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Who cares … Arcare? Aged care providers still charging for services never provided, regulator hiding

by Dr Sarah Russell | Jan 3, 2024 | Business, Latest Posts

Aged care operators are charging elderly residents fees for services that are not provided. Dr Sarah Russell exposes Arcare and calls for Minister Anika Wells and regulators to step up.

Some aged care providers are a law unto themselves. Although Australian Consumer Law makes it illegal for a business to accept payment for products and services that are not supplied, some aged care businesses wilfully break the law. Residents in these aged care homes are charged for services they do not use. 

Residents may be charged for services such as an internet connection, irrespective of whether they use the internet. Teetotallers may also be charged for wine with dinner. Rather than protect residents from this financial abuse, the Minister for Aged Care and the national regulator of aged care services continue to turn a blind eye.

According to legislation, additional services can only be charged if the resident “receives a direct benefit or has the capacity to take up or make use of the services”. Aged care providers must not only regularly review a resident’s ability to derive a benefit from the additional care or services but also itemise these additional services in a monthly statement.

Arcare a case in point

When Mr and Mrs Jones entered an Arcare residential facility, the contract included an Additional Services fee of $20 per person per day. So what did this buy them? A choice of menu for lunch and dinner; a selection of wine and beer with dinner; weekly hot cooked breakfast; exclusive use of the private dining room; weekly pre-dinner drinks; weekly high tea; daily newspaper in communal areas; wireless internet in your private suite; exercise classes; Foxtel, and local small group outings.

Other items listed in the agreement included a welcome gift on arrival, exclusive use of a private dining room and two meals for family and friends on the first day. So residents had to pay for their own welcome gift – seriously?

When Mr and Mrs Jones’ daughter questioned paying an extra $140 each per week, Arcare agreed to reduce the fee to $70 per week, on the condition that Foxtel was removed from each room. Was Arcare charging her parents $10 per day to access Foxtel?

Each month Arcare provided an invoice. This invoice included ‘daily care fees’, ‘means tested fees’ and ‘additional services’. However, these ‘additional services’ were not itemised – so there was no way of knowing which of these ‘additional services’ Mr or Mrs Jones had used. Did they have wine for dinner or attend an exercise class?

When the daughter realised that Mr and Mrs Jones were not using any of the additional services, she asked to have the fee abolished. However, Arcare refused. So, the daughter made a formal complaint to the aged care regulator – Aged Care Quality and Safety Commission (ACQSC).

Arcare invoice

Arcare invoice

Eight months after her initial complaint, and after numerous follow-up emails, the daughter was advised that ACQSC had not been able to resolve the complaint. 

The daughter did not give up. She contacted ACCC, the Commonwealth Ombudsman and the Office of the Australian Information Commissioner and Older Persons Advocacy Network – all to no avail. She then went back to ACQSC. Surely it was their job to ensure aged care providers acted lawfully.

Regulator ACQSC finally lifts a finger

Her persistence paid off. Fourteen months after her initial complaint, ACQSC issued a ‘Notice of Intention to Give Directions (Notice)’ to Arcare. According to this Notice Arcare: 

  • charged an additional services fee for a bundled package but did not provide an itemised cost for each service;
  • had no review process to assess a consumer’s capacity to benefit from the additional services provided; and
  • included care and services in a package of services already required to be provided under the Quality of Care Principles 2014 (e.g. a communal newspaper, a choice of meals at lunch and dinner, exercise classes and bus outings). 

In response to the Notice, Arcare proposed a range of actions it would take. However, these actions were not sufficient to address the complaint. So ACQSC issued Directions to Arcare. These Directions outlined the actions Arcare was required to undertake (including necessary timeframes) in order to meet its responsibilities under the Aged Care Act 1997. Arcare was required to:

  • take action to provide an itemised list (including costs) for each element of its bundled package of additional fees; 
  • provide accurate information about the availability and access arrangements for the included care and services; 
  • only charge for additional care and services where care recipients are able to derive a benefit from them;
  • cease charging for items that should be provided under the Quality of Care Principles 2014; and 
  • provide refunds where they have charged additional fees unlawfully. 

Regulator out-lawyered by Arcare

Arcare challenged the Directions Order in the Federal Court. It soon became clear that ACQSC was no match for Arcare’s lawyers. After a year of legal shenanigans, ACQSC advised the daughter to negotiate directly with Arcare for compensation. However, the daughter was not fighting only for her parents. She was fighting for all Arcare residents who are charged for services they do not use.

Arcare continues to charge additional fees irrespective of whether residents use these services. They also do not provide an itemised list (including costs) for each service (see recent invoice). 

Although the aged care regulator is fully aware that Arcare and other aged care providers are not acting in accordance with aged care legislation, ACQSC has washed its hands. ACQSC simply does not have the power to enforce residents’ legal rights. What is the point of the government introducing a new Aged Care Act without a strong regulator with the power to enforce legislation?

In 2018, Regis and Japara were forced to repay residents millions of dollars that had been charged to clients under the guise of an ‘asset refurbishment fee’. The ‘asset refurbishment fee’ was declared illegal by the Federal Court. It’s well past time for Anika Wells, Minister for Aged Care, to step up and declare it illegal for aged care providers to charge residents for services that they are not receiving in an aged care home.

Profits over People: in-home care a cash bonanza for greedy aged providers

Dr Sarah Russell is a public health researcher. She is the Principal Researcher at Research Matters and Chair of Progressives of the Peninsula. She was formerly the Director, Aged Care Matters.

Don't pay so you can read it. Pay so everyone can!

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Pay so everyone can!

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