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Hospital Circular 11 /2005

Date Issued: 3 June 2005

Distribution: Public Sector Residential Aged Care Services

Subject: Commonwealth Government 2005 Aged Care Approvals Round - Public Sector Endorsement Process

1. Background

On 28 May 2005, the Commonwealth Government Minister for Ageing, the Hon. Julie Bishop MP announced that 11,000 new places across Aged Care Planning Regions in each state and territory in the 2005 Aged Care Approvals Round (ACAR). Under this Round, Victorian aged care providers are able to apply for 863 residential places, 1,127 Community Aged Care Packages (CACPS) and 225 Extended Aged Care in the Home (EACH) packages.

The Commonwealth Government allocates places targeting priority communities of interest and/or special needs groups and also considers the extent to which proposals address the following key issues:

• Improving access to aged care services for people with special needs
• Bed readiness
• Dementia care and
• Respite Care

As approved providers, Public Sector Residential Aged Care Providers are eligible to apply for additional places under the Aged Care Approvals Round. However, given the range of considerations for the State, public sector agencies are required to seek and obtain the State’s endorsement before submitting for places under the 2005 ACAR.

The State’s policy directions for public sector residential aged care services will guide decisions on the nature, location and level of public sector involvement, both at a broad level and for individual services. Public sector services operate within a broader residential aged care system that includes non-government sectors. Within that context, State policy is to contain public sector growth and focus on maintaining and upgrading existing services.

Expansion of Public Sector bed numbers is not considered necessary in metropolitan and larger rural and regional centres, where providers in the non-government sectors are prominent. Growth may be considered in smaller rural communities where it is needed to ensure adequate service access and where the rate of growth is low and unlikely to attract new providers from other sectors.

The State Government has the overall responsibility, exercised in conjunction with agencies, of ensuring that 4250 public sector high care places and 2274 low care places achieve and maintain the required standards of buildings and care. This involves a substantial capital responsibility, including assisting current public sector facilities meet certification standards under the Commonwealth’s Aged Care Act (1997). The State Government has allocated a further $40.9 million in the 2005-2006 budget to four public sector residential aged care building redevelopment programs.

As the State is already fully committed to meeting current capital responsibilities and it is anticipated that, as in 2004, Public Sector Providers will not be eligible for Commonwealth Government Capital Grants, agencies proposing to apply for residential places under the ACAR will be required to demonstrate that they have sufficient funds in reserve to undertake the required capital works within the Commonwealth Government’s specified timelines.

Agencies will only be able to rely on internal borrowings as external borrowings or loans from financial institutions require an approval process which cannot be managed in the timeframe and the outcome of which cannot be guaranteed.

While the ability to self-fund a residential capital project will not in itself ensure that a proposal is endorsed by the State Government, the lack of demonstrated capacity to self-fund such works will prevent endorsement of proposals.

In relation to CACPs and EACH service provision, it is critical that any such expansion is considered in the context of strengthening the existing local and regional service system, consolidating service configurations and enhancing client access. Proposals will need to demonstrate an understanding of, and the capacity to, address the specific requirements of community care service provision, including access to the required range of skills and expertise.

It should be noted that there are no specific State subsidies or supplements provided for CACPS or EACH service provision. Therefore, if ACAR applications are successful the CACPs/EACH services will need to be delivered within the Commonwealth Government funding allocations.

Any new residential aged care place allocated by the Commonwealth Government to a Victorian PSRACS in the 2005 ACAR through an application which was not endorsed by the Department of Human Services (DHS) will be ineligible for state funding.

2. Endorsement Process for Public Sector Residential Aged Care Providers

The endorsement process applies to all Public Sector agencies proposing to submit to the 2005 ACAR for an allocation of residential places, CACPs or EACH packages.

The process will require interested Public Sector providers to submit their proposal to DHS in the first instance, addressing the criteria detailed below. Proposals are to be documented using a DHS format similar to that expected to be used by the Commonwealth Government and seeking common information.

Proposals will be evaluated centrally with regional consultation and input. All queries should be directed by email to PSRACS.ACAR@dhs.vic.gov.au.

3. Process and Timelines for Proposals

In recognition of the strict timelines for submission of an application to the ACAR, it is important that proposals provide accurate and complete information using an electronic version of the proposal format. Electronic copies of the proposal format will be provided on request to PSRACS.ACAR@dhs.vic.gov.au. Proposals will be assessed against the criteria detailed in Item 5 based on the information provided.

To ensure the process is managed effectively and expediently a contact officer from your agency must be nominated on the proposal form. DHS will address any further enquiries and correspondence concerning proposals to this person.

Proposals must be received by the close of business (5 pm) on Wednesday 15 June 2005.

3.1. Address for Proposals and Further Information Requests

Proposals should be submitted electronically to PSRACS.ACAR@dhs.vic.gov.au. Enquiries should initially be raised with your regional contact and if required submitted for a central response through the e-mail address above. A copy of your proposal is to be concurrently provided to the appropriate DHS regional contact.

4. Process and Timelines for Response by DHS

A DHS panel will consider all proposals and evaluate them against the criteria detailed in item 5.

DHS will provide formal notification to the provider about the outcome of their proposal with sufficient time for those whose proposals are endorsed to submit an application to the 2005 ACAR.

Timelines may be subject to amendment in line with numbers and quality of proposals received and ACAR timelines.

5. Endorsement Criteria

DHS will review each proposal based on the following criteria.

5.1. Demand and Supply

DHS will be examining demand and supply against existing Commonwealth benchmarks and information on existing or likely new providers including those from other sectors.

The agency must:

• Specify the target region and Commonwealth community of interest/special needs group to which the proposal relates;
• Demonstrate:
  • expected growth in/unmet demand in the community of interest/special needs group in specified timeframes, and
  • that the proposed increase in numbers and types of places reflects the level of expected increase in demand.
• Demonstrate that:
  • where the agency is proposing to develop a new service type, it is the appropriate agency and it has the capacity, skills and expertise to provide such a service.
• Demonstrate that the proposed expansion or development:
  • is essential to maintaining access to services for people in the community of interest/special needs group, including the likelihood of other organisations providing this service.
  • will be a well integrated component of (i.e. will strengthen and not fragment) the service system, and
  • is the most appropriate approach to meeting demand in the identified area.

5. 2. Viability

The agency must:

• Provide information on its current financial performance including its surplus/deficit trend over the past three years.
• Demonstrate that an increase in places maintains or improves the agency’s financial viability, incorporating a consideration of the agency as a whole entity and the additional operating income and expenditure projections.
• Where the proposal relates to Low Care places, the agency must provide documentation on its accommodation bonds policy and intended charges.

5.3. Capital (applies only to residential care proposals)

The agency must:

• Provide business planning information detailing the source and amount of capital funds available for the proposed project and the projected capital development costs.

5.4. Quality

The agency must:

• Demonstrate that the residential aged care service has achieved Commonwealth accreditation and certification.
• Demonstrate that the agency is able to sustain an expansion of service both in terms of care and management expertise (including case management and community based service provision expertise for community care proposals).

This policy is effective immediately.
For queries on the above matters please contact:
Frank Carlus on 9616-7795 or e-mail frank.carlus@dhs.vic.gov.au

Approved by:

Chris Brook
Executive Director
Rural and Regional Health and Aged Care