Royal Commission into Aged Care Quality and Safety – one year on – Lexology

Just over 12 months ago, the Royal Commission into Aged Care Quality and Safety (Royal Commission) delivered its Final Report entitled 'Care, Dignity and Respect' to the Governor General (Final Report). The Final Report was tabled in the House of Representatives on 1 March 2021. But just over a year later, how have the recommendations and the sector progressed?

The Government responded to the Final Report on 11 May 2021, accepting the vast majority of the Royal Commission's 148 recommendations, either in whole or in part. In addition, record funding of $17.7 billion was allocated in the Federal Budget in May 2021 to support 'once in a generation reform to aged care to deliver respect, care and dignity to our senior Australians'. The government's response recognised the need for wide-ranging reforms, including a new, right-based Aged Care Act centred around the support and care needs of older Australians, their right to access high quality and safe aged care and the need for a new aged care program.

A further $632.6 million was allocated to 'improve aged care for senior Australians' in the Mid-Year Economic and Fiscal Outlook, which included a range of funding targeted at improving aged care governance and sustainability. Although the detail around many of these reforms continues to take shape, the direction of the reforms is clear.

Reflections: one year on since the Final Report

In the year that has passed since the Final Report was delivered, significant legislative change has occurred. Reform efforts continue in the aged care sector, notwithstanding the significant impact of COVID-19.

The Serious Incident Response Scheme (SIRS) commenced on 1 April 2021, putting in place new arrangements and obligations on approved providers to identify, report, manage and resolve serious incidents which alleged to have occurred, in residential aged care. The SIRS is set to be expanded to home care settings from 1 July 2022.

The Aged Care and Other Legislation Amendment (Royal Commission Response No. 1) Act 2021 (First Amendment Act) passed Parliament on 24 June 2021. It significantly reformed the obligations on approved providers in relation to the use of restrictive practices. The First Amendment Act implemented protective measures through the need for restrictive practices to only be used as a last resort. The First Amendment Act also implemented a new home care assurance scheme, designed to increase oversight of the delivery of home care services and made minor amendments concerning the Aged Care Financing Authority.

The Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Act 2021 (Second Amendment Bill) introduced to the Senate on 22 November 2021 however, is yet to be debated, or passed by the Senate. The Second Amendment Bill was designed to implement significant reforms including:

The first part of the Second Amendment Bill was intended to commence on 1 March 2022, which would have coincided with the one year anniversary of the Final Report. However, due to delays in the Senate, it is now unclear when the Second Amendment Bill will pass into law, or when it will commence.

New Aged Care Act

On 1 March 2021, the Government announced that work had commenced on a new Act. This was a key recommendation in the Final Report.

Little is known about the new Act at this stage other than that it will be 'consumer-focused' and is planned to come into effect on 1 July 2023 'subject to parliamentary processes'. The Government has noted that key to the development of the new Act will be 'consultation with senior Australians and other stakeholders'. To facilitate consultation, the Government has launched an Aged Care Engagement Hub.

Throughout 2021 and into the first months of 2022, approved providers have had to rise to the challenge of adapting to changing legislation and policy settings and grapple with the complexities of increased regulatory oversight. This challenge has been complicated by the ongoing COVID-19 pandemic, and the specific challenges that the aged care sector has faced in keeping residents safe whilst also meeting the expectations of the broader community. Although the challenges of COVID-19 will start to shift, it seems likely that the regulatory landscape will continue to evolve, with the implementation of sector reforms.

The aged care sector going forward

Short term legislative reform

The future of the Second Amendment Bill is uncertain as it remains before the Senate, but will require further amendment as the anticipated commencement dates have already passed. It is notable that an amendment proposed by the Greens proposing a range of amendments to the Second Amendment Bill was recently made in the Senate. However, beyond this activity, there has been limited legislative progress with respect to the Second Amendment Bill.

New Aged Care Act

Recently, former Royal Commissioner Lynelle Briggs AO publicly stated that an exposure draft of the new Act would need to be published by the second half of 2022, in order to be passed by the July 2023. It is unclear if the government is working towards this timeframe. However it would seem likely that for the government to meet its planned implementation date for the new Act, that we will see an exposure draft in coming months.

The new Act is the centrepiece of the Government's reform agenda. It will embed a human rights approach and is focused on ensuring timely access to safe, high quality care, that is based on assessed need. It seeks to integrate care services enabling consumers to seamlessly transition across the care continuum to access the care and services that meet their needs, regardless of the care setting.

While the scope of the duty is yet to be defined, the characteristics of 'high quality care' have been articulated in the recommendations of the Royal Commission and include care that is:

'High quality care' must adopt a human rights, person-centred approach and be designed to respond to the needs and aspirations of those receiving care.

High quality care shall:

This proposed statutory duty contains elements that are both subjective the wishes and aspirations of the person receiving care and objective care that is safe and based on clinical assessment.

Whilst the detail is yet to be articulated, the scope of this new duty is a shift from the existing common law duty owed by providers.

The government has also flagged that a number of other significant measures, including:

2022-2023 Budget

With the 2022-2023 Budget approaching later this month, it is possible that further funding may be announced for aged care. In an election year, it is possible that the government may take the step to provide more funding in key areas such as workforce and even further funding for home care, particularly given the recent media attention on aged care.

Election season

With the upcoming federal election, significant uncertainty remains concerning the legislative reform. The stated position of the Morrison Government on planned reform to the aged care sector is clear from the government's response to the Final Report.

The position of the Opposition is less clear. At the time of writing, the Opposition's 'policies and commitments' section of its webpage is silent as to policies relating to the aged care sector. The Opposition does however state in the ALP National Platform, as adopted at the 2021 Special Platform Conference (National Platform) that the view of the Australian Labor Party is that the Royal Commission found that older Australians' 'care has been neglected in a system in crisis' and that 'the Royal Commission's recommendations threaten to leave older Australians without the quality care they desperately need'. There are two alternative conclusions that can be drawn from this. First, it could be said that reform in the aged care sector has bipartisan support, and accordingly, if there were a change in government, the planned legislative reform would be implemented without change. Alternatively, it could be argued that the Opposition has indicated in its National Platform a view that the Royal Commission recommendations do not go far enough to 'fix' aged care sector, and should there be a change in government, the upcoming legislative and regulatory reform could deviate from the roadmap set forward by the Royal Commission. However, we note that the Australian Labor Party has not yet released its aged care policy but has committed to doing so closer to the federal election.

It is difficult to know which of these alternatives will eventuate, creating a degree of uncertainty for the aged care sector until after the upcoming election.

What's next for the aged care sector?

Much like the last year, the next year promises to be as significant, with a number of initiatives in the pipeline.

'User pays' and co-contributions

While not specifically addressed by the Royal Commission, it is noteworthy that a number of large providers have meaningfully contributed to the debate on co-contributions and introduction of a 'user pays' model. There have been calls for a greater balance between the capacity of individual's to contribute towards their accommodation and other living expenses in residential aged care and those care recipients who are genuinely in need and unable to fund their care. However, neither the Royal Commission nor the government has indicated a willingness to consider a 'user pays' model. A continuation of the current funding structures is likely to continue for the foreseeable future.

Star rating system

The Department of Health recently announced the commencement of interviews for the consumer experience component of the new star rating system for residential aged care. This star rating system which is due to commence in April 2022 will include quality indicators, including service compliance, staff care minutes and consumer experience components. The findings from these interviews will be detailed in consumer experience reports to be published on My Aged Care. These reports will also feed into the facilitys consumer experience and overall star rating. This initiative implements recommendation 24 of the Royal Commission's final report and is anticipated to be live late 2022.

Regulatory integration with adjacent sectors

Late last year, the government announced that work to align 'regulation across the aged care, disability and veterans care sectors' had commenced and '[would] significantly improve quality and safety for participants and consumers'. We have seen this come through in a number of recommendations in the Final Report. This effort to achieve regulatory alignment was subject to a consultation period and is aiming to, amongst other things, 'cut red tape and make it easier for service providers and workers to deliver the highest levels of care and support'. While this initiative appears to be an example of the implementation of recommendation 25 of the Royal Commission, to deliver an integrated approach to care, the exact implications remain to be seen.

Workforce Strategy

Over the last year, many providers have struggled to attract and retain workers. The workforce challenge has been exacerbated throughout the COVID-19 pandemic, particularly given the closure of our borders and furloughing of staff. While the Royal Commission called for the government to 'urgently establish a scheme to improve the quality of the current aged care workforce', a comprehensive aged care workforce strategy has not yet been articulated. Last month, the government announced an 'aged care workforce bonus' of up to $800 for eligible aged care staff in home care and residential aged care (Bonus). Whether this Bonus will be sufficient to effect tangible change in the aged care workforce is yet to be seen. However, some in the sector have criticised this Bonus initiative as 'inadequate'.

Fair Work Commission work value case

In a joint submission to the Fair Work Commission, the Health Services Union and the Australian Nursing and Midwifery Federation continue to seek a 25% increase in wages for more than 200,000 aged care workers (Joint Submission). While the government has not made a submission, the Australian Labor Party has confirmed that, in the event that they are elected, that a Labor government would support the Joint Submission. The Fair Work Commission is due to hold a hearing with respect to this matter later this year, with a decision due shortly thereafter.

Reform in the aged care sector is ongoing, and at this stage, much of the way forward is uncertain. We'll continue to provide updates as the situation evolves. Please contact us for advice on preparing for the upcoming changes.

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Royal Commission into Aged Care Quality and Safety - one year on - Lexology