Consultation commences on new residential care funding model

The Department has released the long-awaited consultation paper for a proposed new funding model for residential care.

Providers have been given until the end of May to respond to the consultation, which focuses on a new model and funding system referred to as the Australian National – Aged Care Classification AN-ACC) recommended by the Australian Health Services Research Institute (AHSRI).

The recommendation follows AHSRI’s work analysing the relative cost drivers in the sector and development of a new tool for assessing resident funding needs as part of its Resource Utilisation and Classification Study (RUCS) throughout the course of 2018.


The AN-ACC assessment and funding model is based on six key design elements:

1. Resident assessment for funding to be separate from resident assessment for care planning purposes;

2. Assessment for funding purposes to be undertaken by external assessors capturing the information necessary to assign a resident to a payment class;

3. 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;

4. 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;

5. 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;

6. A variable price per day for the costs of individualised care for each resident based on their AN-ACC casemix class.

There are three components to AHSRI’s proposed funding model:

a. a fixed payment for shared costs;

b. a variable payment for individual resident costs; and

c. an adjustment payment for entry costs.

Under the AN-ACC the subsidy paid to the provider would consist of a fixed component and a variable component for each resident.

Providers would also be paid an adjustment payment on a time-limited basis when a new resident enters the facility.

AN-ACC Version 1.0 comprises 13 classes and explains 50% of the variance in the cost of individual resident care. There is a five-fold variation in cost between the least and most expensive AN-ACC class.

Under the AN-ACC model, care planning is still undertaken by the facility but the assessment for funding is undertaken by an external and independent assessor.

Residents will be classified into classes using the AN-ACC Assessment Tool developed during the RUCS by the AHSRI. This assessed the resident using a series of questions and tools to determine the resident’s classification.

The tool has been designed to capture the core attributes that drive care costs in residential aged care.

It is designed to be robust and concise and is able to be undertaken by an external expert clinician who is not familiar with the resident.

It has been recommended assessments be undertaken within four weeks of entry into care and carried out by external assessors should be credentialed registered nurses, occupational therapists or physiotherapists who have experience in aged care and have completed approved assessment training.

Reassessment would only occur in three instances:

1. Significant hospitalisation: resident is hospitalised for five or more days or resident has a general anaesthetic and is in hospital for two or more days.

2. Significant change in mobility: a resident’s mobility capacity has changed such that they move between the three mobility branches in the AN-ACC.

3. A standard time period for re-assessment: a facility may request a reassessment after a specified period of time if believed needed.

Earlier this month the Minister for Senior Australians and Aged Care, Ken Wyatt AM announced funding of $4.6 million for a trial of the new assessment tool developed as part of this study.

In addition to the summary of AHSRI’s proposed new model contained in this discussion paper and the particular issues identified in this paper providers are encouraged to consider the AHSRI’s seven detailed reports from the RUCS study, available at the department’s website.

Submissions are due by Friday 31 May 2019 and can be provided using the Department of Health’s Consultation Hub.

LEAVE A REPLY

Please enter your comment!
Please enter your name here