Home care pricing to be published

Home care providers have until the end of November to publish pricing information relating to the services they offer, including any administration and case management fees.

But it will be a further six months before full transparency and information comparing pricing will be available on the government’s My Aged Care website.

In a move not unlike that imposed on the superannuation industry that took at least 20 years to get to a point where consumers could compare apples with apples, it could take a while before home care package recipients really understand whether they are getting value for money.

In the meantime some providers seem to be having a field day with high administration charges, hidden case management fees and the charging of GST when they are not supposed to.

Complex statements, making it difficult to work out the different fees and charges for a range of services, are not helping transparency.

When the government implemented its Increasing Choice in Home Care reforms in February 2017, providers of government-subsidised home care packages were given approval to charge administration fees to cover overheads and costs such as insurance, workers compensation, care co-ordination and travel.

Most also charge a case management or core advisory fee and some have a contingency fee.

Last year it became mandatory for providers to publish any exit fees, an amount ranging from zero to $1000 which can be charged if someone decides to switch providers.

Fees not regulated

Price is only one consideration to take into account when comparing services, says Pat Sparrow.

None of the fees are regulated and can differ between providers. All of them ultimately eat into the amount of money individuals have to spend getting help.

Typically the administration fees are calculated as a percentage of an individual’s home care package and range from 20 per cent to 45 per cent. These are on top of a monthly case management fee of anywhere between $50 and $500 depending on the package level.

There are four levels of home care package which gives those eligible four levels of an annual budget to spend on the care and services they need to help live independently in their own home for as long as possible.

The budget levels range from $12,077 a year for a level one to $54,093 a year for a level four. The most common package is a level two worth $18,852 a year.

These amounts include the basic daily fee which is a co-contribution paid by package users irrespective of the level. It is set at 17.5 per cent of the single age pension and is now $10.43 a day.

Income-tested fees are payable when clients’ income exceeds certain thresholds but are capped at $5446 a year for part pensioners and $10,892 a year for self-funded retirees.

Depending on an individual’s care needs, the services they are receiving and the rate being charged for the services, the actual hours of help which are covered by the package often fall way short of what is needed to stay at home indefinitely – which is why every cent can count.

The estimated weekly care hours covered by a level four package, the highest level, is about 12-14 hours and four to six hours for a level two.

Under the guidelines for delivering care, providers are supposed to tailor a package to an individual’s care needs and other services needed to stay at home as long as possible.

Bundling problem

With some providers starting to bundle services, with categories such as gardening or information technology, it becomes even harder to compare like with like or even get the services really needed.

Providers must give clients a monthly statement showing a breakdown of available funds, how the funds are spent, any contribution they are making and the balance of any unspent funds.

However, there is no regulation on how the statement must look, making it challenging to understand exactly what services are being delivered and at what cost.

With the national queue for home care packages blowing out to more than 100,000 and the wait for subsidised help at all levels at least six months, many people are having to pay privately for extra care.

Daughterly Care chief executive and co-founder Kate Lambert has been scrutinising the statements of approved providers ever since she discovered several of them were inflating her private care prices and even hiding their additional 10 per cent case management fee inside the external care supplier’s fee.

She says the greatest shock was the extent to which the not-for-profit and charity-based organisations masked their costs, including disclosing one thing in the home care agreement but presenting something different in the monthly statement.

Lambert has also been warning clients to check their monthly statements to ensure GST is not being deducted from their home care service which is against published government guidelines.

Government-funded home care is GST-free and the provider claims back the GST from the Australian Tax Office each month.

Informed choices

Aged and Community Services Australia chief executive Pat Sparrow says its provider members support improved transparency so consumers can make informed choices about their options for home care services.

Sparrow says changes to home care pricing to create transparency and comparability must ensure the diversity of services and supports are showcased, otherwise it will limit consumer knowledge of what’s possible and, through that, the choices people make.

Price is only one consideration to take into account when comparing services, she says.

Superannuation funds had to be forced into full disclosure to ensure that much of the available information around choice and cost was available to all customers.

Remember, it is the elderly or their busy adult children who are generally the ones trying to choose and compare home care providers and understand exactly what’s available to them.

Bina Brown is director of aged care solutions company Third Age Matters.

AFR Contributor
This article first appeared in the AFR 24.11.18