identification of providers at risk of getting into financial difficulty, allowing it to provide support and advice. The significance of this for risk rating is that there is more evidence and analysis available than the number of actual defaults would suggest. In addition, whilst understanding risk factors is business’ for insurers and regulators, they ‘core would need to potentially draw on the Department’s work to date, mandatory financial and prudential reporting by providers and industry analysis, to undertake risk rating. This is currently an integral part of the Prudential team’s accountability. Risk rating may present a around administrative costs. A levy that is the same per dollar of lump sum held by each provider may be easier and cheaper to administer than one that risk rates providers. Risk rating in theory should be more economically efficient, as it produces a price signal that reflects the riskiness of the provider being covered. It may be unclear whether the gains from the efficiency and equity of risk rating would be sufficient to offset the greater administrative cost and complexity. This greater complexity would include the necessity of establishing review and appeal mechanisms that allowed a provider’s risk rating to be reconsidered. Detailed consultation with aged care providers and the Department would be essential in the event that the government decides to implement a scheme that includes risk rating. APPENDIX 3: LIST OF SUBMISSIONS RECEIVED Table 19: Stakeholders that provided a submission to ACFA Organisation Advantaged Care Aged Care Aged Care Industry Association Aged Care Services Australia (ACSA) Alzheimer’s Australia Association of Age Service Professionals Australian Projections P/L
identification of providers at risk of getting into financial difficulty, allowing it to provide support and advice. The significance of this for risk rating is that there is more evidence and analysis available than the number of actual defaults would suggest. In addition, whilst understanding risk factors is ‘core business’ for insurers and regulators, they would need to potentially draw on the Department’s work to date, mandatory financial and prudential reporting by providers and industry analysis, to undertake risk rating. This is currently an integral part of the Prudential team’s accountability. Risk rating may present a around administrative costs. A levy that is the same per dollar of lump sum held by each provider may be easier and cheaper to administer than one that risk rates providers. Risk rating in theory should be more economically efficient, as it produces a price signal that reflects the riskiness of the provider being covered. It may be unclear whether the gains from the efficiency and equity of risk rating would be sufficient to offset the greater administrative cost and complexity. This greater complexity would include the necessity of establishing review and appeal mechanisms that allowed a provider’s risk rating to be reconsidered. Detailed consultation with aged care providers and the Department would be essential in the event that the government decides to implement a scheme that includes risk rating. APPENDIX 3: LIST OF SUBMISSIONS RECEIVED Table 19: Stakeholders that provided a submission to ACFA Organisation Advantaged Care Aged Care Aged Care Industry Association Aged Care Services Australia (ACSA) Alzheimer’s Australia Association of Age Service Professionals Australian Projections P/L
the_protection_of_residential_aged_care_accommodation_lump_sum_accommodation_payments.docx