2024 Aged Care Industry Reforms

As we look ahead to 2024 and beyond, the aged care sector in Australia is poised for significant transformation, with key reforms slated for implementation in July 2024 set to reshape industry dynamics. 

RSM Australia is closely monitoring three pivotal changes expected to drive substantial shifts in the sector's operational landscape and financial management practices.

Key points:

• The Government is planning to introduce a new Aged Care Act, strengthened Aged Care Quality Standards and a new Regulatory Model on 1 July 2024
• The changes are being made in response to feedback from the Royal Commission into Aged Care Quality and Safety, which said that the system should be more focused on the needs of older people.
• The new Act will introduce a new “person-centred” aged care system that includes a Statement of Rights; it will set new obligations for providers and workers and expand the powers of the regulators. The new Act will also provide the legal basis for the strengthened Quality Standards and the new Regulatory Model.
• The strengthened Quality Standards will reduce the number of Standards from eight to seven, consolidating areas covered by each of the Standards and introduce a new “Food and Nutrition” Standard.
• The new Regulatory Model aims to streamline regulation. Providers will be required to satisfy registration conditions and re-register every three years. A transition period will apply so that providers don’t have to re-register immediately on 1 July 2024.
• A final draft of the new Standards was released in November 2023. However, this draft is subject to change and will not become the official version until the new Act is passed by Parliament.

What’s Changing?

The Act

Firstly, the imminent introduction of the new Aged Care Act signals a comprehensive regulatory overhaul, necessitating attention to compliance and governance practices. Expected changes include a revised set of provider obligations and statutory duties, with providers expected to:

• Ensure their actions are guided by the Statement of Rights.
• Register with the Aged Care Quality and Safety Commission (ACQSC) (with transitional arrangements in place for existing providers) and have any residential care homes approved.
• Comply with new financial and prudential standards.
• Ensure their workforce meets revised worker screening requirements.

The Standards
The proposed changes will reduce the number of Standards from eight to seven, and consolidate areas covered by each of the Standards. According to the Department of Health, the strengthened Standards will be:

• Standard 1: The Person            
• Standard 2: The Organisation        
• Standard 3: The Care and Services    
• Standard 4: The Environment
• Standard 5: Clinical Care
• Standard 6: Food and Nutrition
• Standard 7: The Residential Community

Each Standard will include the:

• Expectation statement for older people
• Intent of each standard
• Outcomes that providers would be assessed against
• Actions – which are how providers might demonstrate achievement of the outcome (these will replace the “organisational requirements” in the current Standards). There are 152 of these in the strengthened Standards

The Regulatory Model

According to the Department of Health and Aged Care, the new model will include key changes such as:

• All providers will need to be registered through a new provider registration model. Registration is expected to be for three years.
• Transition period: starting from 1 July 2024 when the new model begins, current providers will be automatically considered as registered and won't have to undergo the registration process right away. The Department of Health and Aged Care will then contact providers and assign them a date for re-registration. Timeframes will be spread out so that the Department doesn't have to process all re-registrations concurrently.
• The new model will group services into registration categories based on how similar they are in terms of risk and service features. This means that services that have lower risk (such as delivering meals) will have less requirements than higher risk services such as residential care.
• Providers will be expected to act consistently with the Statement of Rights and Principles outlined in the new Act and have practices in place to ensure they are able to do so.
• Providers such as residential care will also have to comply with requirements such as “ongoing business improvement” and Financial and Prudential Standards.
• Transparency of sector and provider performance will be improved via a new public register of registered providers and published sanction information.

RSM Australia is ready to assist aged care providers in navigating the complexities of the updated legislation, ensuring adherence to stringent assessment and accreditation standards while prioritising the financial health and sustainability of their operations. 

FOR MORE INFORMATION

Please reach out to Ray Scott, National Director – Aged Care, if you would like to discuss your specific circumstances.