The new AN-ACC funding model – what you need to know

The aged care sector in Australia has long been underfunded, and the recent report by the Royal Commission into Aged Care Quality and Safety has only served to highlight this fact. The report found a severe shortfall in the amount of funding available to aged care providers, which has resulted in a failure to provide consistently safe and quality care to residents. In part, this is due to the overall insufficient funding available to the aged care sector, however, it can also be attributed to the way funding has been distributed to aged care providers.

For more than a decade now, the Aged Care Funding Instrument (ACFI) has been used to determine funding allocation, though during this time there’s been a significant shift in the care needs of residential care clients. As a result, aged care providers have been forced to ration care and make sacrifices in order to make ends meet. From October 2022, a new model of funding will be introduced. The Australian National Aged Care Classification (AN-ACC) is an evidence-based funding structure endorsed by the Royal Commission, and designed to be a more equitable solution better matching residents’ needs with the actual costs of care delivery.

There are significant differences in how funding will be calculated from October 2022

With the upcoming change from ACFI to AN-ACC funding, there are a number of key things providers need to know in order to best prepare for the transition. Ultimately, the amount of funding a provider receives will be directly linked to the care needs of their residents, as opposed to the current model, which largely relies on self-assessment by providers.

According to LightArc, the significant differences that providers will need to adjust to are:

  • Assessments for funding will now be conducted by external teams for funding purposes only
  • Assessment conducted by the approved provider will no longer need to consider funding but can focus fully on the client care needs
  • Funding is changed to base care, resident AN-ACC class and a once off new resident funding amounts

Recognising the link between a client’s actual needs and funding is key to the adequate provision of care. And as How says, “… this funding model should facilitate a closer alignment between the resourcing requirements of a facility and the resourcing requirements of the clients themselves.”

What to expect with an AN-ACC Assessment

AN-ACC assessments will be conducted by an external team focused on the mobility, cognitive capacity, and compounding factors (behavioural/mental health) for each resident which will then be used to calculate the funding amount that the provider will receive. Unlike an ACFI assessment, clinical needs will be assessed separately to care needs. Clinical needs are those that relate directly to a resident’s health, such as nursing or allied health needs, while care needs are those that relate to the delivery of care, such as personal care, domestic assistance or social support. This separation is designed to give a more accurate picture of a resident’s actual care needs and the costs associated with meeting those needs. As such, providers will be able to plan, roster and budget more specifically to meet client needs.

Another important funding element relates to the introduction of an initial payment per new client. This recognises the significant ‘onboarding’ expenses incurred in the first few days of a client coming into an aged care facility.

The transition from ACFI to AN-ACC

While the new funding model has been designed to be fairer and more equitable, providers will need to adjust their practices and processes to make sure they’re prepared for the transition. Certainly, there will be an immediate impact on staffing capacity, which will see changes with the cessation of internal assessments meaning those staff can be redeployed to focus more on the delivery of care needs.

While there’s still some time to prepare, LightArc believes it is important that providers start thinking about the changes now so they can really understand what the flow-on effects are going to mean for the next financial year and the budgeting process required to accommodate the new model. If you’ve got questions or would just like to discuss the implications the AN-ACC may bring for your business, get in touch with the LightArc team today.

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