Providers achieve care minutes consistency but challenges remain

Aged care providers are standing on solid financial foundations after settling into a consistent run of form for their average daily subsidy and care minute totals in 2024, according to the latest findings from Mirus Australia. 

Their April data release is headlined by what Mirus Australia Co-Founder, Rob Covino is labelling as a new Average Daily Subsidy (ADS) ceiling of $268. That’s on par with March results after five months of attempting to break through it.  

“Average daily subsidy has been trading sideways since the final Fair Work and budget indexes were implemented last December. AN-ACC now represents the hedged funding model constructed by the RUCs Study,” Mr Covino said. 

“The sector slid by 15 cents across April. However, the regional facility type of MMM=5 experienced a pick up of 75 cents and it broke through the $280 ADS threshold.”

“As AN-ACC must account for direct care time obligations with each accepted funding classification, we can expect more modest sideways performance. With the full mechanism released and care minutes now mandatory, we are operating within a recovery model for our direct care wage costs.“

A quick comparison with data from six months ago shows an industry average of $255.50 and $266.70 for MMM=5. Both have increased drastically since then in a strong return for providers across the board.

Mr Covino was quick to remind us that AN-ACC is not a revenue growth model that continuously increases, and long-term trends like this are relatively unlikely.

Providers are also maintaining a fairly steady approach to resident assessment activity, as voluntary claiming decreased slightly to under 5% of total Medicare claims being reclassified by providers.

“Despite this modest level of reclassifications, there was a significant decline in the average age of AN-ACC claims, which dropped nearly 6.5% to 50.44%. This indicates that providers are engaging with the AN-ACC mechanism as designed, aiming to balance funding with their direct care performance,” he added.

“We anticipate this trend to persist as the regulator begins engaging with services based on risk profiles defined using both a service’s QFR and Medicare data. Additionally, as the sector transitions away from the maximized claiming approaches it has historically relied on.”

The An-ACC age, that is the percentage of claims that have not been reviewed within the past 12 months, has dropped from just over 61% in late 2023 to 50.44% in April.

Workforce minutes stay steady

Consistency is also the keyword where care minutes are concerned. Mirus Australia data shows that industry-wide average total care minutes per resident per day have marginally increased to 203.97. 

Meanwhile, a minuscule 0.05% drop in Registered Nurse minutes has the April average at 39.77, suggesting that workforces are enjoying a good period of stability. Increases in non-care minutes (e.g. hospitality) and allied health are also good to see. 

The next challenge will be elevating eligible care minutes to the industry-wide benchmark of 215 minutes (including 44 RN minutes) per resident per day by October. That’s only five months away yet both key indicators have not seen drastic growth in 2024. 

“Providers continue to keep one eye on the October Direct Care requirements which are set to bump up to 215mins from 200min (and 44mins from RNs), however RN performance has been difficult for providers to achieve the current national average results on RNs of 40mins,” Mr Covino said.

“Remember that care minute targets are determined by you for each of your services and the case mix will correspond to the service model supported by each of your facilities.”

“It appears the Department has been listening to the sector’s frustrations and is softening its stance on some initial policy implementations. In the Department’s November 2023 Direct Care Minute Webinar, they indicated the initial star ratings table would be adjusted in April/May 2024.”

“May is almost over, and you can still achieve a 3-star outcome on staffing with 0% RN care time if you exceed 115% of your total direct care target.”

He added that it’s possible for claiming behaviours to artificially inflate these figures, similar to how the ADS could be inflated under ACFI.

“It’s essential to bear in mind that the RUC Study hedged the AN-ACC tool, creating accountability for delivering more care time when additional Government funding is obtained to uplift the classifications. However, I have yet to encounter instances of providers adjusting their AN-ACC case mixes when a resident demonstrates reablement,” he said.

Elsewhere, occupancy rates continued to hover around 88% as permanent admissions dropped and respite usage rose.

“Admissions have continued to bolster providers as occupancy levels approach the heights experienced in 2016. In April, there was a slight slowdown in occupied bed days, and the elusive 90% occupancy barrier still appears to be the imposed ceiling,” Mr Covino added.

“Nevertheless, we remain confident that this barrier will be surpassed before the end of the calendar year.”

Rob Covino’s full analysis of the April data release can be viewed here.