With the 27 February changes making it easier for consumers to change approved providers, it has become even more important for providers to carefully manage consumer budgets to ensure consumers don’t “overspend”.

Trying to recover service costs from a client who is changing providers or moving to residential care can be expensive and commercially risky in this increasingly competitive environment.

It is important to understand that the Aged Care Act makes the approved provider ultimately responsible for the consumer’s expenditure. Yet with more consumer “self-managing” their packages, and Uber style providers marketing directly to consumers, it is easier than ever for consumers to “overspend”.

If the consumer has insufficient funds to cover the expenditure, the approved provider can be left in the position where they are required to pay for the services with limited ability to recover the costs from the consumer.

Providers can mitigate this risk by making clear the client is responsible for any “overspend” in their client agreements however attempting to enforce such a provision in today’s environment is commercially challenging.

As such, it is critical to actively manage the expenditure issue through the budget planning process. If necessary, you may need to reduce some non-essential services on a temporary basis until the package is brought back into balance.

It is also important to ensure that your brokered service providers invoice you promptly and keep you informed of any service changes.

Unless the provider is prepared to waive the consumer’s contributions, it is also important for providers to ensure consumers continue to pay their fees. While a provider can always deduct service charges from a client’s package, they cannot reimburse themselves for unpaid fees using the client’s package funds. The Quality of Care Principles 2014 states that “home care fees” are an excluded item, meaning a client’s package funds cannot be used to reimburse the provider for unpaid client fees. Again, ensuring the client pays their contributions is the provider’s responsibility.