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Home care providers face fresh criticism over admin costs

Andrew Wilkie told Parliament that community care administration fees amounted to rorting

Andrew Wilkie told Parliament clients had complained of ‘ridiculous administrative costs’

Tasmanian independent MP Andrew Wilkie has accused community care providers of charging their clients excessive administration fees on a scale that amounts to “systemic rorting” of government subsidies.

Mr Wilkie told Federal Parliament last week he had received many complaints from older people and their families about “ridiculous administrative costs” being levied on consumers.

In one example described to Parliament, Mr Wilkie said a home care package client was being charged $165 per hour for basic house cleaning and showering services once non-direct care costs were added to their individual statement.

He said overcharging by many service providers was “on a scale that a reasonable person would characterise as systemic rorting.”

“Some service providers are delivering very little and padding out the invoice with ridiculous administrative charges which in some cases is quadrupling the total bill,” he said.

The Minister for Health and Aged Care Sussan Ley said the government expected providers to charge a reasonable administration fee and requested further details of the case raised by Mr Wilkie.

“It is, I agree, very disappointing to hear about providers who charge such extravagant administration fees and effectively bring a bad name and reputation to so many who do the right thing,” Ms Ley told Parliament.

She said the home care reforms commencing in February next year would give clients greater choice over their provider and make it easier to switch to another organisation if clients were unhappy.

Fees seen as ‘excessive’ by many

Aged care advocacy services report that admin costs are causing angst for some clients.

Greg Mahney

Greg Mahney

Greg Mahney, member of the Older Person’s Advocacy Network and CEO of Advocare, the aged care advocacy service in Western Australia, said that calls from home care clients to his organisation have increased by at least 50 per cent since the introduction of CDC packages and individual budgets.

“Admin fees have upset quite a lot of clients. They are seen as excessive by many,” he told Community Care Review.

However, while Advocare has seen cases of administration costs that appear to be unreasonable, in other cases the problem was one of poor communication where providers have failed to adequately explain the purpose of the fees being charged, Mr Mahney said.

Since the early days of CDC there had been improvements to the way individual statements have been presented to clients, as well as increased efforts by some providers to operate more efficiently to reduce overhead costs, he said.

Pat Sparrow

Pat Sparrow

Providers reject claims

Aged and Community Services Australia CEO Pat Sparrow rejected the claim that excessive fees were widespread and said the majority of home care providers provided “affordable, quality services to individuals.”

“There may be some providers not doing the right thing but this does not represent systemic rorting,” she told Community Care Review.

As CCR has previously reported, disquiet over high administration fees among consumers has been an ongoing issue in the sector and has sparked a call by consumer peak body Alzheimer’s Australia for the introduction of a cap on fees that can be charged (read that story here).

Have your say by commenting on this story below 

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16 Responses to Home care providers face fresh criticism over admin costs

  1. Ted Wards September 22, 2016 at 2:28 pm #

    I can tell you that it is happening Australia wide by certain large organisations, however the industry warned the Government as far back as 2012 that this would happen. Clients are now paying for CEO’s on exorbitant wages, companies with top heavy management, middle level management cars, big fancy buildings and so on. Some organisations are so focused on getting as many clients as they can they are not even looking at how they are going to service the people properly and are providing very little in the way of actual service provision. The Government were also warned that this system does not work and that England dropped this system because it did not work 7 years ago. Yet this has all been ignored.
    I cant wait until all these large so called not for profits scale themselves out of this industry and the private companies take over and deliver what is needed.

  2. Shalla September 22, 2016 at 2:36 pm #

    I have heard through community networks some package providers are charging between 38 – 50% administration fees on packages

  3. Jeff Ryan September 22, 2016 at 3:28 pm #

    You need to understand the Pricing structure of the businesses involved. They vary and are allowed as per Government Legislation to charge for direct service, case management and administration. The Client can determine the value provided.

    The amount of Unspent funds is averaging 15% of the Funding- this will then go back to clients and the Government.

    This appears again to be an uninformed presentation by a Politician.

    Clients have Choice now and can change Provider

    The Government outsourced these services some time ago and business either not for profit or for profit manage them. The key word there being Businesses. Let’s have some discussion on the inefficiency of the Government and the supporing Public Services. Does any one cost the downtime and overhead there ? Mr Wilkie and Co need to do some home work

  4. Kylie Lambert September 22, 2016 at 10:29 pm #

    I am accountant and have owned Sydney-based private in-home care provider Daughterly Care for 18 years.

    I have been checking approved provider proposed budgets and monthly statements for the last 14 months for free because I wanted to see what was actually happening.

    Its been eye opening for elders and their baby boomer adult children and I.

    Consumer directed care is powerful because it shines a light on organisations taking advantage of elders. Its appalling how some organisations take advantage of elderly people – organisations that are ‘not for profit’ and ‘for profit’.

    February 27 2017 will sort these unethical providers out – elders will run a country mile for fair pricing, good value and don’t take advantage of them.

    I have seen statements where 63%pa of all government and private money is taken as fees before a dollar of care is bought.

    I have seen a $954 set-up fee for a cleaning service, then cleaning fees of $51 per hour + 27% admin fees + 20% unspent budget where the elder is told they can’t spend that + review fees + assessment fees, and then they sent in a 20-year-old male who couldn’t clean or speak English – he had come to Australia to learn English.

    I have seen 10% GST illegally charged to the client’s package by numerous well-known charities.

    The fee I don’t like the most are the “exit fees”. In my opinion, they should be banned – why should an elder have to pay an exit fee when they are leaving because they have had poor service and been charged over-inflated prices by an approved provider. They are slugged a fee that penalises them for exercising choice – its just not fair or right.

    The government has done elders a great service giving them the power to take their government funding to any approved provider come 27 February 2017.

  5. Steve September 22, 2016 at 11:58 pm #

    There is huge rorting going on & most elderly people are not even able to understand it or feel dis-empowered to question it. The rights afforded to the clients is not even being fully explained to them by some providers. Its simple – a full audit by government on all CDC packages on this, and an open and transparent investigation into the financial abuse by providers who are abusing there roles to rort money from the elderly. The clients are consumers & are also afforded the rights under consumer laws but in the main the elderly and their families are not aware of there rights. The minister needs to write personally to every elderly person making them fully informed of there rights and choices under the CDC packages, and invite them to inform the minister if any clients are being overcharged & if they were engaged as co-partners in negotiations for the charges upfront or not? Its simple if a provider has failed to negotiate openly with the client fairly as a co-partner then they will be required to re-address the process since CDC started & refund all fees and charges. A client should be entitled to engage & accountant to assess & audit the client statements etc. Clearly make all providers been accountable & transparent to their actions. STOP the rorting. Admin fees should never be higher then 5% but solely based on actual services provided not by a % fee. Charging by a % exposes clients to sharing the costs of the business not as it should be as being a fee for service basis only.

  6. Melissa September 23, 2016 at 9:35 am #

    Thats just silly – I can pay a private cleaner and personal care worker directly and end up with less out of pocket costs…

  7. K. Edmunds September 23, 2016 at 1:54 pm #

    Not all providers of aged care support services stand to make a profit, nor are they meant to. I work for a not-for-profit, community-based organisation on the North West Coast of Tasmania and we are not in the business of exploiting our clients by charging unrealistic fees. We are funded by both the State and Federal Government, to provide community home support services and have received either little or no growth funding for years. Apart from a small team of paid workers, we rely totally on the goodwill of volunteers to provide our support services to clients and their carers. We have almost 1400 clients and carers across several municipalities and the lack of growth funding has made it difficult to withhold a fee increase. Due to the rising cost of the resources needed to do the job, it is uncertain how long our current fee structure will be sustainable. We provide Transport, Home Maintenance, Spring Cleaning and Social Support services and charge a minimum fee for service.The Government could work more closely with organisations at the coal face to gain a clearer understanding of who we are, what we do and perhaps establish why there is such differences in the fees that each provider charges. Privatizing the industry will not solve this issue.

  8. Annie September 23, 2016 at 2:30 pm #

    I’m with Melissa and I think that a lot of older people will be thinking the same thing as their charges become visible.
    Classic example is day programs. Why pay $200 for an art class when you can get one for $20 from the local community centre? Surely there is scope to utilise the skills of the various sectors working together to add benefit where they best fit.

    To cut the providers a little slack – I think the back of house costs are possibly artificially inflated at the moment due to the huge works underway in their ICT programs. They need to be able to work in an e-system into the future in order to be sustainable and these things have high up-front implementation costs.

  9. Nirav September 24, 2016 at 1:02 am #

    Pls understand this is a cycle.. an over-charge at one end would definitely affect the other end and the knots in between. For instance, I work at a commercial cleaning company in Perth, WA, if I over-charge, a product supplier would have done that to me prior, or my cleaning workers team demand higher salary due to their budget increase in day-to-day life

  10. Dave September 25, 2016 at 1:21 pm #

    Here we are again.

    Clients identify a problem and providers cry foul.

    Further evidence that the industry just cant be trusted to be let off the chain. How boringly predictable: ACFI, behaviour supplements, care packages…we just cant resist grabbing a bigger share from that pot of free guv’mint money. Both sides shoulder the blame: providers who can’t spell ‘ethics’ and governments that keep doing the same thing but hope for different results.

    CDC is a thinly veiled strategy for government to divest itself of its obligations to our elderly. You can dress it up as ’empowering the consumer’, but the real message is ‘you’re on your own’

  11. Drew September 27, 2016 at 11:23 pm #

    Is anyone reading and following the roadmap?

    Much more to come in this space I can assure you. The baby boomers are not dumb and more education in service provision and consumer control will change the playing field.

    Micro care market is about to be woken up.

  12. Charlie Stonehouse December 20, 2016 at 8:20 pm #

    When I signed up for my wife I was told by the care manager that they take 30% in fees however when I managed to navigate through the statements it was more like 50%. I actually sourced the Physio, Occupational therapist, Podiatrist,the only person they managed to get was the cleaner who also washed my wife. For this they take $1300 from a level 3 package per month, Im amazed that the government condone this as its their money being ripped off. I understand they have yet to pay the bulk of the services, do not think there will be much left. Only been 31/2 months and have seen enough, I think the council disabilities service seemed better.
    Regards Charlie

  13. Anna Millicer December 21, 2016 at 1:47 pm #

    From where I sit at Home Care Today I can tell you that we have almost as many complaints from consumers whose provider is taking 50% admin/case management, as we do from providers taking 25% admin/case management. What’s the commonality between all the complaints? Quality and transparency.

    Some of the so-called ‘low cost’ providers make up for their lower fees in other ways – ie, one provider charges $16.50 for every episode of care into their clients’ homes. For one consumer on a Level 4 package, this surcharge is levied 14 times per week costing a whopping $231.00pw on top of the actual $48p/hr for the services. Others might offer only one annual visit from a Case Manager and charge $100p/hr (or part thereof) for every visit/phone call/email/service change etc. Others will charge 10% surcharge for every service they out-source, plus enormous fees to set up a service agreement with another provider. Some charge the first week’s package costs as an establishment fee. And so on…

    On the other hand, I know of many providers charging 40-46% admin/case management but have no limitations on how often the CM will visit in one year, no fees to set up brokerage arrangements, no surcharges or penalties for living further out of town, no establishment costs, excellent issue resolution methods and active consumer engagement strategies to involve consumers in designing their CDC model. And so on…

    I know of many consumers/carers who, despite being unhappy with their provider, do not want to be told that they can simply take their package elsewhere. Portability should not be the new complaints resolution strategy for home care package consumers. Some folks might be happy to make the change, but many will not. They want to be listened to and have their questions answered. They want their provider to be ‘on their team’ and not take an adversarial approach to the important relationship that needs to exist between provider and consumer. So many consumers really value the relationship they have with the direct care staff and will tolerate all sorts of problems because they like the people who come to their home – and not surprisingly, this very often includes liking their case managers too! Many of the issues are related to the back-of-house systems that can seem quite inexplicable to consumers trying to understand a complex system.

  14. Carol February 11, 2017 at 2:24 am #

    I am seriously considering cancelling the package provided for my spouse, A monthly case management fee of $883.62 as well as a monthly administration fee of $448.81 is a rort!
    I am lucky if I get a phone call each month, I call them to say if I need help with the lawn and they tell me to just ring the lawn service myself, the lawn service people say they are waiting to be contacted by the home care company and after fiddling around 3 phone calls by me and waiting over a fortnight the lawn service arrives to do the job, As a carer I do not have time to make unnecessary phone calls, cannot afford to pay $78 a month to them and then do it myself, nor do I want to see the money spent by my govt to support my husband in his illness to be given to the pigs in troughs that call them selves care providers.

  15. Fiona March 26, 2017 at 2:10 am #

    Like Carol I am my Husband’s carer and we can’t see why the Government have set this system up as they have. Of the funds that are given to help people keep them in their homes, unfortunately only half to three quarters can be spent where they are needed. The balance goes to the service providers to do – I’m not really sure what…..From our side of thing – not much.

    There would be ways to set up this programme so the consumer isn’t forced to pay a third to half of their money to “Not For Profit” organizations and have the entire amount to use where needed.

    There are so many problems with the system that we see from this side of thing that would take far too long to go into but as usual – we the consumers and carers – don’t get asked for our opinion or any input and if you try to have a say or make suggestions nobody takes any notice or really cares less so all you can do is try and spend wisely so when you do get the option to finally have home modifications done and you only qualify for the $10000 subsidy and the total costs come to over $20000 or $25000 you actually have the money available to pay for it. (We have also been told that the money should be spent and not saved up – how do you get major work done???) like I said so many problems I just get so upset/angry about it….I have to stop or go on forever.

  16. May September 25, 2017 at 4:49 pm #

    Very distressing to read the reviews. I was hoping to read positive comments so that I could make reasonably informed decisions for Level 3 package. I’ll plough on.

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