Are you paying too much in Home Care Exit Fees?

Recent Home Care Changes

From 27 February 2017, in a significant change to the healthcare system, The Australian Government transformed the way home care packages (HACC packages) work.

Now an allocated home care package follows the consumer, allowing them to choose the approved home care provider that can best meet their needs and offers them the best value for money.

The important difference is that there is now consumer choice. The consumer needs to find the best deal for themselves. It is now a competitive market and providers need to offer the best value for money.

Consumers can change providers if they can find a better deal, and the funding for their package follows them to the new provider. Consumers now have the power of choice and incumbent providers need to lift their game!

Exit Amounts

If a client chooses to leave their current home care provider for another provider who will give them better service or cheaper fees, then the current provider is allowed to charge a fee to exit their service. This charge is called an Exit Amount. The Exit Amount is deducted from any unspent package funds.

The Exit Amount is intended to cover the administrative costs associated with accounting and transferring any unspent package amounts to the new provider. These costs are overheads of the current provider.

However, it is not mandatory for a provider to charge an Exit Amount. In fact, a provider can change nothing at all upon exit if they wish! It’s up to the policy of the provider.

Wouldn’t you be suspicious of a provider who charges large exit fees?

Apart from the case of a consumer moving to a new location, if a provider is offering great service and reasonable rates, there is no reason for a consumer to change providers at all!

The Exit Amount must be stated in your home care agreement, which is created and signed before services first commence. Your provider needs to make clear the exit fee up front before you sign the care agreement.

The exit fee is entirely negotiable, and in fact, you can insist on $0 for the exit fee if you like. You have the power. The provider cannot force you to agree to any amount of exit fee.

Reasonable Exit Fees

The government has not released any guidance what they consider to be an appropriate amount of an exit fee. At The CareSide, we see a broad range of exit fees as we help our clients negotiate a better deal with their provider. Some fees are exorbitant, in the order of $4,000! These are outrageous and are unjustifiable in our opinion.

Some providers charge a few hundred dollars, and we consider this reasonable. We do not believe that anything over $1000 is fair to the consumer. Home care packages are meant to provide care to people, not pay for the overheads of large care providers.

Of course, the best exit fee to pay is $0. This is what The CareSide believes is the MOST appropriate fee to offer to a consumer. We believe that if a provider truly gives excellent service and genuinely cares for their clients, they don’t need to use artificial barriers like exit fees to retain their customers.

A provider does not need to charge an exit fee, and we believe that if they have your best interests at heart and truly give great service, they won’t need to charge you one.

If a provider needs to rely on large exit fees to keep you with them, then that is a red flag that you will be given poor service and also be charged high daily care fees. This is how they are covering costs and using you for excess profit making.

A provider is required to publish their maximum exit fee on the myagedcare website. If your exit fee is more than that published on managed care, contact The CareSide, and we will negotiate with the provider on your behalf to have the exit fee changed. We can also take the case to Advocare – the public advocate for home care.

If you do change providers, the maximum amount that a service provider can deduct from your package is the exit fee. They cannot charge you in advance for services not yet performed. They also cannot keep any contingency fees. These must be refunded to your package on transfer.

They can never charge you directly out of your private funds to cover the exit fee. If there is not enough money left in your package to cover the exit fee, it does not matter; they cannot charge you more than what is in your package. You will never be out of pocket and never be in debt.

If the exit fee published on the myagedcare website has increased since the home care agreement was signed, they can still only charge you the original exit fee that you signed upon agreement.

Do Something About It!

We see many cases of providers charging secret fees and hiding costs in complex financial statements. Some financial statements look like they require an accounting degree to understand! This is a deliberate tactic on the part of some providers to confuse you and hide large fees so that you don’t know what you’re being charged.

If you would like to get more service out of your home care package, we offer a FREE review of your current home care agreement and the financial statements from your provider to ensure that you are being charged reasonable fees, and only the fees that you expect. We can tell you what fees you should expect, what is reasonable and what is unfair!

Contact us on 1300 85 40 80 to find out more. The CareSide is your source for the best value home care in Australia.

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