Aged-care giants seek payment free-for-all

The largest for-profit aged-care providers in the country want the ability to charge any ‘private fee’.

The largest for-profit aged-care providers in the country want the ability to charge any “private fee” without being blocked by the government, despite receiving billions of dollars in taxpayer subsidies.

Documents obtained under freedom-of-information laws show the Aged Care Guild — the peak body for eight providers ­including listed giants Regis Healthcare and Japara — asked the Coalition to include a specific reference to the “appropriateness of regulation of private fee arrangements” when it dev­eloped terms of reference for the sector-wide royal commission.

The three publicly traded aged-care companies in Australia paid $412 million, or more than 90 per cent of their net profits, to shareholders in the past three years.

An analysis of financial records shows Regis Healthcare, Japara and Estia Health had total revenues of more than $5.2 billion in that same period but almost three-quarters of that — $3.7bn — came via the taxpayer in the form of government subsidies worth as much $217 a resident a day.

Estia used to be a member of the guild — which also represents Bupa, Allity, Opal and the McKenzie Aged Care Group — but withdrew its membership as part of a plan to transform the business after a series of bad headlines.

Guild chief executive Matthew Richter urged the government to consider “the long-term funding model to provide certainty and long-term sustainability for the sector … The funding model should consider both access to care and the ­appropriateness of regulation of private fee arrangements”.

At least three of the guild’s members — Regis, Japara and McKenzie — were last year forced to repay tens of millions of dollars to residents after ignoring a Department of Health bulletin in 2016 and continuing to charge a bogus fee called an “asset refurbishment charge” or “asset replacement fee”.

The Federal Court found last year there was no legislative basis for charging the fee ­because it was not optional and “it is not a fee from which the ­individual resident derives any benefit: it does not secure for the resident better living conditions (or) additional services”.

Mr Richter said the royal commission must be set up in a way that did not “undermine confidence” in the sector, which costs taxpayers $18bn a year.

Federal funding of aged care is already expected to rise to $22bn by 2022.