Improved Payment Arrangements: When will the changes affect home care providers?

We’ve been hearing a lot about Improved Payment Arrangements for home care lately as part of the ongoing aged care reforms, but there is still confusion about the changes and what this means for home care providers.

It is clear that both the Department of Health and Services Australia have carried out a lot of work to prepare for Phase 2 of the Improved Payment Arrangements (IPA); however, there are a few key issues still being worked on. As such, providers have been given a reprieve with extensions to timelines for some of the IPA changes.

We’re going to break down what we know so far about what the Government has told us about the changes and their current timelines and extensions. These dates and deadlines are subject to change, but we hope this will give you a guide as to what to expect.

5 key changes to the IPA, deadlines and extensions

1. Opt-In Arrangement for Commonwealth Unspent Funds

Providers can choose to return Commonwealth unspent amounts for each care recipient. Once a provider reports their unspent funds balance and opts-in, the provider will not need to report on the Commonwealth portion of provider-held unspent funds. This is particularly advisable for providers with care recipients who have no unspent funds.

While the opting-in period was set to kick off from the start of September, this has been pushed back to 1 October 2021 and will remain open until 28 February 2022. It should be noted that once opted in, this can’t be changed for the care recipient.

2. Reporting of Unspent Funds

A non-mandatory period for the reporting of Commonwealth unspent amounts has been introduced, which will give home care providers some grace to get their systems and processes in order. While this was initially required to be reported as at 31 August 2021 as part of the September claim lodged in October, providers will now have until 31 December 2021 to report. We will continue to monitor this space in case this date changes.

The Department of Health has provided the table below based on the current guidance, and also highlights the mandatory reporting requirements in red.

New calculators to assist aged care providers have been included in The Aged Care Legislation Amendment (Improved Home Care Payment Administration) Instrument 2021.

3. Home Care Accounts

From 1 September 2021, a home care account will be established for each care recipient. Any unspent Government subsidy accrued from 1 September 2021 onward will be held in this account. These funds will continue to be available to the care recipient when needed.

On a similar note, another area to monitor is around care recipients’ HCP monthly statement requirements. Currently, statements do not need to break down the unspent funds balance into the provider-held care recipient portion, Commonwealth portions, or the home care account balance until providers are ready to include this information.

The Department of Health will review this in early 2022 to determine the date at which this reporting requirement will become mandatory. In addition to this, a non-mandatory better practice statement is currently being developed and home care providers will be encouraged to align with this.

4. Claiming

With Phase 2 of the IPA kicking off on 1 September 2021, there have been some changes to claiming as well.

The total ‘Price’ will now be claimed using an aggregated invoice amount for each care recipient. It should be noted that claims cannot include negative amounts. Lumary functionality is currently being updated to align with the pending reporting templates to better support home care providers with these evolving administrative tasks.

The Department of Health has provided a timeline of the key changes (as it stands) in the table below for claiming based on care and services, reporting of Commonwealth unspent funds and the timeframe available to opt-in for unspent funds.

5. 70-Day Limit

There has been an introduction of a 70-day quarantine period to allow for retrospective changes to package balances for care recipients who transfer or who no longer require their HCP funding from their provider via a departure. For transfers, providers should note that this applies to those moving to an external provider, but also for internal transfers to a new service ID or NAPS ID. 

When providers are transferring care recipients internally between service IDs or NAPS IDs, they will trigger an automatic OPT-IN scenario for the care recipient and be blocked from any current Commonwealth unspent balances for the 70 day quarantine period. The implication of this is that providers will no longer automatically carry unspent funds balances to the new package for immediate use. 

Providers will need to submit their final claims and events before day 70, which includes the return of any provider-held Commonwealth unspent fund amount.

What can providers do to get ready?

To prepare for these transitions, the Department of Health has recommended providers:

• Ensure their claims and care recipient records are up to date.
• Reconcile unspent funds held for each care recipient to support meeting the 31 December 2021 deadline for reporting.
• Ensure systems and processes are in place to track the value of care and services delivered for each care recipient.
• [If a provider does not intend to opt in to draw down unspent funds] Ensure systems and processes are in place to track unspent funds held for each care recipient, and the balance of the Commonwealth portion of unspent funds can be extracted to support ongoing reporting to Services Australia.

To ensure our HCP software will help providers meet new legislative and policy requirements, Lumary is in the process of adapting our Lumary CM solution and will stay at the forefront of these changes as the aged care sector continues to reform. You can learn more about the benefits and features of our HCP software here.

If you’re not sure whether the systems you currently have in place will be able to navigate the changes, get in touch with Lumary to discuss how our solution can simplify the claiming and reporting process.

Useful Resources

There’s an incredible amount of information coming out right now, so we’ve compiled a list of a few documents that we’ve found to be useful whilst navigating the changes for home care providers and our HCP software.

For detailed information of the changes for providers: Improved Payment Arrangements (IPA) for Home Care Provider Fact Sheet – August 2021

For answers to common questions: IPA Question and Answer Fact Sheet

For sample CSV files for the payment statements and the bulk file import, find the 2021 IPA changes eKit here.