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Home care pricing updates

A suite of changes to the aged care regulatory framework come into effect on 1 July 2019. Part of these changes is the introduction of the home care pricing transparency rules under new Division 3B of Part 3 of the User Rights Principles 2014. This change has been introduced to give consumers greater transparency of prices offered by different providers.

From 1 July 2019, approved providers of home care will be required to publish the prices they charge for certain common care and services in a standard format on My Aged Care (Notice). This includes specified kinds of care and services, travel costs, case management costs, sub-contracting costs and the amount of basic daily care fee charged. Providers will also be required to attach to the Notice a copy of their full price list or a link to the full price list on the provider’s own website.

Approved providers must not charge more for the common care and services than set out in the Notice for clients who enter the service after that date, unless the home care agreement specifies a different price and the reason for the different amount.

What does this mean for your existing clients?

For existing clients (those that are receiving care on 30 June 2019), there is a transitional period and an approved provider does not need to comply with the pricing transparency rules for these clients until 1 July 2020.

If compliance with the new pricing transparency rules requires a provider to charge different fees to existing clients, there are two circumstances that may arise:

  • (the agreement permits fee changes) If the client agreement permits fee changes, the process in the client agreement should be followed in relation to fee changes and (subject to the requirements of the process set out in the client agreement) this can be done at any time prior to the deadline for compliance on 1 July 2020.
  • (the agreement is silent on fee changes or does not permit fee changes) If there is no mechanism in the client agreement allowing the provider to change fees, unless the client agrees to change the fees, the provider does not have a clear basis on which to change those fees before 1 July 2020. To the extent that a provider is seeking to change or increase fees before this date, the provider should seek legal advice.

From 1 July 2020 the provider must comply with the pricing transparency requirements; for example, charging not more than the published price for common care and services and not charging business costs, notwithstanding the terms of the client agreement. The fee changes required to comply with the pricing transparency rules should be managed by careful communication with the client. The provider should take an approach to fee changes that seeks to meet the compliance requirements while mirroring previous fee structures and levels as closely as possible. The provider does not have a clear basis on which to increase overall fees in these circumstances.

The application of the pricing transparency rules to existing care recipients will turn quite heavily on the provisions of the contract and the type of fee change in question. Specific circumstances may raise compliance issues with other laws, such as consumer laws. If you are unsure about whether your agreement is compliant with the new rules, you should seek legal advice.

You can view a redacted version of our template Home Care Package Agreement and the questionnaire we use to assist clients in preparing a template.

Author:
Alexandra Adams  | Senior Associate
61 2 9291 6117
alexandra.adams@maddocks.com.au
Author:
Alexandra Perry  | Associate
61 2 9291 6118
alexandra.perry@maddocks.com.au
Author:
Joanne Chenn  | Lawyer
61 2 9291 6210
joanne.chenn@maddocks.com.au

A suite of changes to the aged care regulatory framework come into effect on 1 July 2019. Part of these changes is the introduction of the home care pricing transparency rules under new Division 3B of Part 3 of the User Rights Principles 2014. This change has been introduced to give consumers greater transparency of prices offered by different providers.

From 1 July 2019, approved providers of home care will be required to publish the prices they charge for certain common care and services in a standard format on My Aged Care (Notice). This includes specified kinds of care and services, travel costs, case management costs, sub-contracting costs and the amount of basic daily care fee charged. Providers will also be required to attach to the Notice a copy of their full price list or a link to the full price list on the provider’s own website.

Approved providers must not charge more for the common care and services than set out in the Notice for clients who enter the service after that date, unless the home care agreement specifies a different price and the reason for the different amount.

What does this mean for your existing clients?

For existing clients (those that are receiving care on 30 June 2019), there is a transitional period and an approved provider does not need to comply with the pricing transparency rules for these clients until 1 July 2020.

If compliance with the new pricing transparency rules requires a provider to charge different fees to existing clients, there are two circumstances that may arise:

  • (the agreement permits fee changes) If the client agreement permits fee changes, the process in the client agreement should be followed in relation to fee changes and (subject to the requirements of the process set out in the client agreement) this can be done at any time prior to the deadline for compliance on 1 July 2020.
  • (the agreement is silent on fee changes or does not permit fee changes) If there is no mechanism in the client agreement allowing the provider to change fees, unless the client agrees to change the fees, the provider does not have a clear basis on which to change those fees before 1 July 2020. To the extent that a provider is seeking to change or increase fees before this date, the provider should seek legal advice.

From 1 July 2020 the provider must comply with the pricing transparency requirements; for example, charging not more than the published price for common care and services and not charging business costs, notwithstanding the terms of the client agreement. The fee changes required to comply with the pricing transparency rules should be managed by careful communication with the client. The provider should take an approach to fee changes that seeks to meet the compliance requirements while mirroring previous fee structures and levels as closely as possible. The provider does not have a clear basis on which to increase overall fees in these circumstances.

The application of the pricing transparency rules to existing care recipients will turn quite heavily on the provisions of the contract and the type of fee change in question. Specific circumstances may raise compliance issues with other laws, such as consumer laws. If you are unsure about whether your agreement is compliant with the new rules, you should seek legal advice.

You can view a redacted version of our template Home Care Package Agreement and the questionnaire we use to assist clients in preparing a template.

Author:
Alexandra Adams  | Senior Associate
61 2 9291 6117
alexandra.adams@maddocks.com.au
Author:
Alexandra Perry  | Associate
61 2 9291 6118
alexandra.perry@maddocks.com.au
Author:
Joanne Chenn  | Lawyer
61 2 9291 6210
joanne.chenn@maddocks.com.au