The search for alternative models to ACFI is in progress, says department

October 21, 2016

Work to take the assessment of aged care funding from the hands of providers is underway with the government commissioning the University of Wollongong to identify alternatives to the beleaguered Aged Care Funding Instrument (ACFI).

Department of Health officials told a Senate estimates hearing on Wednesday that experts at the university had been engaged to review international models of assessing care needs, as well as funding methods used in related sectors such as the health and hospital system.

Nigel Murray from the department’s aged care policy and regulation branch said the department would consult with the sector on the options identified and consider undertaking a trial of different funding models.

Dr Margot McCarthy, deputy secretary of the ageing and aged care group, said that producing a new funding tool was not something that should be rushed, but the intention was to certainly move at quicker pace than the five years it took to develop ACFI.

The department confirmed it would not be undertaking a cost of care study in conjunction with developing an independent model of funding assessment.

The Federal Government first proposed moving to an independent method of assessment in its May budget, when it also controversially cut the Aged Care Funding Instrument by $1.2 billion due to a blowout in the tool’s projections – the second in five years.

Dr Nick Hartland, first assistant secretary aged care policy and regulation, said providers carrying out funding assessment was a structural problem in the system that had to be addressed because it created incentives that were difficult for the government to control.

He said the department did not hold the view that providers were engaging in fraudulent behaviour in relation to ACFI claiming but ambiguities in the instrument made it possible to “code people up”.

Alongside plans to revise how care funding is assessed, the department confirmed it was currently in talks with stakeholders on other ways to achieve the same amount of budget savings. However, this did not mean that the sector endorsed the clampdown on ACFI growth.

The department also revealed that it had examined the modelling that had been undertaken by the sector on the effects of the ACFI changes, but remained convinced its estimates were correct.

Dr Hartland said sharing the parameters of the department’s modelling with the sector was a “highly unusual step” because the information contained budget-in-confidence material, but was done so to keep faith with a commitment made by Assistant Minister for Health and Aged Care Ken Wyatt.



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