1. Presented by Lorraine Poulos For Aged and Community Services Victoria
Organisational Financial Implications of Consumer Directed Care in Home Care Packages
Presented by
Lorraine Poulos
For Aged and Community Services Victoria
Lorraine Poulos and Associates

2. Acknowledgement of traditional owners Background to presentation
Thank you
Acknowledgement of traditional owners
Background to presentation
Lorraine Poulos and Associates
© 2013 Lorraine Poulos & Associates

3. Disclaimer
LPA take no responsibility for business decisions based on todays presentation
All providers are encouraged to seek legal and financial advice about any major financial decisions that may be need to be taken following this presentation
Your peak body in your state is the most valuable advocate or source for any questions or concerns relating to CDC and community care matters
Lorraine Poulos and Associates

4. This presentation Look at possible financial implications
Consider what other providers are doing
Challenges
Opportunities
The importance of recognising the implications if CDC is introduced into all of aged care
Most significant change in community aged care in history of care provision
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5. Brief History Aged Care- Community Care
2002 – Review of community programs nationally
2004- The Way Forward- a consultation for improving Community Care
2006- Decision by COAG to streamline systems and services
2007- Commonwealth agrees to manage aged care from 2012
2010- Consumer Directed Care pilots began
2011- new Community Care Common Standards (Home Care Standards)and accountability system
2011 – Productivity Commission into aged care
2012- All HACC and other community aged care programs report to and managed by DoHA – DSS (WA and Victoria delayed transition)
2013- Living Longer Living Better Aged Care Reforms
2013- CDC for new packaged care consumers
2014- Australian Quality Aged Care Agency
2014- Income testing for home care consumers
2015 – all packaged care to be CDC
2015-New HSP and CSC, My Aged Care Website etc.
2015- National Fees Policy for all community services
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6. Background to CDC in Australia
HACC services included case management services
Original CACPs in mid 1990s were to be a combination of case management and at least 2 other home care (HACC) services e.g. personal care, domestic assistance etc.
Packaged care was always intended to be an individualised model of care
and not ‘Block funded’ ( provider paid a sum of money to provide a number of outputs or services)
Overseas models in UK, USA and NZ identified benefits to consumers as their care needs change if they have more involvement and access to unspent funds
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7. Background
Some providers have always operated CACPs or HCP as ‘individualised’ budgets
This has led to confusion with consumers, ACATs, other providers
Inconsistencies in service delivery
Providers have been able to use ‘unspent’ funds at the end of the financial year to support other infrastructure or higher levels of service
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8. Brief overview of CDC 1000 were in operation across Australia 2010-12
Pilot learnings:
Choice, control and flexibility
Un-bundle Case Management from care
Consumers manage with right tools, support and environment
Consumers not always spending allocations
KPMG report Department of Social Services website
(remember this is the Pilot report)
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9. Financial implications of CDC
Consumers are assessed and have the power of choice- Consumer Directed Care- but providers will “hold the funds…not be funded”
Margins or ‘profits’ have reduced or are unable to be planned for unless it is included in administration levy, unit cost for core advisory and direct care work provided by your own organisation
Returns on Investments may have to be adjusted
Requires a commitment to technology and assistive devices
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10. Financial implications of CDC
Expectation that consumers will contribute to their care
AP will have to collect fee from consumers based on Centrelink assessment
Finance department now spending more time on the day to day processes in Home Care
Policies need to be clear about agreements, non payment of fees, equipment purchases, using other providers, cash transactions, negotiations with admin charges etc.
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11. Biggest Change
An organisation will have to be transparent to the consumer what it is they are paying for in the area of administration, ‘case management’ or co-ordination and the unit costs of care and services
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12. New Home Care Package subsidies
Home Care Level 1 – a new package to support people with basic care needs- around $7,500 pa
Home Care Level 2 – equivalent to the existing CACP- around $13,600 pa
Home Care Level 3 – a new package to support people with intermediate care needs- – around $30,000 pa
Home Care Level 4 – equivalent to the existing EACH package around $45,500 pa
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13. Individualised Budget
Monthly statement
Format must be able to be understood by consumer
Must have income and expenditure line items
Time period agreed for review
Provider must keep a budget for each client regardless of the consumer’s desire or capacity to be involved in their budget
Must provide a monthly statement to consumer or Person Responsible
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14. Income components
Income must identify the total funds available including:
Full subsidy amount
All supplements e.g. Dementia, DVA, Oxygen, Homelessness
Consumer contribution
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15. Expenditure Grouped into 3 categories:
Administration costs- (rostering included)
Core advisory and care management services
Service and support provision and/or purchasing
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16. Contingency fund
Budget may include a small contingency fund for emergencies, unplanned services.
This must be no more than 10% of the total budget
Must be clearly identified in the budget and regular statement
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17. Unspent funds
Change of package from 1-2 band to 3-4 band- funds move with the consumer
Moving provider- unspent funds can be retained by the provider
Excess leave – there is discretion for provider to make the funds available for consumer later
Subsidy reduces to 25% if leave is exceeded and package to be protected
There is discretion for provider to agree to transfer unspent funds to another provider
Unspent funds on cessation remain with provider-(no real data on what this amount may be or what may happen if DSS reduces annual subsidy)
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18. Income testing implications
Current funding (Grandfathered whilst consumer remains on program)
Contribution fee 17.5% pension ( approximately $9.70 day)-NOT ALWAYS CHARGED
PLUS
DSS payment per day depending on Level 1,2,3,4
This is regardless of whether they are Part Pensioners or Self Funded Retirees
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19. Contribution fee 17.5% pension ( approximately $9.70day) PLUS
Pensioner
Contribution fee 17.5% pension ( approximately $9.70day)
PLUS
Funding paid DSS depending on Level of HCP
Expected that provider will charge the $17.5% contribution fee and consumers will have to complete a financial hardship form if they cannot afford to pay- (Many providers reducing the fee due to occupancy issues)
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20. Contribution fee 17.5% pension ( approximately $9.70 day) PLUS
Part Pensioner
Contribution fee 17.5% pension ( approximately $9.70 day)
PLUS
Income tested fee up to $5000 for part pensioner ( approximately per day $95 per week)
Difference paid by DSS depending on Level of HCP
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21. New Income splits post July 2014 for NEW consumers
SFR
Contribution fee 17.5% pension ( approximately $9.70 day)
PLUS
Income tested fee up to $10,000 per year ( approximately per day or $ per week)
Difference paid by DSS depending on Level of HCP
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22. Basic Accounting Terms & Concepts staff at service level need to understand
Accrual Accounting vs Cash Accounting (very important once income testing commences)
Individualised Budget- what is it ? Who will do it with consumer?
Unit Cost- do we know what it is? What about if consumers do not use our service?
Contingency Fund- how much will DSS allow it to be?
Budget / Income & Expenditure- this needs to be monitored regularly
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23. Checking your overheads
Administration costs – reflect establishment costs for the organisation and would also include the costs of meeting government quality and accountability requirements. Administrative costs include:
insurance and government reporting
corporate overheads
capital costs
ongoing research and service improvement
CDC administrative overheads including staff and IT
developing statements and other consumer communication
establishing contracts with sub-contracted providers
setting up and cancelling appointment ( i.e. rostering) Page 37 HCP guidelines)
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25. Feedback continued:
No guidance on acceptable administration fee from DSS or level of unspent funds that can be retained each year and ‘rolled over’ e.g. Level 4 may have a high retention of funds
Transition issues (from non CDC to CDC) when providers are trying to charge a daily fee when they may have been asking for an hourly contribution (e.g $5 per hour ) or not been collecting fees at all!
Accounts departments not understanding the changes and the impact on occupancy and budgets
Only allowed to charge one month fees in advance (DSS recent briefings)
Level 1 and 2 packages very hard to fill – given the daily fee requirement
Concern potential clients/consumers will say NO when fees are required
Feedback about consumers who are now questioning what has been done with their allocated fees in the past i.e. 1-2 hours and no case management
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26. Check list for providers
Check your past occupancy and average hours etc. to establish some budget assumptions
Client agreement – gain legal advice and ensure all requirements as per the Home Care Package guidelines are included
Do you have a brokerage template?
Have your staff received training in CDC and person centred care?
What is your risk management processes and are they robust enough for consumers to be able to make choices that do not impact on your duty of care whilst recognising their right to choice in CDC ?
What changes need to be made to your care plans to reflect the value and role of your ‘case management’?
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27. Gain some advice and assistance with establishing your unit costs
Accounting and budget software- ensure the system used meets the needs of the program i.e. monthly ‘budget’ roll over and itemised hours etc. as per guidelines
Have you separated your coordination (rostering) and case management costs to establish what your unit cost may be for the case management component of your services in line with Home Care package guidelines? (this may be called support and advisory services)?
Gain some advice and assistance with establishing your unit costs
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28. What is your administration fee
What is your administration fee ? Will it differ for each level of package? Will it be a flat fee or a % of the income?
Decide what your ‘business’ rules will be e.g. are kilometres included in your unit cost for care workers? Who pays for equipment maintenance?
What other providers will you be working with and what are your requirements when entering into an agreement with them?
What is the protocol for staff to make purchases or consumers who wish to manage their own package? What if a client wants to ‘bargain’ for a cheaper levy ?
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29. Will you allow contingency funds to be transferred to another provider if the consumer requests this?
Does your Board or management committee understand the contingency funds ‘roll over’ each year and are no longer ‘profit/surplus’ for the organisation?
What is your debt collection process for community care and under what circumstances will you continue or discontinue providing care if a consumer refuses to pay? ( remember to refer to the Aged Care Act for guidance)
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30. Other matters Case management skills Financial conversations
Meaningful solutions
Taxi vouchers, crock pots, assistive technologies
Culture change
E tools Russell Kennedy, GGJones
Fixed cost and variable incomes
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31. Other matters Scenario budgets with and without fees Unspent funds
ITA and the lifetime cap 60K
Non charging of fees
E tools MYOB live - $900 and $800 – 50 HCP
40K plus for software programs
Office 365 access
Rostering co-ordinators similar to DCW
Case management and core advisory examples
Lower fees or no fees – level 1 and 2
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32. Other matters Case scenario planning – 50% occupancy
Marketing – five clicks on website
Brochures
Home Care today – information for consumers
Examples of HCP being taken up very quickly/slowly
Fees policy and non charging of fees
Training expenses
Financial skills of staff
Interface between finance and co-ordinators/home care service
ITA – lifetime cap – how to ‘sell this’
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34. Thank You Further details contact lorraine@lorrainepoulos.com.au
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