Changes are afoot for Australian home care providers who have clients funded by the Federal Government’s home care package program.
From 1 September 2021, under the Improved Payment Arrangements (IPA) (Phase 2) providers will receive funding based on the actual services delivered to care recipients in the previous month. In addition, Services Australia will create a home care account for each care recipient to collect and hold any remaining Commonwealth portion of unspent funds until needed by the care recipient.
These changes are part of the Commonwealth’s response to the fact that home care providers are now liable for more than $1.5 billion of their care recipients’ Home Care Package funds. The Commonwealth Government believes there is a need to reduce the amount of unspent funds held by providers as quickly as possible. The changes from IPA will ensure that care recipients’ package funds are always available to purchase the care and service needed by home care recipients.
The IPA changes move the responsibility for holding the Commonwealth portion of unspent funds for care recipients from the provider to the Australian Government. This will reduce the prudential risk in home care over time and improve protections for care recipients’ home care funds as the program grows. These changes are also designed to reinforce the focus on delivering services to meet consumers needs and increase choice in the Home Care Packages Program.
The IPA changes will align the home care package more closely with other Government-funded programs like the National Disability Insurance Scheme, as well as modern business practices.
Change management and planning for success.
Based on our experience operating and working closely with care businesses, the team at The Lookout Way know that implementing and responding to the IPA (phase 2) changes may appear daunting to many operators. We understand that having well-functioning finance, accounting, and reporting teams is important not just to the health of the care business – but also to ensure the confidence and transparency expected by clients and support workers.
We are tackling the challenge of meeting the new IPA changes head-on and want to empower all Lookout customers with a fully compliant funds tracking, claiming and payment system that comprehensively meets the IPA requirements and delivers operational improvements in an easy-to-implement manner.
While some areas of details and clarity regarding IPA are yet to come from the Government, we have been working to pre-emptively address the key changes. We want to share with you the outline of our game plan to help you meet new requirements.
1. Invoicing/payment based on actual services delivered in past month
- Providers will now need to invoice only for services delivered in the past month and will be paid in arrears for those services.
- Providers will be able to claim an aggregated invoice amount each month for each care recipient (that is, they will not have to provide detail of specific services).
Lookout helps by:
- Visits, invoices, and transactions are all in a single place for each care recipient. Completed visits conducted through the Lookout rostering system are added in automatically. (1 Sep)
- A detailed report of all care and services delivered, including the total, can also be generated for each care recipient. (1 Sep)
- Generating and tracking the claimable amount of all care and services delivered via visits, invoices and transactions per claim period. (1 Sep)
- Enabling an export of a CSV of the total care and services delivered per client, formatted to be imported directly into Services Australia's claim interface through the Aged Care Provider Portal. (1 Oct)
- This will have the price (i.e. invoice amount) per care recipient per the new IPA calculations (i.e. care-and-services total - BDF).
- The CSV will be formatted to Services Australia's requirements to meet the data validation fields.
2. Establishing a Home Care Account for each care recipient
- Any unspent amount will accrue in a home care account created and maintained by Service Australia for each home care recipient
- Any unspent Government subsidy accrued from 1 September 2021 onward will be held in the account. These funds will continue to be available to the home care recipient when needed.
Lookout helps by:
- Using a model of dedicated ledger accounts to represent the different "buckets" of funding available to a care recipient. (1 Sep)
- One of these 'buckets' will represent the Home Care Account balance, being managed by Services Australia.
- A process that supports the flow of money "between" the buckets which follows the new IPA rules.
- Models for opt-in, opt-out, and anyone who comes into care post 1 Sep (which we call being in a "clean state") are supported.
- Clean state: (1 Oct)
- Opt-out: (1 Oct)
- Opt-in: (1 Nov)
- The calculation model allows a home care provider to generate an estimate of the funding in each bucket after finalising a claim. The estimate can be used in reconciliation against the Payment Statement provided by Services Australia after a claim is finalised.
- A provider will be able to make debits, credits and adjustments to these buckets to manage the multiple funds. (1 Oct)
3. Reporting of Unspent Funds
- Providers will be required to report any Commonwealth unspent amount they currently hold. Providers have until 31 December 2021 to start reporting on the Commonwealth portion of unspent funds held for each care recipient. Reporting will then be mandatory unless a provider chooses the opt-in arrangement.
Lookout helps by:
- Enabling providers to record the initial division of unspent funds into the appropriate "buckets" (e.g. 'provider-held commonwealth unspent funds' and 'care-recipient contributed ITF funds'). (1 Sep)
- Enabling an export of a CSV of the provider-held commonwealth unspent funds per client, formatted to be imported directly into Services Australia's claim interface through the Aged Care Provider Portal. (1 Oct)
- The CSV will be formatted to Services Australia's requirements to meet their data validation fields.
- The CSV can be used to do both the initial reporting of unspent funds and to report the value of the unspent funds for all opted-out care recipients ongoing as part of the monthly claim.
- The CSV can be used in reconciliation against the Payment Statement provided by Services Australia.
- Each care recipient can be set up to be either opted-in or opted-out and the calculations of funds will flow appropriately.
- Opt-out: (1 Oct)
- Opt-in: (1 Nov)
- A provider will be able to make debits, credits and adjustments to these buckets to manage the multiple funds. (1 Oct)
- Communicate to care recipients the amount of each type of unspent funds they have through the care app. (1 Nov)
4. Opt-In arrangement for Commonwealth Unspent Funds
- Providers will have the choice to opt-in to draw down on the Commonwealth unspent amount providers currently hold for care and services.
- Providers can opt-in for one or more (or none) of their care recipients until 28 February 2022.
- If a provider opts-in to this process for a care recipient, the Commonwealth portion of unspent funds they hold for that recipient will be progressively drawn down by the provider.
- Services Australia will credit the care recipient’s home care account with their newly accrued unspent Commonwealth subsidy, for future use. The care recipient will not lose access to their unspent funds.
- Once a provider reports their unspent funds balance and opts-in, Services Australia will keep track of the Commonwealth portion of provider-held unspent funds. The provider will not need to report on the Commonwealth portion of provider-held unspent funds after this date.
- The process and requirements for providers who opt in vs. those who don’t is detailed in Attachment A.
Lookout helps by:
- Enabling providers to record the initial division of unspent funds into the appropriate "buckets" (e.g. 'provider-held commonwealth unspent funds' and 'care-recipient contributed ITF funds'). (1 Sep)
- Enabling an export of a CSV of the provider-held commonwealth unspent funds per client, formatted to be imported directly into Services Australia's claim interface through the Aged Care Provider Portal. (1 Nov)
- The CSV will be formatted to Services Australia's requirements to meet their data validation fields.
- Providers can use this CSV to bulk opt-in care recipients if they choose to do so.
- Each care recipient can be set up to be either opted-in or opted-out. The calculations of funds will flow appropriately:
- Opt-out: (1 Oct)
- Opt-in: (1 Nov)
5. 70-Day Limit
- Introducing a 70-day limit to retrospective changes at departure. The limit applies to all events and finalising any claims for the care recipient that has departed
- Providers will need to submit any claims and events before day 70 (as claims and events are approved on the next business day). This includes the return of any provider-held unspent amount for care recipients who aren’t opted in.
Lookout helps by:
- Provides several 'departure tools' to help providers swiftly finalise claims following a care recipient's exit:
- Provides oversight of outstanding items recorded in Lookout (e.g. a purchase order which has not yet been matched to a third party provided invoice) (1 Sep)
- Showing the balance of each bucket which requires an action by the provider (e.g. returning the Commonwealth portion of unspent funds to the Government.)
- Clean state: (1 Oct)
- Opt-out: (1 Oct)
- Opt-in: (1 Nov