It has already been 1 year of AN-ACC funding! In this analysis we will investigate industry trends from October 1, 2022 – September 30, 2023 from our MyVitals dataset.
Variable AN-ACC Funding and Rate Change
The average Variable AN-ACC funding per resident is currently $134.35. Excluding the July 1 Starting Price increase ($216.80 to $243.10) the increase would have only been to $119.82.
Our data shows that CRT (Cost of Revenue Turnover – where funding declines due to appropriately classified residents departing at higher funding than new admits) has increased each quarter – which you might think indicates reclassification initiatives cover CRT. However, we believe this is not representative of effective reclassification programs over the industry, but rather evidences the significant underfunding that existed when AN-ACC started. This time last year, AN-ACC was new and many shadow assessments were quite old and needed reclassification by the time October 1 arrived. As a result, Residents were departing on lower AN-ACC than they should have.
In addition, our Funding Audits, when extrapolated to the industry, show that the industry is still underfunded by about $546.3m.
Care Minutes
Providers are still divided about strategies to adopt the mandatory Care Minute requirements.
We believe that resident care and outcomes should always be the priority in this area, and that ensuring you are well-funded for the care you need to deliver is the foundation of being able to do this. The Government have been very clear in saying this is the approach they fully support “A failure to meet Care Minute targets will not be viewed in isolation, but as a source of intelligence that helps us build a picture of risk.” and “We expect providers have a plan to manage the root cause of not meeting their Care Minute obligations, that will enable them to eventually meet the required targets.” (Source: https://www.health.gov.au/resources/webinars/mandatory-care-minutes). We, and the Government, are under no delusion about the complexity of attracting a skilled workforce in the current climate, and an agency solution to meet the requirements is certainly not sustainable. On the surface – we are seeing that regulatory action will not be taken on Care Minutes alone, so long as you are compliant in other areas and have a workforce strategy in place to work towards meeting the requirements.
Occupancy
There has been an overall decline in occupancy since 2015-2016 FY, however, there has been an uptick of 3.4%, to 85.3% in permanent occupancy (89.1% including respite), in this period.
Resident Workflow
Since Oct-22, initial classifications have increased 16.3 per cent, departures have increased by 24.1 per cent and reclassifications have increased by 11.6 per cent.
In Quarter 4 2022 the average annualised loss per departure was $9,950 while in Quarter 3 2023 the average departure loss was $15,400. To counter this loss a robust reclassification program must be in place.
The gross daily impact of CRT on clinical revenue since Oct-22 is as follows:
- Additional $3.87m daily funding from initial classifications
- Loss of $5.16m daily funding from departures with initial classifications
- Additional $1.12m daily funding from reclassifications
- Overall net loss of -$177.7k of daily funding, or on average -$220 per day for a facility the equiv. of 1 resident’s funding.
This can be rectified through an active reclassification workflow. Due to the newness of AN-ACC, we also postulate that departed residents during this period may have been under classified, and so, expect the cost of CRT to grow, resulting in an even larger shortfall.
Summary
The highlighted challenges may be impacting your organisation, but are masked by the low starting point at the beginning of AN-ACC and the significant rate change.
If you’d like to reflect on your Organisation’s first 12 months of AN-ACC – we’ve prepared a First 12 months of AN-ACC Report – reach out to request one for your Organisation.
Peter Morley
CEO & Co-owner
