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Cost recovery charges for unannounced compliance checks illegal, industry peaks say

Aged care peak organisations and some large providers have expressed concern at the Australian Aged Care Quality Agency’s plan to charge operators to conduct annual unannounced spot checks on them.

In most cases this will take the form of an assessment contact but “in some circumstances” this may be a full review audit.

The charges, which could cost the sector around $11 million annually, were announced in 2015-16 budget. Full cost recovery for accreditation “services” has been implemented. The spot visit “levy” was also announced in that budget to apply from 1 July 2018.

The charges were then detailed in the Australian Aged Care Quality Agency (ACAQA) Draft Cost Recovery Implementation Statement (Draft CRIS) released last month.

The Draft CRIS also reiterates Government’s intention, also first announced in 2015-16 budget, to explore the introduction of private accreditation services under a market-based approach.

The statement details the applicable levy based on bed numbers and including discounts, or fee waivers, for less than 25 beds, those receiving a viability supplement, or both.

Both Aged & Community Services Australia and Leading Age Services Australia have questioned the legality of the charges describing them as “inappropriate”, “unreasonable” and a “significant cost burden”.

LASA warned they could “threaten the independence of the accreditation process”.

Catholic Health Australia raised “significant concerns” including the doubling of the quality agency’s cost recovery fees.

The agency has not released the CRIS submissions, which closed on 21 July, citing confidentiality, but ACSA, LASA and CHA provided AAA with their submissions or positions.

The National Aged Care Alliance, with over 50 members – including unions, seniors advocacy groups and professional associations involved in care – did not make a submission.

Given that the 2015-16 budget announced both cost recovery measures, it is possible that the delay in implementing the spot check costs was due to uncertainty about the legality of applying it as a “levy” compared to the accreditation “fee” as challenged by ACSA and LASA.

The difference would have had taxation implications, as both peaks pointed out in their submissions.

CHA has also called for CRIS to consider the outcomes of the South Australian Aged Care Innovation Hub and its government supported trials for greater autonomy of high performing services.

What next?

“After reviewing the submissions, the quality agency will be advising the sector on the key feedback received and our next steps … in late August,” a quality agency spokesperson told AAA.

Industry peaks agree that charges for unannounced visits should not proceed while there was legal uncertainty and are seeking discussions with AACQA and government.

CHA said it considered that measures to extend cost recovery of accreditation-related services should be put on hold, and reviewed.

Providers contacted by AAA reported they wanted to ensure they were getting “value for money” from the quality agency’s services.

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2 Responses to Cost recovery charges for unannounced compliance checks illegal, industry peaks say

  1. B. Concerned July 26, 2017 at 2:47 pm #

    Given the state of the industry at the moment and the number of homes under sanction or subject to review audit can the Govenrment seriously consider the use of privatised accreditation systems? Why would an organisation choose an accrediation service who is likely to fail them? The current accreditation process needs review with Accreditation being a one time thing and spot checks undertaken randomly and continuously – at no cost directly to industry. If accreditation standards are found not to be met, accrediatation should be lost and must be reapplied for at cost to the organisation running the service.

  2. Sue Ostojic, Executive Officer SA Innovation Hub July 27, 2017 at 4:09 pm #

    Agree with CHA that the SA Innovation Hub, a community of practice of NFP providers, did explore greater autonomy for high performing services. It was intended to reflect the differing levels of service outcomes in the sector and explore how such may be considered with particular emphasis to good Governance, Quality and Consumer Engagement. More information can be viewed at This site also contains the independent evaluation of the SA Innovation Hub.

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