Hospital Circulars

Hospital Circular 28/2008

Date Issued: 30 October 2008

Distribution: Chief Executive Officers, Executive Directors of Nursing, Managers Aged Care, Chief Finance Officers: Public Hospitals and Health Services

Subject: Commonwealth Government 2008-09 Aged Care Approvals Round – Public Sector Endorsement Process

Purpose: To advise you of the endorsement process for Public Sector Residential Aged Care Providers wishing to submit an application for additional Residential and/or Community places in the 2008 Aged Care Approvals Round.

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1. Background

On 17 September 2008, the Commonwealth Government Minister for Ageing, the Hon Justine Elliot MP, announced the intention to create more residential aged care and community care places under the 2008-09 Aged Care Approvals Round (ACAR).

The invitation to apply for places in the 2008-09 ACAR is expected to be notified on Saturday 8 November 2008. Details about the number of residential places, Community Aged Care Packages (CACPs) and Extended Aged Care in the Home (EACH) packages is also expected to be released at this time.

As in past rounds, it is anticipated that the Commonwealth Government will allocate places targeting priority communities of interest and/or special needs groups and will also consider the extent to which proposals address the following key issues:

• Improving access to aged care services for people with special needs
• Bed Readiness
• Dementia Care and
• Respite Care

As approved providers, Victorian public sector agencies are eligible to apply for additional places under the ACAR.

2. Endorsement Process for Public Sector Residential Aged Care Providers

Residential Places

The endorsement process applies to all Public Sector agencies proposing to submit to the 2008-09 ACAR for an allocation of residential places.

The process will require interested Public Sector providers to submit their proposal to DHS in the first instance, addressing the criteria detailed below. Due to the timelines expected in the 2008-09 ACAR, proposals for residential places need to be documented using the Commonwealth ACAR application form, which will be available from DoHA immediately upon advertisement of the ACAR. However, it will need to be supported with additional documentation as required to address the DHS endorsement criteria.

Proposals will be evaluated centrally with regional consultation and input. All queries should be directed by e-mail to PSRACS.ACAR@dhs.vic.gov.au

Community Care Places

While it is not necessary to seek DHS endorsement of applications for additional CACPs and EACH packages under the 2008-09 ACAR, agencies are required to advise Regional DHS of their intention to apply for community care places prior to submitting proposals. It should be noted that CACPs and EACH are expected to be provided fully within the Commonwealth funding.

3. Endorsement Requirements for Residential Places

The State’s policy directions for public sector residential aged care services will guide decisions on the nature, location and level of public sector involvement, both at a broad level and for individual services.

Public sector agencies operate within a broader residential aged care system that includes non-government sectors. Within that context, State policy is to contain public sector growth and focus on maintaining and upgrading existing services.

Expansion of public sector residential places is not considered necessary in metropolitan and larger rural and regional centres, where providers in the non-government sectors are prominent. Growth may be considered in smaller rural communities where there is a demonstrable need to ensure adequate service access locally and where the rate of growth is low and unlikely to attract new providers from other sectors. See Aged Care in Victoria for further information on the policy.

The State Government has the overall responsibility, exercised in conjunction with agencies, of ensuring that 4,085 public sector high care places, 2,107 low care places and 266 flexible places achieve and maintain the required standards of buildings and care. This involves a substantial capital responsibility, including assisting current public sector facilities to meet certification standards under the Commonwealth’s Aged Care Act (1997).

As the State’s capital budget is already fully committed to meeting current capital responsibilities and it is anticipated that, as in the 2007 ACAR, Public Sector agencies will not be eligible for Commonwealth Government Grants, agencies 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 Commonwealth Government’s specified timelines. Agencies will only be able to rely on internal borrowings as external borrowings require an approval process which cannot be managed in the timeframe and the outcome of which cannot be guaranteed.

See Borrowing guidelines for public hospitals and community health centres for further information regarding funded agency borrowing.

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.

DHS will review each proposal based on the following criteria. Each criterion must be met.

Demand and Supply

Demand and supply will be measured against existing Commonwealth benchmarks and data.

The agency must:

• Specify the target region and Commonwealth 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, and
  • 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 agency 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 agency’s financial viability, incorporating a consideration of the agency as a whole entity and the additional operating income and expenditure projections, and
• Where the proposal relates to Low Care places, the agency must provide documentation on its accommodation bonds policy and intended charges.

Capital

The agency 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, and
• Demonstrate that they have sufficient funds in reserve to undertake the required capital works within the Commonwealth Government’s specified timelines without compromising the viability and sustainability of the service

Quality

The agency must:

• Demonstrate that the residential aged care service has achieved Commonwealth accreditation and certification, and
• Demonstrate that the agency is able to sustain an expansion of service without compromising accreditation and quality outcomes.

Any new residential aged care place allocated by the Commonwealth Government to a Victorian PSRACS in the 2008-09 ACAR through an application without the required endorsement by DHS 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 DHS for consideration of endorsement prior to lodgement with DoHA.

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

The proposed ACAR applications should be e-mailed to PSRACS.ACAR@dhs.vic.gov.au. Proposals will be assessed against the criteria detailed in Item 3 based on the information provided.

To ensure the process is managed effectively and expediently, a contact officer from your agency must be nominated on the proposal form. DHS will address any further enquiries and correspondence concerning proposals to this person.

Community Care Places

While it is not necessary to seek DHS endorsement of applications for additional CACPs and EACH packages under the 2008-09 ACAR, agencies are required to advise Regional DHS of their intention to apply for community care places prior to submitting proposals.

Proposals must be received by the close of business (5pm) on Friday 5 December 2008.

5. Process and Timelines for Response by DHS

DHS will provide formal notification to agencies on the outcome of proposals with 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@dhs.vic.gov.au

Approved by:

Dr C W Brook
Executive Director
Rural & Regional Health & Aged Care Services