In response to the Royal Commission into Aged Care Quality and Safety, the Department of Health and Aged Care (Department) has been collecting feedback on a new model of regulation for the aged care sector as part of the redesign of the Aged Care Act. The Department released a consultation paper in April 2023 which give some detail to the proposed new model and how this will apply to the sector. This article will briefly discuss some of the changes and what they mean for providers of aged care.

Why Do We Need a New Model?

One of the major recommendations of the Royal Commission was that the current framework for regulating aged care is no longer fit for purpose, with ineffective regulation of the sector identified as a contributing factor to poor consumer outcomes and substandard care. The goals of the proposed new model are to increase protections for older people, drive cultural change in the aged care sector, improve provider capability and the sustainability of the sector and support continuous improvement in care.

The major changes to regulation to support these outcomes will focus on the following areas:

• Aged Care Provider Eligibility and Entry to the Sector
• Obligations of Aged Care Providers
• Regulatory Oversight
• Complaints and Feedback Mechanisms
• Supporting Older People to Access Information

What Does this Mean for Aged Care Providers?

While much of the detail of the new model is still being considered, the consultation paper canvases several areas for reform.

Changes to Improve Quality of Care

The proposed new model includes changes to support quality care in the aged care sector. These changes respond to feedback provided to the Royal Commission about information sharing, capability building and engagement to drive cultural change in the sector.

The proposed changes to support quality of care include:

• Improved information sharing: Giving older people and their representatives access to relevant information about their care, including provider star ratings, monthly care statements and information about their rights and how to make complaints.
• Improved education and engagement with providers: To better inform providers about their obligations, their performance compared to their peers, the rights of older people accessing their services and supporting them to improve quality of care and to implement learnings from their past successes.
• Building capability and continuous improvement: This includes supporting providers to share success stories and learnings, improving workforce training and consultation on worker registration schemes.
• Incentivising high quality care: This may include graded assessments during audits rather than a simple pass-fail outcome, promoting outstanding providers and applying “right-touch” regulation to high performers, which may involve adjusting registration requirements for providers who consistently exceed benchmarks and have a sustainable system for ensuring good care.

Provider Entry to the Sector

Changes are also being proposed to the way new providers are accredited and allowed to provide Commonwealth subsidised care. Some of the shortcomings identified include a lack of requirements to re-test the suitability of providers at defined intervals, and confusion about which registration schemes providers must comply with.

The proposed changes to support provider entry to the sector include:

• Universal provider registration and re-registration: This will act as a single point of entry for all providers of Commonwealth subsidised aged care, both in residential settings and under the reformed arrangements for home care. Registration will be offered in several categories to match different kinds of services and levels of risk. The registration and re-registration process will replace accreditation for residential providers and quality reviews for home services. This reform will also include the ability for non-corporations, such as sole traders and partnerships, to register to provide in-home services, increasing consumer choice.
• Provider re-registration: The proposed period for provider registration is three years, after which all providers will be required to demonstrate their suitability, capability, viability and propriety to deliver aged care services. This may include applying risk-proportionate registration requirements and conditions of registration on providers. Providers will be required to meet financial and prudential requirements to maintain registration and information about registered providers will be published publicly to promote consumer choice.

Obligations of Registered Providers

Provider responsibilities will be known as obligations and will either form part of a provider’s registration or apply to all providers. The proposed new model separates these obligations into several categories:

• Overarching obligations: These apply to all providers regardless of registration. They may include complying with conditions of registration, notifying the regulator of matters relating to their suitability to provide care and complying with lawful directions or requests under legislation.
• Core conditions for all registered providers: These may include complying with the Code of Conduct for Aged Care, complying with any workforce registration requirements and protecting a person’s rights and privacy.
• Category-specific conditions of registration: These may include obligations relating to provider governance, delivery of care and services, compliance with the Aged Care Quality Standards and requirements to demonstrate a commitment to high quality care for certain providers.

Provider Accountability

Measures to improve provider accountability include strengthening the power of the regulator, risk-based monitoring of registered providers of aged care and a revised complaint model that centres the experiences of older people and allows greater oversight and intelligence gathering.

Other measures under consideration include:

• Revised regulatory powers, including compliance notices similar to those operating in the disability sector, with the potential of civil penalties for providers who repeatedly break the rules.
• More wide-ranging enforcement action including enforceable undertakings, cancelling or varying a provider’s registration and potentially criminal offences where death or injury results from a provider’s negligence or recklessness.
• Greater access to compensation for older people affected by provider misconduct, either as a private right of action or with the assistance of the regulator.

Transitioning to the New Model

At this stage we don’t know when the transition to the new model might take place. What we do know is that the Department is proposing a single date for transition, with efforts to prepare the sector taking place in the lead up to the transition date. This preparation will involve work to align the sector with the new provisions of the Act, including:

• deeming certain approved providers into their respective registration categories, meaning they would not have to make an application for registration immediately upon transition
• staggering registration periods for each category of registration, avoiding a scenario where all providers apply for re-registration simultaneously
• providers who are subject to compliance or enforcement measures will see these out under the old arrangements. More details about this approach will be forthcoming.

More Information

• Department of Health and Aged Care: A new model for regulating Aged Care, Consultation Paper No.2, Details of the proposed new model
• Department of Health and Aged Care: Developing a new model for regulating aged care