Will the Ombudsman’s star rating critique lead to change?

The Commonwealth Ombudsman’s latest statement that he would have commenced a formal investigation into the aged care star ratings system if the Department of Health and Aged Care had not already started its own is another red flag for the measurement tool.

In early October, the Acting Commonwealth Ombudsman Penny McKay voiced her concerns over the star ratings in a submission related to the Aged Care Bill. She said the system was not sufficiently meaningful to help people make decisions about their aged care.

In fact, she said it may mislead or misinform them.

Now, it’s the turn of the returned Commonwealth Ombudsman Iain Anderson to criticise a ratings system that has previously been questioned over its relevance to cases of non-compliance. 

Mr Anderson noted this in his statement when he acknowledged that:

“Since January 2024, the media has reported public concerns that aged care star ratings (star ratings) may not be providing meaningful information about residential aged care services’ quality of care.”

He continued by explaining that his Office looked into the star ratings system and reaffirmed Ms McKay’s wording that it is not sufficiently meaningful to help older people make informed decisions about aged care. 

And while the Department has advised the Office improvements are on the way, he would have commenced a formal investigation if one was not already underway. 

“Given an independent evaluation into star ratings is currently underway, 2 along with proposed legislative changes, I have not commenced a formal investigation under the Ombudsman Act 1976,” he added. 

“I instead encouraged the department to consider and act on my concerns. I make this statement to provide assurance to the public that my Office is monitoring this issue.”

The Department commissioned an independent evaluation to measure how the star ratings have improved the quality of care in residential aged care homes. It will also look at how it has supported transparency and informed decision-making. 

Allen and Clarke Consulting is conducting the independent evaluation with the final round of surveys and interviews completed in August. No date has been attached to the publication of the findings. 

Previously, the Aged Care Quality and Safety Commission updated service providers on the elements of non-compliance that influence star ratings.

Effectively, only a non-compliance decision can bring down a star rating, rather than pure instances of non-compliance. 

“Under the rules for the star rating system, there is a difference between non-compliance and a non-compliance decision,” Executive Director of Compliance Management Group Peter Edwards previously explained.

Non-compliance is defined as the failure of an aged care provider to meet one or more of the regulations and standards as set out in the Aged Care Act 1997, whereas a non-compliance decision is when the Commission uses one of its formal regulatory powers in response to identified non-compliance.

“A finding of non-compliance in itself does not impact a service’s star rating; rather it is only where the Commission then uses its formal powers to require a service to take corrective action that a service’s star rating will be impacted.”

This was echoed by the Commonwealth Ombudsman who said, “This means that in some instances the Commission may find a provider is not meeting the required standards, potentially for an extended period, but its star rating does not change.”

And while the Ombudsman himself did not criticise the Commission’s method of using discretion at times to resolve issues – not all non-compliance requires a formal notice – he said there should still be clarity regarding those choices. 

“It is important that publicly available information about the compliance rating clearly sets out why some instances of noncompliance are not relevant to a provider’s star ratings and directs the public to other information about the level of care provided by individual providers,” he added.

The Department does expect some critical changes to the star ratings system over the next 12 months. It has advised the Ombudsman’s Office that the compliance rating will transition to a graded assessment when the new Aged Care Act commences.

This may offer better opportunities for transparency and detail. However, as the Ombudsman again outlines, it is incredibly difficult for older people and the general public to access and understand ratings on My Aged Care without accessing multiple pages on the website. 

“… people may struggle to comprehend how a provider can have a 3-star compliance rating when the Commission is not satisfied that the provider is ensuring its workforce is competent,” he said. 

Therefore, while not a recommendation of the Ombudsman, it may be beneficial to have a system where details are clear and easily accessible, but users can also easily compare provider ratings without having to search for each facility individually. 

More information regarding complaints and the complaints-handing process is another Ombudsman request that would add depth to the research process. 

When ending his statement, Mr Anderson remained steadfast in his call for the Department to perform assurance checks on all data used. There have been concerns over self-reporting in the Quality Indicator space.

The Department, though, appears confident that the new Aged Care Act will strengthen its ability to monitor the star ratings system. Combined with the independent review, this suggests the system can be improved, although the question remains how soon.