MP demands cap on 'exorbitant' Home Care management fees

3 Feb 2021
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Federal Member for Mayo Rebekha Sharkie has called on the Government to introduce pricing caps to stop the ‘exorbitant’ management fees being charged to older Australians receiving in-home care, with some providers gauging more than 45 per cent of a package in fees and charges.

“Home Care have a legislative responsibility to keep package management fees and business costs to reasonable amounts but there are absolutely no guidelines to specify what ‘reasonable’ actually means and the Government’s claim that pricing transparency and market forces will keep prices down is just not the reality being experienced by our seniors,” Rebekha said.

“My office has received complaint after complaint from constituents whose family members are paying between a third and up to a half of their annual package in so-called 'management fees'.

“One elderly woman in my electorate, who needs far more care than she currently receives, managed to secure a Level 2 package worth $1,270 per month, $575 of which will be taken out in management fees; and another lady with a Level 3 package has to pay nearly $10,000 of her $35,000 annual package in management fees to her not-for-profit provider.

“Another constituent on a Level 4 package is paying $1,086 a month in care management fees. This equates to a quarter of her package, funds that could and should be focused on her care.

“Aside from the high fees, there are no details on what this money is being spent on or why her package requires so much management.

“I have raised this issue with the Minister for Senior Australians and Aged Care Services, Richard Colbeck, in the past and I’m consistently told that pricing transparency and market forces will drive down prices as people shop around.

“But this assumes that there is sufficient competition in the first place, which often isn’t the case in regional areas, and it assumes that people have the capacity or they have family members who can shop around and compare pricing schedules that are not always easy to decipher.

“The current system is not working. The Government needs to stop the rorting and introduce pricing caps.”

Ian Henschke, Chief Advocate for National Seniors Australia, supports Rebekha’s call for price caps.

“It’s time to put a stop to these unconscionable fees. We need to cap them so both recipients and tax payers get value for money," Mr Henschke said.

From 1 July 2019 all home care providers were required to publish their pricing information in a new standardised schedule on the My Aged Care service finder, to provide a copy of their pricing to potential customers and to outline all costs in any Home Care Agreement.

The pricing schedule includes a section on administration frees which is divided to care management and package management, but elderly recipients are rarely provided with any detail on what the management fees and administration charges actually provide.

“I’ve heard complaints of providers constantly finding reasons to charge for care management changes which are clearly examples of price gauging," Rebekha said.

“Private providers I have spoken to say 15 per cent is a reasonable amount to charge for care and package management for a Level 3 or 4 package level.

“We have 100,000 Australians on a queue for home care. When they finally get a package, they need every cent to go towards hands-on care, not bureaucracy.

“If the Government won’t act and fix this rorting, that I think is akin to elder abuse, I will introduce a Private Member’s Bill and demand change to the current legislation.

"My Aged Care funds should be for the care of elderly people, not lining management pockets.”

Rebekha discussed the issue with Jennie Lenman on 5MU's SA Today program. You can listen here.

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