The Department of Health and Aged Care (Department) undertook the Home Care Packages Program Assurance Review No. 4 – Excluded Items (Review) to determine whether home care package subsidies are being used for their intended purpose. The Review was prompted following concerns from approved providers who were unclear about the existing published guidance concerning the use of health care package (HCP) funds.

Commencing late in 2023, the Review examined the monthly statements of care recipients between April and June 2023. Although the HCP Operations Manual (Manual) was updated in January 2023 to offer clearer guidance on HCP inclusions and exclusions, the Review identified ongoing confusion amongst both providers and care recipients. The Review investigated the prevalence of spending on excluded items and the reasons underlying the incorrect usage of funds, noting the most common causes of spending on excluded items arise from a misunderstanding or misinterpretation of program guidance (52% of providers).

The Summary Report makes key findings:

• Value spent on excluded items: $124,465.72 was spent by care recipients on excluded items from a sample of 1,824 care recipients (which represents 0.7% of the total number of HCP care recipients). When calculated across all HCP recipients, this equates to a 'leakage' of $70.5 million from the home care system per year. The Summary Report does not confirm who bore the cost of this 'leakage'.
• Type of excluded items: The Report identified that care recipients used their HCP funds on 377 excluded items, including food and water, phones and tablets, landscaping, major home maintenance, medications and household appliances.
• Other factors contributing to expenditure: Lack of staff knowledge or staff errors (20.7% of providers), care recipient pressure (13.5% of providers) and a lack of sound administrative processes (3.7% of providers) were identified as the key reasons for spending funds on excluded items.
• Monthly statements: The Review found that 82% of providers' monthly statements were unclear and lacked the requisite level of itemisation as contemplated by the legislative framework and, in 40% of monthly statements, items purchased using HCP Program funds were not listed in the statement in the month the purchase was made. Providers noted challenges in accurately reflecting items within the payment period, particularly where self-managed care recipients and third-party providers delay sending invoices, or where invoices are issued at the end of the month. Further, 19% of providers had monthly statements containing negative HCP Program account balances, which was noted to be of 'great concern' to the Aged Care Quality and Safety Commission and the Department. The Review noted that where a care recipient’s budget is running at a deficit each month, providers must meet with the care recipient to discuss how their needs can be met within the limits of the package budget.
• Incorrect charges: Providers are not permitted to charge package management fees where no services have been delivered to the care recipient for the calendar month, yet 18% of providers were found by the Summary Report to have charged package management in months where no care or services were provided.

The Department indicated in the Summary Report that future iterations of the HCP Manual will provide greater clarity regarding gardening services, and that further clarity should be provided regarding home modifications, waste disposal and removal services, home maintenance and the purchase of phones and tablets.

We have heard from several clients experiencing the difficulty of operating in this unclear framework. Importantly, providers must ensure that their processes and policies for managing HCP services and funds are consistent with the program requirements and their obligations as approved providers.

If you have any questions about your compliance or we can otherwise be of assistance, we would be very happy to discuss.