With just 63 business days until the new Program is due to begin, home care providers still await critical detail in the new rules, especially around pricing, co-contributions, and communication with clients. Is the sector ready for the fallout?
With major details of the new Program yet to be revealed by the Government, many providers are understandably feeling behind in terms of preparation and risk management.
Despite the release of the 209-page Support at Home manual on 12 March, there is still a lack of information around key issues such as pricing, clients service agreements, subcontractor agreements and more.
While much of the focus is on technology readiness, the bigger challenge is the human impact –educating customers, families, and staff.
The manual mentions that a new agreement will be required for all care recipients under Support at Home, even those under the old rules, starting in July.
Operators will also need to manage three different customer cohorts from 1 July:
- Grandfathered home care clients who, on 12 September 2024, were either receiving a Package, on the National Priority System, or assessed as eligible for a Package. They will be subject to the Government’s ‘No Worse Off’ principle and will not be required to contribute more, even when reassessed into a higher Support at Home classification at a later date.
- Transitioned home care clients who transition to Support at Home on 1 July 2025. This also includes older people who were on the National Priority System before 1 July 2025 but had not received a Package.
- New clients who entered the system after 12 September 2024, who are subject entirely to the new regime and will need to contribute to the cost of their Independence and Everyday Living services – which may lead to a shift in consumer behaviour where Support at Home Funds are used for clinical services.
90,000 hours to communicate changes to clients
Prue Bowden (pictured below) is the CEO of Australian Unity’s Home Health division, which is Australia’s largest home care provider with over 25,000 clients.
“We have estimated that it will take 90,000 additional hours for us to regenerate all the contracts and care plans, assuming you have multiple conversations with the customer and their family members to explain the changes,” she told SATURDAY.
“No provider has that amount of latent capacity to do that condensed work in such a short period of time.”
“If we as the largest provider will struggle, then you can be guaranteed the middle and smaller providers will struggle as well.”
1 July will also mark the shift to the new regulatory framework, which will present challenges for providers, particularly smaller ones, in ensuring they meet governance, risk, and compliance requirements.
This will see increased scrutiny of boards and key management, underscoring the need for directors and executives to have a clear understanding of their organisation’s operations.
So, what can operators do now to face this challenge?
Lucille Scomazzon (pictured top) and Angela Wood (pictured below) are Partners with law firm Maddocks in their Healthcare Sector team, which focuses on residential and home based care, hospitals and health services, retirement living and disability services, and is led by Lucille.
They say operators need to have a good understanding of their own corporate, clinical and financial governance – and the services they will offer under the new Program.
“We can provide an updated home care agreement for operators to use with their clients, but what does the client journey look like in your business and how do strike the right balance between simplicity for consumers and compliance?” said Lucille.
“The best value that we can give to clients in terms of ensuring that they are prepared is by taking a holistic approach, advising how to adapt the provider’s specific business environment for the legal changes for the smoothest transition possible.”
Consumer contributions
The 10% cap on care management fees and the transition to a system where more services may need to be paid for directly by consumers is creating significant pricing and legal issues for providers.
Currently, only around 15% of consumers pay the income-tested care fee in home care with operators reluctant to charge fees given the high level of unspent funds in the sector.
With Support at Home moving to quarterly budgets, there will be more pressure on operators to charge those contributions.
But operators still need consent from their customers for any significant price changes.
Providers may therefore face difficulties if consumers refuse to pay for services, particularly when the prices are increased.
Under the current security of tenure rules, operators can exit a client if they don’t pay.
However, the Department of Health and Aged Care has yet to reveal if operators will be able to terminate services if consumers refuse to pay required co-contributions – simply stating in the Manual on page 134:
Lucille and Angela both stressed the importance of further guidance from the Department on how operators can implement price increases without violating contracts, and deal with non-payment of services. This is essential for both provider compliance and consumer protection.
To date, the regulator has taken the view that price changes can’t simply be notified to consumers: they must be agreed and must be consistent with the legislation and home care agreements.
In a situation where a contract contemplates an annual CPI increase only, it is not clear how a provider will realign their fees with the Support at Home pricing framework.
“Many operators don’t want to leave their care recipients in the lurch but then find themselves in a position where it’s threatening their own bottom line so finding the right balance is important,” said Angela.
The simple solution to your back office needs: The Lookout Way
The new Support at Home Program brings significant challenges, particularly around legal and compliance requirements. For smaller home care providers, a smart solution is to invest in a care management system that efficiently handles back-office tasks, freeing up staff to focus on delivering care to clients.
The Lookout Way offers customer-focused care management software specifically designed for Australian home care providers. Their platform ensures compliance with the strengthened Aged Care Quality Standards and funding reforms, streamlines care coordination, and enhances communication across your organisation.
Rather than worrying how to build new systems and implementation, services like The Lookout Way can do the heavy lifting. It is a white label service meaning you retain your branding.
Brokerage arrangements and risk
Another issue for operators to consider are their brokerage and third party contracting arrangements.
Under Support at Home, legal responsibility for service delivery and compliance will remain with the registered provider. It will be essential to carefully document arrangements, adhere to risk management requirements, and have adequate processes for vetting subcontracted staff.
“We are looking very closely at the brokerage agreements that we put in place for our clients to ensure that there is not only adequate coverage of those risks, but also that operators are given a plan for how to manage those contracts, because they should not be a ‘set and forget’ type arrangement,” said Lucille.
Some providers fail to have basic practices like a contract register in place so operators will need to take a more structured approach to managing brokerage agreements.
Operators also need to understand the new privacy requirements under the new Aged Care Act, as well as enhanced responsibilities around incident and complaint management and reporting.
“You need to make sure your system is capturing and reporting that data, and it is being reported up to your governing body in a way that allows trends and risks to be identified. Governing bodies need to be equipped with the right information to discharge their duties,” explained Lucille.
Governance and regulatory compliance
The new statutory duties for responsible persons are also a concern, and boards will need to be well-versed in their responsibilities, including understanding their clinical governance and compliance systems.
Maddocks says its experience of compliance and monitoring in the sector means that we are likely to continue to see the regulator, in its auditing process, keen to engage with board members including by putting in-depth questions to a member of the board about the governance structures and clinical systems the organisation had in place.
This could very well be the case whether or not an organisation has had compliance issues. Board members will need to have a solid grasp on clinical governance and be confident to speak to those issues.
“It’s very clear that the [Aged Care Quality and Safety] Commission is wanting a level of comfort that the board is in touch with what is happening in the business and is appropriately overseeing the compliance and risks,” stated Lucille.
“We’re assisting our clients with governance reviews. This includes ‘health checks’ on key governance documents to ensure there is alignment with the new legislation and the duties of responsible persons.
“Many organisations are looking at board and committee charters, director appointment letters and legal documents such as the deed of access, indemnity and insurance that companies enter with their responsible persons. They want to know that these document are still fit for purpose and appropriately respond to the new environment and risks.”
Intersection of the new Aged Care Act with other laws
Operators must also consider the intersection between the Aged Care Act and other laws, such as privacy and Australian Consumer Law (ACL).
Providers will need to meet requirements under all applicable laws when using standard form contracts for home care services and failing to do so could lead to legal challenges.
For instance, misleading advertising or unfair contract terms may not pass the ACL test. Singular focus on compliance with the Aged Care Act alone will not be enough.
Practical advice for providers
It’s easy for providers to feel overwhelmed by the scale of these changes.
Lucille and Angela encourage operators to take a step back and focus on fundamental tasks, such as ensuring proper documentation is in place and that risk management systems are robust.
This includes:
- Reviewing their client agreements, particularly for clarity and compliance with the Aged Care Act and the ACL.
- Have a clear process for transitioning clients to new agreements, communicating and agreeing price changes.
- Ensuring their contract register is up to date and gives a complete picture of brokered and third party arrangements.
- Evaluating their systems for managing complaints, incidents, and reporting.
- Working with legal advisors to ensure governance documents align with the new regulatory requirements.
The aged care peak body Ageing Australia has been advocating for more time for the sector to adapt to these changes.
But with no sign of any further leeway on the timeline, the clock is now ticking.
