Ensuring compliance: the new Aged Care Act and AI

The Australian aged care sector is undergoing significant reform, with both home and residential care providers facing new regulatory requirements under the new Aged Care Act 2024, which comes into effect from 1 July 2025. One of the biggest compliance challenges providers face under the new regulations is adherence to the Strengthened Quality Standards. ANNETTE HILI, General Manager ANZ at AlayaCare, explains how AI may be able to help.

Reforms under the new Aged Care Act aim to enhance care quality, improve transparency and ensure that the older person receiving care is at the centre of the services. The changes span multiple areas, including home care funding structures, pricing regulations and increased clinical care requirements in residential care.

Providers must adapt to these updates while maintaining compliance with the Strengthened Quality Standards, a key component of the new framework. AI is already being used to automate workflows and increase efficiency in home and residential care. Amid this changing regulatory and compliance environment, it will increasingly become a critical tool for providers to remain compliant while continuing to provide high-quality care.

Major changes in the sector

One of the most significant changes affecting both home and residential care providers is the introduction of Strengthened Quality Standards. These standards will ensure that aged care services are delivered with a focus on high-quality outcomes, whether in residential aged care facilities or home care settings. For home care providers specifically, the new Support at Home program introduces a funding model in which providers will draw 10% of participants’ budgets for care management, down from 20% allocated to care management previously. This decision is a significant disruption for providers.

The role of the case manager is crucial in coordinating services, ensuring compliance and supporting older Australians to get the most out of their funding. The consequence of this reduction in funding is that every provider must look at alternative options to find efficiencies or absorb costs in some way. AI and agentic workflows will play a key role in supporting this change — they will be integral to streamline any processes and administrative tasks that do not require a human touch, freeing case managers’ time to execute critical tasks for clients instead.

Other significant changes include that participants will be classified into one of 10 new categories, a significant shift from the previous four levels of Home Care Packages. Eight of these classifications will cover ongoing care, while the remaining two will focus on short-term restorative care and end-of-life care pathways. The program will also introduce a defined list of services, which will be more prescriptive than previous categories.

While the government plans to cap service prices based on recommendations from the Independent Health and Aged Care Pricing Authority (IHACPA), providers will set their own rates for the first 12 months following the program’s implementation. The delay in IHACPA setting rates offers home care providers some time to further review their practices and continue to look for ways to improve efficiency and manage costs.

Residential aged care providers also face substantial changes, with some of these already having come into effect. Aged care places will be assigned directly to older people accessing government-funded services, giving them more choice and control over their care. The new Act also includes increased protections to ensure autonomy and dignity. The Act and new standards have been focused on areas highlighted as requiring further improvement during the Royal Commission, including dementia and clinical care.

From 1 October 2024, the minimum required care minutes in residential aged care facilities increased to an average of 215 minutes per resident per day, with at least 44 minutes delivered by a registered nurse, ensuring greater clinical oversight. The new Act implements a Statement of Rights for a rights-based approach, ensuring that the older person always remains at the centre of the system.

These changes are without doubt delivering positive changes for older Australians and the sector; however, there is a change management journey that is required for all providers to re-educate staff on the changes and the new standards to ensure continued compliance in the new regulatory landscape. This is another area in which AI could have a significant impact on operations. From automating processes to summarising and synthesising the information necessary for clinicians and care workers to remain compliant, AI can be adopted by organisations to ease the increased administrative burden that comes with any major change.

AI and compliance with strengthened quality standards

One of the biggest compliance challenges providers face under the new regulations is adherence to the Strengthened Quality Standards. These enhanced standards emphasise person-centred care, requiring that providers not only deliver high-quality services, but also produce tangible proof that they are meeting the requirements.

Given the heightened scrutiny and the increased volume of documentation and operational processes required, AI is emerging as an essential tool to help aged care providers maintain compliance. AI-powered platforms can enable providers to identify risks, document care delivery and streamline the reporting process, particularly for the Clinical Care Standard — the aged care standard currently with the most reported non-compliance.

By synthesising and analysing client documentation, AI tools can flag at-risk clients so that clinicians and care workers can ensure that services align with regulatory expectations. This proactive approach reduces compliance risks while enhancing care outcomes. Tools such as these can play a critical role in accreditation and audit readiness — with providing evidence of adherence to the Strengthened Quality Standards being essential.

The future of AI in aged care

As the aged care sector continues to evolve, AI will be instrumental in supporting compliance. By automating compliance tracking, streamlining documentation and proactively identifying risks, AI-powered solutions enable providers to confidently navigate regulatory requirements. With the help of AI tools, organisations can enhance care quality, improve operational efficiency and ensure they remain fully compliant with all of the changes this major shift will bring.

Annette Hili is General Manager ANZ at AlayaCare.

Top image credit: iStock.com/Mr Vito