Statutory duties under the Aged Care Act: What Providers and Responsible Persons need to know

• What does ‘so far as is reasonably practicable’ mean?

  The qualification ‘so far as is reasonably practicable’ recognises that adverse effects can and do happen, no matter what steps are taken to prevent or mitigate against them. The question is what steps can be taken by the provider to prevent or mitigate against a particular risk of harm occurring (the adverse effect) and which of those steps are reasonably practicable to take in all of the circumstances of providing aged care services – a two part question to be answered.

  This means that a registered provider must take into account and weigh up relevant factors, asking:

  • What is the likelihood of the adverse effect occurring and the degree of harm if the adverse effect were to occur?
  • What does the registered provider know or ought to know about ways of preventing the adverse effect?
  • What steps are available and suitable to prevent or mitigate against the adverse effect occurring?
  • What rights of the individuals under the Statement of Rights should also be considered? Dignity of risk for individuals receiving care will be relevant here.

  For example, for an individual who has a known risk of falls due to poor mobility and cognitive impairment, it would be reasonable for the registered provider to have undertaken a falls risk assessment by an appropriately experienced professional and to have documented risk mitigation strategies in the individual’s care plan, to have discussed any plans with the individual and family members to obtain their support and consent as needed, and then to have implemented those strategies for managing the falls risks. Each case would be considered on its own merits but in taking these steps the provider may demonstrate that they have discharged their duty.

  In meeting the statutory duty, balancing the risks of adverse effects against the rights of the individuals receiving services to take those risks may be necessary. The statutory duties are not intended to override individuals’ rights to take risks provided that they are fully informed, have considered the likely consequences of taking risks while receiving services, and have decision making capacity. Documenting those discussions, the risk assessments undertaken and the decisions of the individuals or their supporters will be necessary to be able to demonstrate the steps that the provider has taken to meet their obligations.

• Breach of the duty

  The New Aged Care Act provides that a registered provider will be in breach of the registered provider duty where:

  • the registered provider has a statutory duty under the New Aged Care Act;
  • the registered provider does not comply with the duty and does not have a reasonable excuse for not complying with the duty; and
  • the conduct of the registered provider amounts to a serious failure to comply with the duty; or
  • the conduct of the registered provider amounts to a serious failure to comply with the duty and the conduct results in the death of, serious injury to or illness of an individual to whom the duty is owed^[3].

  The key message here is that for there to be a breach of the statutory duty, all of the elements of the breach must be proven.

  So if, for example, an individual has a fall and suffers a serious injury, it will not necessarily mean that the registered provider is in breach of the duty. Rather the test for breach of the duty is whether the registered provider (having the duty) knew of the risk, failed to undertake the required assessments and carry out the risk mitigation strategies without a reasonable excuse for doing so, and those failures caused the adverse effect to the health and safety of the person.

  We discuss the meaning of some of the components of the breach of the statutory duty below.
  

• What is a ‘serious failure’?

  A ‘serious failure’ is defined under the New Aged Care Act as being conduct that exposes an individual to a risk of death or serious injury or illness and the conduct involves a significant failure or is part of a systemic pattern of conduct^[4].

  The definition of ‘serious failure’ is a composite one. The definition encompasses both the exposure to a high risk with serious outcomes (of death or serious injury or illness) and a significant failure in the provider’s conduct (such that it is a significant departure from the expected standards for providing care) or exposure of the individual to a systemic issue or failing in the provider’s conduct.

  This standard is a high one and a court would need to be satisfied that both of these elements have been established in order for this component of the test to be satisfied.
  

• What is a ‘serious injury or illness’?

  A serious injury or illness is defined under the Aged Care Act^[5] as being a serious injury or illness that requires:

  • immediate treatment for amputation, a serious head or eye injury, a serious burn, degloving or scalping, spinal injury, loss of a bodily function, serious lacerations or a serious wound or pressure injury; or
  • medical treatment within 48 hours of exposure to a substance; or
  • any other injury or illness prescribed by the Rules.

  The Rules may also exclude certain kinds of injuries from this definition.
  

• What are the Penalties for breaching the registered provider duty?

  There are two kinds of penalties that may be imposed where a registered provider fails to comply with the registered provider duty, the first being penalties where the registered provider is an individual (for example sole traders), and second where the registered provider is not an individual, for example corporate entities.

  	Registered provider that is an individual	Registered provider other than an individual
  Serious Failure	150 Penalty Units ($49,500)[6]	1,000 penalty Units ($330,000)
  Death, serious injury or illness that results from the Serious Failure	500 penalty units ($165,000)	4,800 penalty units ($1,584,000)

The responsible person duty

The New Aged Care Act requires all ‘responsible persons’ of a registered provider to ‘exercise due diligence’ to ensure that the registered provider complies with the registered provider duty as outlined above.

• Who does the duty apply to?

  The definition of a responsible person under the New Aged Care Act captures individuals in critical roles who have the potential to influence the culture, conduct and accountability of the registered provider through their decisions and behaviours, for example:

  • individuals in executive decision making roles (including the members of the board or governing body) or other roles that have authority, responsibility for or significant influence over planning, directing or controlling activities of the registered provider;
  • registered nurses who have responsibility for the overall management of nursing services delivered by the registered provider at a residential aged care home; and
  • any individual who has responsibility for the day-to-day operations of the registered provider.
• What constitutes ‘exercising due diligence’?

  The duty to ‘exercise due diligence’ to ensure that the registered provider is meeting its duties includes taking reasonable steps to:

  • acquire and maintain knowledge of the requirements applying to registered providers under the Aged Care Act;
  • having an understanding of the nature of aged care services the provider delivers and the potential adverse effects that individuals receiving services can suffer; and
  • ensure the provider has, and implements resources and processes for complying with any duty or requirement of the provider under the Aged Care Act, including for example ensuring the registered provider has available for use, and uses, appropriate resources and processes to manage:
    • adverse effects to the health and safety of individuals accessing services delivered by the registered provider; and
    • receiving and considering information regarding incidents and risks and responding in a timely way to that information.
• Breach of the Duty

  A person will be in breach of the responsible person duty where:

  • the person is a responsible person who has the prescribed duty;
  • the responsible person does not comply with the duty and does not have a reasonable excuse for not complying with the duty; and
  • the conduct amounts to a serious failure to comply with the duty; or
  • the conduct the conduct amounts to a serious failure to comply with the duty and the conduct results in the death of or serious injury to or illness of an individual to whom the registered provider owes a duty.

  As we have noted above for the registered provider duty, all of these elements will need to be established in order to prove a breach of the responsible person’s duty.

• What are the Penalties for breaching the responsible person duty?

  Where the conduct of a responsible person amounts to a serious failure to comply with the duty, a civil penalty of 150 penalty units may be imposed ($49,500).

  Where the conduct of an responsible person amounts to a serious failure to comply with the duty and the conduct results in the death of or serious injury to or illness of an individual to whom the duty is owed, a civil penalty of 500 penalty units may be imposed ($165,000).

Preparing for change

Approved providers should be planning ahead to ensure that they have the appropriate systems and processes in place to be able to meet the statutory duties imposed on them and their responsible persons.

Steps to take include ensuring that senior management, directors and individuals in roles which will be captured under the responsible person definition have a solid grasp on the regulatory regime that applies to the organisation. In this regard, in the lead up to the changes, organisations can:

• consider what training responsible persons may require to satisfy the statutory duty of due diligence – this might include refresher training on the regulatory framework, incident management and responding to trends in high risk areas, complaints management, privacy and data management,

• consider what processes are in place within the organisation to ensure responsible persons obtain the relevant information about the operations and risks associated with the aged care operations of the entity – are these documented in a policy that is able to be provided to the Commission if requested?

• is the organisation confident of the processes it uses to prevent or mitigate adverse effects to the health and safety of its individuals receiving care?

_{[1] The terms ‘registered providers’ and ‘responsible persons’ reflects the terminology in the New Aged Care Act, replacing ‘approved providers’ and ‘key personnel’, but noting that the categories of persons that can be registered providers under the New Aged Care Act are broader than for approved providers.}

_{[2] Section 179(1) of the New Aged Care Act.}

_{[3] Section 179(3) of the New Aged Care Act.}

_{[4] Section 179(4) of the New Aged Care Act.}

_{[5] Section 7 of the New Aged Care Act.}

_{[6] Penalty units change from time to time. As at the date of this article, one penalty unit is $330.}