Aged Care Update
By Alison Choy Flannigan, Partner, Co-Lead, Health & Community
The Aged Care and Other Legislation Amendment (Royal Commission Response) Act 2022 (Cth) (Royal Commission Response Act 2022) was passed on 5 August 2022, which continues the implementation of the former government’s aged care reform measures.
The Royal Commission Response Act 2022 (Cth) introduced several amendments to the aged care regulatory framework, including provider governance.
This article analyses recent aged care reforms.
Aged Care Act reforms
On 1 March 2021, the Government announced work had begun on a new consumer-focused aged care Act.
The new Act is planned to come into effect 1 July 2023, subject to parliamentary processes. It provides a basis for reforms and cultural change with a focus on responding to the needs of senior Australians.
On 1 July 2021, the Aged Care and Other Legislation Amendment (Royal Commission Response No. 1) Act 2021 (Royal Commission Response Act No. 1) came into effect. The Royal Commission Response Act No. 1 implemented the first set of urgent recommendations by the Royal Commission. The Royal Commission Response Act No. 1 includes amendments to:
- give stronger controls over the use of restrictive practices, such as chemical and physical restraints, to ensure they are a last resort;
- conduct assurance reviews of home care providers to ensure funding is used to deliver services to senior Australians; and
- abolish the requirement for the Aged Care Financing Authority (ACFA) and create a new advisory body for aged care financing issues.
The Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021 (Royal Commission Response Bill No. 2) was introduced into Parliament on 1 September 2021.[1]
However, on 11 April 2022, the Royal Commission Response Bill No. 2 lapsed at dissolution after being referred back to the House of Representatives from the Senate.
On 5 August 2022, the Aged Care and Other Legislation Amendment (Royal Commission Response) Act 2022 (Royal Commission Response Act 2022) was passed, which continues the implementation of the former government’s aged care reform measures.[2]
The Aged Care Amendment (Implementing Care Reform) Bill 2022 was also introduced on 27 July 2022, which implements additional reforms.[3]
The Care Amendment (Implementing Care Reform) Act 2022 includes three further Royal Commission Recommendations. The Act includes amendments to:
- include registered nurses being onsite 24 hours a day, seven days a week;
- give the government the power to cap home care package feeds and remove exit fees; and
- publish information on what providers spend on care, nursing, food, maintenance, cleaning and administration, and profits.
The provisions set out in the Royal Commission Response Act 2022 include:
Amendment |
Description |
| New residential aged care basic subsidy calculation model | The Act introduces the Australian National Aged Care Classification (AN-ACC), which is set to replace the Aged Care Funding Instrument. It is proposed to commence from 1 October 2022. |
| Star ratings | The Act introduces a system of starred ratings for all Residential Aged Care Providers. |
| A new code of conduct | The Act provides the authority for a Code of Conduct to be established in legislation and to apply to all workers and key personnel of approved providers of aged care. The Bill also supports the development of an agreed and enforceable code of conduct for the care and support sector. |
| Expanding the Serious Incident Response Scheme (SIRS) to homecare | The Act extends the SIRS to in-home aged care services, including flexible care delivered in a home and community setting. The Act also introduces new responsibilities for in-home care providers to manage and prevent incidents and includes protections for whistle-blowers in this setting. |
| Improved provider governance | The Act introduces new governance responsibilities for approved providers regarding membership of their governing bodies, the establishment of new advisory bodies and measures to improve leadership and culture. It includes new reporting requirements to assist customers and families to understand the operations of providers. |
| Improvement of information sharing | The Act improves information sharing between regulators across the aged care, disability and veterans’ affairs sectors. |
| Greater prudential requirements relating to residential accommodation deposits and bonds | The Act implements a component of phase 2 of the financial and prudential monitoring, compliance, and intervention framework for the aged care sector. Phase 1 was implemented on 1 July 2021. Phase 2 was implemented on 1 July 2022. Phase 3 will be implemented from 1 July 2023. |
| Expansion of Independent Hospital Pricing Authority to include aged care | The Act expands the functions of a renamed Independent Health and Aged Care Pricing Authority to provide pricing advice to the Government on aged care and general health care matters. |
| Implementation of measures to allow information sharing in regard to restrictive practices | The Act revises the strengthened arrangements on the use of restrictive practices to address unexpected outcomes from the first Bill in relation to the interaction between state and territory guardianship and consent laws. |
What is the difference between Royal Commission Response Bill No. 2 and the Royal Commission Response Act 2022?
The content of both pieces of legislation is predominantly the same, except for a few differences, including changes to Schedule 2 and the introduction of Schedule 9 – Restrictive practices.
Previously, Schedule 2 in Royal Commission Response Bill No. 2 provided for ‘Screening of aged care workers, and governing persons, of approved providers‘.
This proposed amendment implemented a registration scheme which would provide for nationally consistent pre-employment screening for aged care workers of approved providers to replace existing policy checking obligations.
In the Royal Commission Response Act 2022, this proposed amendment was removed, and Schedule 2 is now ‘Star ratings‘:
The introduction of star ratings was one of the Royal Commission’s key recommendations.
It is designed to support consumers to make informed choices about their care.
The new Schedule 2 provides:
86-11 Publishing star ratings for residential care services
- The Secretary must publish information about:
- the quality of residential care provided through residential care services; and
- the performance of approved providers of such services in relation to responsibilities and standards under this Act. …
The planned roll out date remains by the end of 2022.
Residential aged care services will have an overall star rating, as well as a star rating against four sub-categories:
- five quality indicators (15%): This category will evaluate the facility’s information on pressure injuries, physical restraint, unplanned weight loss, falls and major injury and medical management. The information will be gathered through the existing program for the five quality indicators.
- service compliance ratings (30%): This category will evaluate the audit and assessment data provided by the Aged Care Quality Safety Commission, which is used in the ratings on My Aged Care. This will be the same information that currently constitutes the ratings on the My Aged Care website, which comes directly from the Aged Care Quality and Safety Commission.
- consumer experience (33%): This category will incorporate the consumer experience information on My Aged Care previously collected by the Commission. Initially, the information will come from previous consumer experience information collected during accreditation visits. The rating will be renewed with surveys of 20% of residents conducted by a third-party organisation.
- staff care minutes (22%): This category will use the care minutes that will be reported through the Quarterly Financial Report on a quarterly basis and used in the AN-ACC funding classifications.[4]
Other amendments implemented by the Royal Commission Response Act 2022 include:
Schedule 3 – Code of conduct and banning orders
These amendments will allow the Aged Care Quality and Safety Commission to make and enforce a Code of Conduct that will apply to approved providers and their workers, including governing persons.
The Commission will have the power to take enforcement actions for breaches of the Code, which includes the introduction of banning orders.
There will be civil penalties for non-compliance with the Code for both individuals and corporations where an approved provider is a corporation and there is a failure by an employee or governing person to comply with the Code.
Schedule 5 – Governance of approved providers
The approved provider must ensure that a majority of the members of the governing body are independent non-executive members (s63-1D (2(a)) – unless the board has less than five members and less than 40 care recipients or determination applies.
The approved provider must ensure at least one member of the governing body of the provider has experience in the provision of clinical care (s63-1D(2(b))) – except where the board has fewer than five members or determination that the requirement does not apply.
The approved provider must establish a quality care advisory body (s63-1D(5)) – quality of aged care provided.
The approved provider must also establish a consumer advisory body (s63-1D (7)).
For wholly owned subsidiaries, it is a responsibility of the approved provider to ensure that the constitution of the provider does not authorise a director of the provider to act in good faith in the best interests of the holding company (s63-1H).
Schedule 9 – Restrictive practices
This Schedule provides for immunity from civil or criminal liability in relation to the use of a restrictive practice for ‘protected entities’. The relevant section of the Royal Commission Response Act 2022 is section 54-11:
54-11 Immunity from civil or criminal liability in relation to the use of a restrictive practice in certain circumstances
This section applies if:
- an approved provider provides aged care of a kind specified in the Quality of Care Principles made for the purposes of paragraph 54-1(1)(f) to a care recipient; and
- a *restrictive practice is used in relation to the care recipient; and
- the care recipient lacked capacity to give informed consent to the use of the restrictive practice.
- A *protected entity is not subject to any civil or criminal liability for, or in relation to, the use of the *restrictive practice in relation to the care recipient if:
- informed consent to the use of the restrictive practice was given by a person or body specified in the Quality of Care Principles made for the purposes of this paragraph; and
- the restrictive practice was used in the circumstances set out 2 in the Quality of Care Principles made for the purposes of paragraph 54-1(1)(f).
- Each of the following is a protected entity:
- the approved provider referred to in paragraph (1)(a);
- an individual who used, or assisted in the use of, the *restrictive practice in relation to the care recipient referred to in that paragraph.
Aged Care Amendment (Implementing Care Reform) Bill 2022
The Aged Care Amendment (Implementing Care Reform) Bill 2022 proposes to amend the Aged Care Act 1997 to:
-
- require approved providers of residential care and certain kinds of flexible care to ensure a registered nurse is onsite and on duty at all times at each residential facility operated by them;
- enable the capping of prices that approved providers of home care can charge care recipients and remove the home care providers’ ability to charge exit amounts; and
- require the secretary to publish information in relation to aged care services.
Whilst passed by both houses, on 28 July 2022 the Senate referred the provisions of the Aged Care Amendment (Implementing Care Reform) Bill 2022 to the Community Affairs Legislation Committee for inquiry and report by 31 August 2022. On 31 August 2022, the reporting date was extended to 2 September 2022.
Approved providers, their boards and executives should be preparing for the new regulatory requirements if they have not already commenced preparations. There are some areas which require clarification when the relevant regulations and rules are published.
[1] Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021[2] Aged Care and Other Legislation Amendment (Royal Commission Response) Act 2022
[3] Aged Care Amendment (Implementing Care Reform) Bill 2022
[4] Dept of Health and Aged Care reveals makeup of new residential care star ratings set for December