Issue number:
23/2012
Date Issued:
22 Nov 2012
Issued to:
Chief Executive Officers, Executive Directors of Nursing, Managers Aged Care, Chief Finance Officers, Public Hospitals and Health Services
Purpose:
To advise you of the Department of Health endorsement process for Public Sector Residential Aged Care Providers wishing to submit an application for additional Residential Aged Care Places, Home Care Packages and Zero Real Interest Loans in the 201213 Aged Care Approvals Round.

1. Background

On Saturday 10 November 2012 the Australian Government’s Minister for Mental Health and Ageing, the Hon Mark Butler MP, announced the availability of more residential aged care places, home care packages and loans under the 2012–13 Aged Care Approvals Round (ACAR). The closing date for applications is 21 December 2012.

Details about the availability of residential priorities and number of places, home care packages, capital grants and Zero Real Interest Loans have been released in the Australian Government’s 2012–13 Aged Care Approvals Round – Essential Guide.

As in past rounds, the Australian Government will allocate places targeting priority communities of interest and/or special needs groups and consider the extent to which proposals address the following identified issues:
  • The provision of residential care places
  • The provision of home care packages
  • The provision of residential respite care
  • Communities or areas with demonstrated poor or limited access to existing services
  • The provision of care for people with dementia and/or challenging behaviours, and
  • The demonstrated need to restructure.
As approved providers, Victorian public sector residential aged care providers are eligible to apply for additional places under the ACAR and Zero Real Interest Loans but are not eligible for capital grants.

2. Department of Health Endorsement Process

Residential Places

The endorsement process applies to all public sector providers proposing to submit to the 2012–13 ACAR for an allocation of residential places or a Zero Real Interest Loan.

The process will require interested public sector providers to discuss their proposal prior to submitting it to the department in the first instance. When submitting, proposals for residential places need to be documented using the Australian Government’s ACAR application form and address the criteria below and this may require additional documentation to address the department’s endorsement criteria. Proposals need to be submitted by 14 December 2012, a week prior to the Australian Government’s closing date. Proposals will be evaluated centrally with regional consultation and input. All queries should be directed by e-mail PSRACS.ACAR@dhhs.vic.gov.au

Home Care Packages

While it is not necessary to seek the department’s endorsement of applications for home care packages under the 2012–13 ACAR, public sector providers are required to advise their regional contact of their intention to apply for home care packages prior to submitting proposals and provide a copy of their application to PSRACS.ACAR@dhhs.vic.gov.au

The substantially increased number of home care packages to be made available this year and over coming years provides an opportunity for health services to be more extensively involved in provision of Commonwealth funded home care packages to be delivered in rural areas. That would assist in responding to unmet local demand and allow services to adapt their service mix to changing community preferences. It may also contribute to future health service sustainability.

The department has made submissions to the Department of Health and Ageing (DoHA) about access to packaged care in smaller rural communities and the potential role of health services in leveraging existing infrastructure to provide sensitive responses to local needs. The current ACAR has targeted people who live in rural and remote areas as a particular need in all non-metropolitan regions.

For more information refer to the DoHA 2012–13 ACAR website http://www.health.gov.au/acar2011 – see Home Care Packages and the Questions and Answers document.

3. Residential Aged Care Places and Zero Real Interest Loans

Public sector providers operate within a broader residential aged care system that includes

non-government sectors. Within that context, the State has largely focussed on maintaining and upgrading existing services.

As the State’s capital budget is already fully committed to meeting current capital responsibilities and public sector providers will not be eligible for Australian Government Capital Grants, providers proposing to apply for residential places under the ACAR will be required to demonstrate that they have sufficient funds in reserve to undertake the required capital works within the Australian Government’s specified timelines.

If an agency is considering an application for a Zero Real Interest Loan (ZRIL), it should be noted that ZRIL are subject to the external borrowing approval process as required under the Health Services Act 1988. Department endorsement of the ZRIL application does not guarantee or imply consequent formal approval for external borrowing. Public sector providers will not be able to accept any ZRIL offer until the latter approval is obtained.

While the ability to self-fund a residential capital project will not in itself ensure that a proposal is endorsed by the State Government, the lack of demonstrated capacity to self-fund such works will prevent endorsement of proposals.

The department will review each proposal based on compliance with each of the following criteria.

Demand and Supply

Demand and supply will be measured against existing Australian Government benchmarks.

The public sector provider must:

  • Specify the target region and Australian Government community of interest/special needs group to which the proposal relates,
  • Demonstrate:
    • Expected growth in/unmet demand in the local community of interest/special needs group in specified timeframes, see link: http://www.health.gov.au/acar2011
    • That the proposed increase in numbers and types of places reflects the level of expected increase in demand,
  • Demonstrate that the proposed expansion:
    • Is essential to maintaining access to services for people in the local community of interest/special needs group, including the absence of likelihood of other organisations providing this service,
    • Will be a well integrated component of (i.e. will strengthen and not fragment) the local service system, and
    • Is the most appropriate approach to meeting demand in the identified local community.

Viability

The public sector provider must:
  • Provide information on its current financial performance including its surplus/deficit trend over the past three years,
  • Demonstrate that an increase in places maintains or improves the provider’s financial viability, incorporating a consideration of the provider as a whole entity and the additional operating income and expenditure projections, and
  • Provide documentation on its accommodation bonds policy and intended charges. It should be noted that from 1 July 2014 the distinction between high care and low care places will be removed, allowing consistent accommodation arrangements for all new residents. While lump sum or periodic accommodation payments will be available for all new residents, ‘bond retentions’ will be discontinued.

Capital and Zero Real Interest Loans

The public sector provider must:
  • Demonstrate that the proposed capital development is consistent with its agreed strategic capital priorities and service plan,
  • Provide a comprehensive business plan relating to the proposed expenditure detailing the source and amount of capital funds available for the proposed project and projected capital development costs,
  • Demonstrate that they have sufficient funds in reserve to undertake the required capital works within the Australian Government’s specified timelines without compromising the viability and sustainability of the service, and
  • In addition, in relation to Zero Real Interest Loans the provider must demonstrate that the loan application is consistent with the provider’s agreed strategic capital priorities and service plan, and that the provider has the capacity to meet the loan conditions and how it will meet these conditions.
  • It should be noted that ZRIL are subject to the external borrowing approval process as required under the Health Services Act 1988. Department endorsement of the ZRIL application does not guarantee or imply consequent formal approval for external borrowing. Public sector providers will not be able to accept any ZRIL offer until the latter approval is obtained.

Quality

The public sector provider must:
  • Demonstrate that the residential aged care service has achieved Australian Government accreditation and certification, and
  • Demonstrate that the provider is able to sustain an expansion of service without compromising accreditation and quality outcomes.
Any new residential aged care place allocated by the Australian Government to a Victorian PSRACS in the 2012–13 ACAR through an application without the required endorsement by the department will be ineligible for State funding on an ongoing basis.

4. Process and Timelines for Proposals

Residential Places

The endorsement process for residential places requires public sector providers to submit their proposal to the department for consideration of endorsement prior to lodgement with DoHA.

In order to expedite the endorsement process it is important that providers firstly, give notice of intention to develop a proposal through their departmental regional/program contact, and secondly that written proposals provide accurate andcomplete information.

The proposed ACAR applications should be e-mailed to PSRACS.ACAR@dhhs.vic.gov.au. Proposals will be assessed against the criteria detailed in Section 3.

To ensure the process is managed efficiently, a contact officer from the service must be nominated on the proposal form. The department will address enquiries and correspondence concerning proposals to this person.

Proposals must be received by the close of business (5pm) on 14 December 2012, a week prior to the Australian Government’s ACAR application closing date.

Home Care Packages

While it is not necessary to seek the Victorian department’s endorsement of applications for home care packages under the 2012–13 ACAR, public sector providers are required to advise their regional contact of their intention to apply for home care packages prior to submitting proposals and provide a copy of their application to:  PSRACS.ACAR@dhhs.vic.gov.au 

5. Process and Timelines for Response by the Victorian Department of Health

The department will provide formal advice to providers on the outcome of proposals in sufficient time for endorsed proposals to be lodged with DoHA.

For queries regarding this circular please contact Mr Frank Carlus, Manager Public Sector Residential Aged Care Services on: (03) 9096 7795 or e-mail frank.carlus@dhhs.vic.gov.au or Gillian Dickson-Hughes on (03) 9096 8327 or email gillian.dickson-hughes@dhhs.vic.gov.au

Approved by:

 

Jane Herington
Acting Executive Director

Wellbeing, Integrated Care and Ageing