2017 Review of the Aged Care Funding Instrument

A report commissioned by the federal government to review the way residential aged care is funded was released in June 2017. Funding is currently allocated through the Aged Care Funding Instrument (ACFI) which determines the funding residential aged care providers receive for providing personal care and nursing for each resident.

The government’s current outlay on aged care is $18.6 billion, expected to rise to $22 billion by 2021, and the government wants to rein this back to a more sustainable (i.e. lower) level.

The ACFI model of funding measures the need for care, not actual care provided when determining funding, with a mechanism for moving a resident from lower care to higher care when the need is assessed.

As the ACFI subsidy is means tested the government expected a significant contribution from residents. This has not occurred, and income tested fees have had only a small impact (3 per cent) on the subsidy and the subsidy provided has grown faster than expected.

Analysis showed that the length of stay by residents is increasing and they are getting older but sicker. The proportion of residents funded in the highest classifications is increasing each year, so that it now represents more than 50% of ACFI funding.

The review recommended that new classifications be added with revised rating scale predictors. A new category of Physical Therapy was also recommended with all residents being eligible with funding being sourced from the Complex Health Care (CHC) classification.

What is obvious is that the ACFI will undergo some change – probably ongoing – as the government tries to get maximum benefit from the funding provided with little or no rorting of the scheme whilst requiring residents to provide a larger proportion of the funding.

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