More balance needed for aged care reforms

Impending regulatory changes are set to redefine Australia’s aged care sector by introducing civil penalties, criminal offences, and a whole host of new responsibilities for providers. However, uncertainties remain regarding their practical implementation and providers need to stay engaged as details emerge, writes DEBBIE SAGE, Wills and Estates and Aged Care Partner at Attwood Marshall Lawyers.

Australia’s aged care sector is on the cusp of its biggest shake-up in 27 years. A brand new Aged Care Act, which prioritises high-quality care and is centred on the rights and needs of older citizens, is due to roll out later this year.

Stemming from the recommendations laid out in the 2021 Royal Commission into Aged Care Quality and Safety, this new Act seeks to address the shortcomings of the outdated 1997 Aged Care Act, deemed unfit for purpose today.

The new Aged Care Act brings extensive changes across many areas of care.

This article focuses only on the new statutory duties and penalty regimes that have been introduced in the exposure draft — areas which the author believes require further consultation and review.

What providers need to know

Expanded duties

The exposure draft of the Act, published in December 2023, outlines new statutory duties for both “registered providers” (such as aged care facilities) and “responsible persons” (individuals with authority or significant influence over care, including aged care workers).

Registered providers will have a fundamental obligation to ensure, so far as “reasonably practicable”, the health and safety of individuals receiving funded aged care services, mirroring existing workplace health and safety frameworks. Meanwhile, “Responsible persons” will have a separate statutory duty to ensure they exercise “due diligence” and are complying with their duties under the Act. This will require them to take reasonable steps to discharge their obligations effectively and adhere so far as “reasonably practicable” to the new Statement of Rights and Statement of Principles.

Compensation schemes

New compensation avenues will be available to target instances of “serious, poor quality and unsafe care”. These “compensation pathways” will offer redress to affected individuals with a six-year statutory limitation period to bring a claim.

Stronger penalties

The Act introduces heightened civil and criminal penalties, including strict liability offences for registered providers and responsible persons. The new civil and criminal penalties involve conduct that exposes an individual in their care to a risk of death, serious injury, or illness or involves a significant failure that is part of a systematic pattern of conduct, whereas the strict liability offences involve conduct which amounts to serious failures and/or results in death, serious injury or illness.

Need for review

Interpreting what is “reasonably practicable” within the new expanded duties is already causing significant debate and concern. Careful consideration of individual circumstances will be required to strike a balance between a resident’s preferences, including their right to dignity of risk, and their safety.

And while the new compensation and penalty regimes mark a crucial step towards a more accountable system, further review is needed to ensure that any penalties imposed are proportionate to the offence.

Providers will understandably have concerns about the implications of the proposed reforms, particularly over the strict liability offences that do not exist in adjacent sectors such as disability and health.

The inclusion of criminal penalties, for example, was not recommended by the Royal Commission but is part of an election promise. There are fears in the industry that this could discourage whistleblowing, deter skilled workers from entering the sector and reduce accurate incident reporting. The inclusion of criminal penalties without considering fault raises important questions over fairness and practicality.

Boards and governing bodies, often staffed by volunteers, will no doubt be wary of continuing their involvement due to the risk of personal liability, at a time when creating and maintaining robust risk management strategies should be the focus.

Preparing for the future

While details are still emerging, providers can get ahead by reviewing their current risk management strategies and discussing potential insurance coverage with insurers. This includes directors’ and officers’ insurance, and public liability insurance to manage potential liabilities.

While there are uncertainties over the operation and effectiveness of the “compensation pathways” as currently drafted, providers should be preparing policies and systems to manage this.

Amid the uncertainty surrounding the final penalty regime, two certainties remain: responsibilities will evolve, and a form of penalty will remain. We should aim for penalties that reflect the severity of the offence without overburdening staff or providers.

And finally, it’s important that providers anticipate new responsibilities and take pre-emptive measures to mitigate risks and strive for high-quality care.

Open communication between providers, regulators and insurers will be key to a smooth transition during this period of significant change for the aged care sector.

Collaborative efforts involving all stakeholders are essential to refine the proposed legislation, address concerns, and pave the way for a resilient and sustainable aged care sector.

Image credit: iStock.com/stevanovicigor