Department update – notification of a material change

Department update – notification of a material change

The Department of Health recently updated its notification of a material change form and revised its guidance around the circumstances in which approved providers should notify the Secretary of the Department of any change of circumstances that materially affects a provider’s suitability to provide aged care.

Importantly, by updating the Notification of a Material Change form, the Department has removed the direction not to report key personnel changes, which means providers must recommence reporting changes to key personnel to the Department.

Suitability to provide aged care

As all approved providers would be aware, there is an ongoing responsibility to ensure that the organisation is able to provide quality and safe aged care services at all times. Events or circumstances which might materially affect the suitability of an approved provider to provide aged care may vary and should be considered on a case by case basis, however, the Department has provided some examples, including:

• if the approved provider is no longer an incorporated organisation;
• if the approved provider is unable to meet any of the home, flexible or residential care standards;
• if the approved provider is unable to manage its financial responsibilities including subsidies and care recipient’s fees and payments;
• if the approved provider makes a change which may affect the rights of aged care recipients;
• if the approved provider makes substantial changes to its organisational or governance structure such as:
  • entering into a brokerage arrangement with a third party for delivery of clinical care; or
  • use of a management company;
• if the approved provider makes a change to its key personnel.

Ultimately it is a matter for the provider to determine whether an event has occurred which might materially affect its suitability to provide aged care.

Updated notification of a material change form

On 31 October 2019, the Department of Health updated its notification of a material change form. This form must be used to give notice of all material changes, including where an approved provider wishes to update organisation and key personnel information.

The new form:

• removes the direction not to report key personnel (the Department now considers that changes in key personnel may be material to a provider’s suitability and as a result will generally need to be reported);
• has added fields to collect third party information;
• has updated existing fields to make them more specific; and
• has revised the privacy notice.

Changes to position on key personnel

The Department’s position on reporting changes to key personnel has changed over time. Most recently, the Department’s position was that changes to key personnel generally did not need to be reported (except in relation to disqualified individuals).

Under these recent changes, the Department’s position is now essentially that changes to key personnel are likely to be material to a provider’s suitability and as a result will generally need to be reported. Previously,

It is therefore vital that providers have a detailed understanding of how key personnel are defined under the Aged Care Act to ensure compliance with these new reporting requirements.

What do you need to do?

Following the update from the Department, all approved providers:

• should review their individual circumstances to ensure that there have been no material changes which affect their suitability to provide aged care, including:
  • any arrangements with third party organisations where the arrangement is considered a material change to previous operations; and
  • as at 1 November 2019, any current key personnel who the organisation has not previously notified the Department about.
• must report any new key personnel changes within 28 days.
• must report any other material changes within 28 days after the change occurs.

What if you do not comply with the above requirements?

Failure to comply with the material change requirements may result in a sanction being imposed pursuant to the relevant provisions of the Aged Care Act.

For further information please contact a member of our Health , Aged Care & Retirement Villages team.

Authors:
Julie McStay | Partner | +61 7 3338 7522 | [email protected] Walsh | Partner | +61 7 3338 7906 | [email protected] Roganova | Senior Associate | +61 2 8248 5881 | [email protected] McMahon | Associate | +61 7 3338 7959 | [email protected]