New ‘clarion call’ for providers, consumers to maximise package use

July 14, 2016

Managing unspent funds in home care packages continues to be on ongoing issue for providers ahead of the February 2017 changes with new data showing up to a quarter of some packages has not been spent.

Accounting firm StewartBrown urged providers to implement strategies to reduce current levels of unspent funds and minimise the impact of the February 2017 changes where accumulated funds will move with the client or be returned to government.

The financial performance survey, which collected data from 400 home care programs in the March quarter, showed average unspent funds ranged from 24 per cent in lower level packages to 8 per cent in higher level packages.

However, the firm said there were positive signs providers were taking steps to respond to the new treatment of unspent funds from next year, with revenue utilisation rates from packages improving on the previous quarter.

Patrick Reid

Patrick Reid, director of aged care, community and disability with StewartBrown, said substantial unspent funds were a concern because of the impact on the profitability of providers and ability of consumers to benefit from necessary services.

Mr Reid said a consumer attitude of ‘saving for a rainy day’ meant clients were not maximising their package according to their assessed need.

“This is really a clarion call for both consumers and providers to review the services that they are providing or receiving and making sure they are maximising the package before February 2017,” he told Community Care Review.

From next year, any unused funds will need to be returned to the consumer or government when a person permanently leaves their package. In the event a client switches providers, any unspent package funding will also move with them.

Previously, many providers relied on the retention of unspent funds as a source of revenue, which will no longer be the case from February 2017.

Revenue utilisation from packages across StewartBrown surveys

“The changes to the rules should certainly motivate providers to encourage care recipients to utilise more of their package. This should benefit the care recipient and it should also benefit providers as this will make a greater contribution to the recovery of fixed overheads,” said the home care report update released last week.

Significant levels of unspent funds coupled with poor consumer uptake of Level 1 packages could have substantial financial implications for some home care providers, Mr Reid said.

According to the survey data, low-level packages are underutilised, with Level 1 packages averaging 76 per cent occupancy.



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