Legal Insights

Home Care Providers: are you prepared for new pricing caps?

By Lucille Scomazzon, Alexandra Adams, Tamie Duncan-Bible

• 19 December 2022 • 2 min read

There are a number of significant pricing related reforms commencing on 1 January 2023 which apply to approved providers of home care. In this Alert we look at the pricing caps that are being introduced on 1 January 2023.

Home care pricing changes

Over the last few years, home care pricing has undergone a number of significant reforms, often directed at regulating administration and management costs.

Continuing this regulatory focus, on 1 January 2023 the Aged Care Act 1997 (Cth) will be amended to:

prohibit exit fees, and
provide for regulations to be made in relation to the prices charged by a provider of home care.

While the text of the proposed regulations has not yet been released, the Department of Health and Aged Care (Department) has indicated that the User Rights Principles 2014 (Cth) will be amended to introduce the following pricing regulations:

care management prices will be capped at 20% of the package value (calculated fortnightly)
package management prices will be capped at 15% of the package value (calculated fortnightly)
providers will not be able to charge for package management in a calendar month where no services other than care management are delivered, and
providers will not be able to charge separately for third-party services. That is, a provider must agree an all-inclusive cost with the consumer where services are provided as part of a brokerage or subcontracting arrangement. The idea being that it will make it easier for consumers to understand the costs being charged as part of the provision of services.

Providers will need to ensure that their published prices and the prices they charge consumers are compliant with the new regulations from 1 January 2023.

The Department has a strong regulatory focus on how home care providers engage with consumers regarding pricing changes making it important that providers bring their prices into line with the new regulations in a way that is compliant.

How we can assist you

The Healthcare Team at Maddocks regularly assists providers of home care services regarding home care pricing changes and has developed a user friendly home care package agreement, which is compliant with the pricing changes and template letters to assist with communicating the changes and, where required, price increases.