record of
the applicant seeking to become an approved provider, but also the record of
related approved providers who share key personnel with the applicant.
1.38
Second, it would amend the definition of key personnel. Clause (b),
which refers to 'any other person who is concerned in, or takes part in, the
management of the applicant' would be replaced with 'any other person who has
authority or responsibility for (or significant influence over) planning,
directing or controlling the activities of the entity at that time'.[62]
The intention behind this amendment is to keep pace with changes to business
structures occurring amongst some providers in the sector. The Explanatory Memorandum
states:
As business structures have changed it has become more likely
that control may be exercised over an approved provider by a variety of
individuals and organisations that may be outside the immediate entity that
constitutes the approved provider. For example, an approved provider entity may
form part of a collection of companies managed by another company.[63]
1.39
The government is proposing to amend the legislation to ensure that
those directing or controlling the approved provider, whether or not they might
be considered to be directly managing its operations, are recognised as key
personnel whose decisions may have a bearing on 'the quality of care and the
financial viability of the provider'.[64]
1.40
Third, the bill would provide some guidance as to who are the people
responsible for 'executive decisions' under the first clause of the definition.
The bill indicates that these would include directors of a body corporate if
the applicant is an incorporated entity, and a 'member of the entity's
governing body' in all other cases.[65]
This provision is intended to clarify the application of the 'key personnel'
definition, but not to change it.
1.41
TACA was critical of the proposal to require the Secretary to consider
the record of key personnel in related entities when considering the
suitability of an applicant for approved provider status. TACA stated:
The proposal ignores the existing criteria under the Aged Care
Act 1997 for applications where there are adequate criteria for establishing
the responsibilities of key personnel. It is usual in commercial and service
organisations for the owners to place responsibility on management to meet the
requirements of regulation and compliance.[66]
1.42
TACA was also concerned that the inclusion of 'any other person who has
authority or responsibility for (or significant influence over) planning,
directing or controlling the activities of the entity at that time' was too
broad. TACA suggested this would capture 'all decision-making within the
commercial [entity], including, for example, financiers whose influence, while
essential, would traditionally fall outside what was considered relevant and
operational'.[67]
A number of submitters likewise argued the effect of this section would be
unclear, in particular in respect of its possible extension to members of
church councils in the case of providers that are operational arms of a church
organisation.[68]
1.43
CHA pinpointed the use of the expression 'having significant influence
over' planning, directing or controlling the aged care provider as a particular
issue.[69]
They noted that DOHA was indicating that the measure 'is not designed to
include those sporadically involved in decision making or all leaders within
the organisation, unless they are actively involved in making financial or
managerial decisions which affect the aged care service (eg. Church leaders who
do not involve themselves in the executive decisions of the aged care service'.[70]
They nevertheless were not reassured, arguing that whatever DOHA might indicate
was the intention behind the bill, it will not alter the legal effect of the
provision, which was potentially very broad.[71]
1.44
DOHA indicated that the general wording of this part of the definition
'is based on the accounting standard AASB124: Related Party Disclosures'.[72]
That standard provides a definition of 'significant influence':
The power to participate in the financial and operating policy
decisions of an entity, but is not control over those policies. Significant
influence may be gained by share ownership, statute or agreement.[73]
1.45
The committee believes that some of the industry's concerns are based on
misunderstandings. TACA's first criticism implies that the purpose of this
amendment is to deal with the responsibilities of key personnel. TACA argue,
for example, that 'Serious non compliance by "common key personnel"'
should be rectified by the applicant.[74]
That may well be the case, and is indeed the assumption underlying the existing
non-compliance provisions of the legislation. However, that is an issue
unrelated to the purpose of section 8 of the Act (and bill). This section is
about what the Secretary should consider when determining an applicant's
suitability, not how the entity should be managed, nor how breaches should be
rectified. The committee believes it is appropriate that the Secretary be able
to consider the skills, experience and track record of closely related entities
in the manner envisaged by the bill.
1.46
TACA's second criticism was that revisions to the definition of key
personnel would cast too wide a net. The new definition does potentially
broaden the range of key personnel, but it must be kept in perspective by
remembering the purpose of the clause. These personnel are only being
considered in relation to their suitability and experience as it is relevant to
an application to become an approved provider. If the role of the financiers,
for example, was not 'relevant and operational', then it would not present a
problem for securing approval under the Act. The amendments ensure, however,
that players with the potential to have a significant bearing on the quality or
financial management of aged care do not escape scrutiny altogether merely
because of the nature of providers' business structures.
Missing residents
1.47
ACSA stated that during consultations prior to the introduction of the
bill, both service providers and consumers did not support changes concerning
the reporting to DOHA of unexplained absences of residents from aged care
facilities.[75]
ACSA argued:
There is a risk that in seeking to protect potentially
vulnerable older people we deny them the freedom to take risks available to
other members of the community. We should be very wary of restricting people’s
liberty in order to avoid bureaucratic or political embarrassment. We should
take pains not to inadvertently compound the institutional character of residential
aged care by denying residents the same rights that would be afforded to other
members of the community. While this measure specifically is not part of the Bill
it should nonetheless be opposed and the changes proposed at Item 112 deleted.
Reporting missing persons to the police (and notifying their
relatives, with prior consent) should be sufficient.[76]
1.48
The committee understands that the changes to the Act will make such
reporting possible, and that it is proposed to make changes to the Principles
that will require such notification of DOHA to take place within 24 hours,
adopting the same time frame as used for the reporting of assaults.[77]
The committee believes that it might be desirable in certain circumstances for DOHA
to be aware of absences reported to police, to assist it in monitoring the
operation of aged care homes. It does however accept the concerns of both
industry and consumers, that the rights and freedoms of aged care residents
should not be curtailed, and that these reporting arrangements should not
progress further into unwarranted restrictions on freedom of movement.
Sanctions and deterrence
1.49
The bill contains a number of new provisions relating to sanctions and
deterrence. Currently section 65-2 of the Act sets out conditions for the
Secretary to consider the appropriateness of imposing sanctions for
non-compliance. It currently states:
In deciding whether it is appropriate to impose sanctions on an
approved provider for non‑compliance
with one or more of its responsibilities under Part 4.1, 4.2 or 4.3, the
Secretary must consider the following:
-
whether the non‑compliance
is of a minor or serious nature;
-
whether the non‑compliance
has occurred before and, if so, how often;
-
whether the non‑compliance
threatens the health, welfare or interests of care recipients;
-
whether the approved provider has failed to comply with any
undertaking to remedy the non‑compliance;
-
any other matters specified in the Sanctions Principles.
1.50
The bill proposes three changes to this section. It proposed to add two
new matters for the Secretary to consider when determining whether sanctions
should be imposed:
- A proposed new section 65-2(ca), that would add 'whether the
non-compliance would threaten the health, welfare or interests of future care recipients'
as an additional factor the Secretary can consider.[78]
- a proposed new section 65-2(da), that would add 'the desirability
of deterring future non-compliance' as an additional factor the Secretary can
consider.[79]
1.51
The bill also proposes to indicate that, when weighing up the factors
listed in section 65-2, 'whether the non-compliance threatens or would threaten
the health, welfare or interests of current and future care recipients is to be
the Secretary’s paramount consideration'.[80]
The Explanatory Memorandum states that the purpose of this change is to make it
clear that '[t]he interests of any other party, insofar as they are taken to be
a relevant consideration, must be given less weight than the health, welfare or
interests of current and future care recipients'.[81]
1.52
CHA argued that the focus should be on assisting industry compliance
through 'enabling and incentivising' measures, rather than on clarifying the
criteria for imposing sanctions. It suggested the new provisions 'could have
the effect of resulting in punitive action being taken against operators who
may otherwise be unaware of their new obligations'.[82]
1.53
Concerns were also raised by industry stakeholders about the proposal to
give paramount consideration to particular factors. ACSA believed that this
point indicates 'that the Department need not take the business interests of
the provider, the continuing employment of current staff, or other factors,
into account when considering sanctions'.[83]
It believed that there should be amendment or clarification that would ensure
that the Secretary 'must continue to take a balanced view of all factors into
account'.[84]
TACA made similar observations.[85]
1.54
The committee is aware of some litigation history associated with this
section.[86]
The Department also acknowledged that concerns had been raised during the
consultation process. DOHA stated:
If passed, the legislation would require the Secretary to the
Department of Health and Ageing to consider the desirability of deterring
future non-compliance when imposing sanctions on an aged care service... For
example, the Department may decide it is appropriate to impose sanctions on an
approved provider who fails to refund accommodation bonds, where the refund
amounts have already been paid to former care recipients through the
Government's Accommodation Bond Guarantee Scheme...The amendments to the Act put
beyond doubt the appropriateness of imposing a sanction in such cases in order
to deter future non-compliance either by the sanctioned provider or others.[87]
1.55
Responding to submissions to the current inquiry, DOHA made further comment
on this issue. DOHA highlighted that the objects of the Act are concerned
primarily with 'the protection of the interests of care recipients', and the
changes to section 65 of the Act are designed to make sure that it is put
beyond doubt that this should be the guiding concern in assessing the
appropriateness of sanctions.[88]
1.56
The committee recognises that the use of sanctions or punitive measures
to ensure compliance should be a last resort. It did not receive any evidence
that sanctions or similar measures were over-used. It also notes that there are
other procedures that would be followed before the stage of applying sanctions
is reached. In most cases, an approved provider would receive a notice of non-compliance,
and be given an opportunity to both address compliance issues, and to make a
submission to the Secretary in response to the concerns identified in such a
notice.[89]
If that did not achieve the desired result, a notice of intention to impose sanctions
would be issued and, again, the provider would have an opportunity to respond.[90]
If there was still no satisfactory action taken by the provider, only then
would sanctions be implemented. Furthermore, providers have avenues of review
and appeal against this step in the process.[91]
1.57
In addition, the committee understands that the Aged Care Standards and
Accreditation Agency provides support to the sector in 'identifying best
practice, and providing information, education and training'.[92]
1.58
The proposed changes to section 65-2 do not alter the reasons that
sanctions may be imposed, they merely modify the way the appropriateness of
sanctions is considered. This fact, together with the existing staged process
by which sanctions are threatened, described above, means that there should be
no risk (as suggested by CHA) that approved providers could possibly be unaware
of their obligations.
1.59
The committee endorses the view that the health, welfare and interests
of current and future care recipients should be the over-riding concern in
determining whether sanctions are to be applied against an approved provider.
It believes the additional factors are relevant and appropriate, and the checks
and balances in the legislation are already extensive.
1.60
CHA raised a specific concern in relation to the possible effects of an
approved provider having all of their places revoked as a sanction under the
Act. The Act contains mechanisms by which an approved provider can seek a
review of a decision to implement sanctions against them, including if the
sanction is the revocation of their approved provider places.
1.61
The Act also, in section 10-2(1), states in part that 'If an approved provider
does not provide any aged care during a continuous period of 6 months, the
approval lapses on the day after the end of that period'.
1.62
In 2005, the Administrative Appeals Tribunal upheld a complaint by an
aged care provider against the revocation by the Secretary of their approved
places. The Secretary of DOHA successfully appealed that decision to the Federal
Court. The Federal Court accepted the Secretary's argument that the provider's:
only purpose in bringing the review was to have its approval as
a provider and allocations of places restored to it. This result could not be
achieved because s 10-2(1) of the Act caused the approval to lapse[93]
and therefore their appeal against the Secretary's decision
could not succeed. Because the Secretary's appeal under s.10-2 was successful,
the Federal Court did not examine any other aspect of the AAT's original decision.
1.63
CHA noted that the bill seeks to amend 10-2 in such a way that
as soon as an approved provider with one approved service has
all their approved places revoked, their approval as a provider would lapse.[94]
This raised the possibility that providers would effectively
lose some of their rights of appeal to the AAT because, even if they had a
substantive case, there was no remedy available, as their approved provider
status would have lapsed.
1.64
DOHA indicated that there were legal mechanisms to ensure the appeal
rights would be preserved. It was pointed out that the provider could go to the
AAT and seek a stay of the sanction decision.[95]
If the AAT agreed to this stay, then the provider would be able to seek a
review of the decision and, if successful, could have their places returned to
them. Neither the original, nor the proposed new construction of, section 10-2
will prevent providers getting meaningful review through the AAT, provided they
first seek a stay of the original decision – something the committee
understands the provider involved in the 2005 case did not do.[96]
Police checks
1.65
Submitters raised concerns about possible modifications to the existing
arrangements for police checks of staff working in aged care facilities.[97]
Industry representatives were concerned about both increased costs, as they
must pay for police checks, as well as possible impediments it might create to
bringing in contractors (such as tradespeople) at short notice.[98]
1.66
The committee notes that the details of these changes will be the subject
of regulations that neither the committee nor stakeholders have yet seen.
However, in a supplementary submission, DOHA clarified that 'trades people who
perform work otherwise than under the control of the approved provider (as
independent contractors) will not be required to obtain a police check'.[99]
Other issues
1.67
The AMA had one particular suggestion, which was that GPs be included in
the ACAT assessment process. The committee acknowledges that this may be
desirable, but does not think this is a matter for the Commonwealth's
legislation.
1.68
ACAA were disappointed that there had not been revision of the
provisions associated with subsidy payments following Aged Care Assessment Team
re-assessments of resident care needs.[100]
DOHA acknowledged there were still issues in relation to ACAT administration.
It indicated that the Department is continuing to work on this area, and in
particular that it 'will also review the implementation of the Aged Care
Funding Instrument after 18 months'.[101]
Conclusion
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The committee notes DOHA's explanation of a number of reasons why it is
desirable for the bill to be passed as soon as possible:
First, in response to the joint Commonwealth-State National
Review of Aged Care Assessment Teams, the Minister for Ageing undertook to make
amendments to the Aged Care Act 1997 to remove unnecessary assessments by Aged
Care Assessment Teams (ACATs). In return the Minister intends to seek improved
timeliness of assessments by ACATs. The Australian Government needs to
commence negotiations with State and Territory Governments on the performance
indicators for improved timeliness early next year ahead of the next funding
agreement with the jurisdictions which is due to be agreed by all Governments
by the end of June 2009. States and Territories will not be prepared to agree
to improved performance in the absence of the legislative changes being passed
by the Parliament.
Secondly, the Department has commenced the 2008-09 Aged Care
Approvals Round and will, early in the new year, be assessing the applications
received. The legislation as currently written does not allow the Department
to take into consideration the conduct of related entities when making
decisions on the allocation of aged care places. Given that there are a number
of large organisations that have established multiple approved provider
entities under their management banner, but essentially operate as the one
entity with the parent organisation pulling the strings, the Department should
be able to consider any issues, particularly serious compliance problems, that
have occurred within the whole group when assessing applications. Legislative
amendments in the Bill are required to allow this.
Thirdly, it came to light through experience in the first
operation of the bond guarantee scheme that the scheme does not cover bonds
held by former approved providers. As providers may hand back their approval
at any time, or it there is a very serious issue the Department should revoke
approved provider status, there is potentially a situation where accommodation
bonds are no longer covered by the scheme and this could arise at any time.
This needs to be remedied as soon as possible.[102]
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The committee believes that, as the aged care services sector grows and
evolves, this legislation is a valuable step to ensure that legislation and
regulation designed to protect residents will keep pace with that evolution.
1.71
The committee does however wish to emphasise the concerns of both
industry and consumers, that the rights and freedoms of aged care residents
should not be curtailed, and that the reporting arrangements envisaged under
the legislation, regarding missing persons, should not progress further into
unwarranted restrictions on freedom of movement.
Recommendation 1
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The committee recommends that the bill be passed.
![Signature](/~/media/wopapub/senate/committee/clac_ctte/completed_inquiries/2008_10/aged_care_amend_2008_measures_no2/report/c01_1_jpg.ashx)
Senator Claire Moore
Chair
November 2008
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