Legal Insights

Bundling: A new frontier in home care

By Lucille Scomazzon

• 03 October 2017 • 4 min read
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Reforms in home care packages have recently been introduced to Australia

In February 2017 a number of important reforms to home care packages were implemented, which reflected the continuing drive of the Australian Government to increase consumer choice and control. These reforms included the allocation of home care packages directly to consumers who are now able to select their provider of choice by directing their package to them.

In anticipation of these reforms, on our blog The Prescription we looked at what makes a good home care agreement and how a good agreement can assist providers to clearly and concisely communicate their value proposition to prospective consumers. As part of this, we noted that service differentiation and communicating an attractive offering will be important in the increasingly competitive market for the delivery of home care services.

Over the past months we have seen home care providers responding to this changing commercial and regulatory landscape by reviewing their business models and considering new pricing structures and methods of service delivery.

This includes the delivery of care and services to a consumer on a ‘bundled’ basis. In broad terms, this involves the consumer electing to receive from their provider a ‘bundle’ of pre-determined care and support services each month, which are consistent with their needs and goals. This is much like the home internet and phone bundles which are widely available today.

While the Aged Care Act 1997 (Cth) (Aged Care Act) and its associated principles do not expressly prohibit the delivery of home care packages on a bundled basis, they contain many significant requirements which providers should be aware of when considering a service delivery model of this type.

Providers will need to carefully consider how a bundled service model is consistent with the philosophy of, and requirement to provide consumer directed care. At the same time, providers will need to ensure that any bundled service model achieves delivery of appropriate care and services as mandated by the aged care legislation, including by taking into account:

  • the extent to which it is necessary for a consumer’s budget and monthly statement to be itemised to reflect the care and services which have been provided and their cost
  • rules that relate to charging for services in advance and how this impacts upon the bundling and scheduling of various services
  • how the consumer’s use of their bundle will be actively monitored to ensure that the various components of the bundle are being effectively utilised and remain consistent with the consumer’s needs and goals
  • what happens if a consumer’s needs or preferences change and consequently their bundle or their home care package level needs to change
  • how administration, case management and other similar charges will be calculated, charged and disclosed
  • the impact of the bundled service model on the accrual of unspent home care amounts
  • how a consumer can terminate their bundle and the consequences of doing so.

Importantly, providers should also consider the requirements of other laws which are relevant to the delivery of care and services, the charges imposed and how services are promoted and explained to consumers - including consumer protection laws. For example, under the Australian Consumer Law, it is illegal for a business to engage in conduct that misleads or deceives or is likely to mislead or deceive consumers. This applies even if you did not intend to mislead or deceive anyone or no one has suffered any loss or damage as a result of your conduct. Compliance with the Aged Care Act does not exclude the possibility of non-compliance with other laws such as the Australian Consumer Law.

Considerations such as this highlight the importance of the terms and conditions of a bundled service model being clearly and consistently reflected across the full suite of a provider’s consumer documentation, including their home care agreement, care plan, budget, invoices and marketing materials.

The Maddocks Healthcare team is experienced in assisting providers with all operational and compliance matters for home care providers.

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