Marlowe Homes Pty Ltd and Secretary to the Department of Health and Ageing

[2004] AATA 440

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 440

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No   N2003/1544

GENERAL ADMINISTRATIVE DIVISION		)
Re		Marlowe Homes Pty Ltd

Applicant

And Secretary to the Department of Health and Ageing

Respondent

DECISION

Tribunal Mr RP Handley, Deputy President

Date5 May 2004

PlaceSydney

Decision The Tribunal affirms the decision under review.

..............................................

RP Handley       
  Deputy President 

CATCHWORDS

HEALTH AND COMMUNITY SERVICES – Aged care – renewal of classification for aged care recipient – reappraisal period – renewal forms not received by Department within time specified in the legislation – payment for care withheld from care provider – whether there is discretion in the legislation to lodge forms out of time – held there is no discretion in the Act permitting an extension of time in respect of the lodgement of reappraisal forms and no discretion permitting a waiver of the time – decision of the Respondent affirmed.

Aged Care Act 1997 ss 26-1, 27-1, 27-3, 28-4(3), 28-5(1)(2)(3)(4), 28-3(1)(2)(3), 42-2, 85-5

Classification Principles 1997

Tabulam and Templer Homes for the Aged Inc and Secretary to the Department of Health and Family Services [2003] AATA 61

Re Fullarton Lutheran Homes Inc and Secretary, Department of Health and Aged Care [2001] AATA 673

REASONS FOR DECISION

5 May 2004	Mr RP Handley, Deputy President
Summary

1.      The Applicant, Marlowe Homes Pty Ltd (in respect of its aged care facility known as the St George Aged Care Centre), failed to lodge the information required under the Aged Care Act 1997 (“the Act”) to renew the classification of a care recipient within the period specified in the Act. As a consequence, a delegate of the Respondent, the Secretary to the Department of Health and Ageing, refused to pay the Applicant the amount of Commonwealth subsidy that an approved provider of a residential care centre would have received under the Act in respect of the care recipient. This is the decision to be reviewed by the Tribunal.

Background

2. The care recipient whose subsidy is at issue became a resident at the St George Aged Care Centre (“St George”) on 12 October 2001. At that time, the Applicant lodged an appraisal with the Respondent and received a classification for the care recipient based on his needs. This classification took effect from 12 October 2001 and, in accordance with s 27-1 of the Act, was to expire 12 months after that date.

3. On 4 July 2002, the care recipient was admitted to hospital for a period which constituted “extended hospital leave” pursuant to s 27-3 of the Act, being discharged on 20 August 2002 when he returned to St George. As a result of this extended hospital leave, the expiry date of the care recipient’s classification under the Act became the 20 August 2002.

4.      On 2 September 2002, the care recipient was readmitted to hospital for a period of further extended hospital leave.  On 4 September 2002, the Applicant lodged a claim form for the care recipient for the month of August 2002, stating the date of discharge of the care recipient as 20 August 2002 (T5).   On 1 October 2002, the Applicant lodged with the Respondent a reappraisal form, dated 27 September 2002, for the renewal of the care recipient’s classification (T7).  The care recipient was discharged from hospital and returned to St George on 4 October 2002.   As a result of this further extended hospital leave, the care recipient’s renewed classification expired on 4 October 2002.

5.      On 17 October 2002, the Applicant lodged with the Respondent a claim form dated 11 October 2002, for the payment of subsidy in respect of the care recipient for the month of September 2002 (T8).  The form stated that the care recipient had been admitted to hospital on 2 September 2002, but did not specify his return date to St George. 

6.      On 14 November 2002, the Applicant lodged with the Respondent a claim form, dated 8 November 2002, claiming the payment of subsidy for the care recipient for the month of October 2002 (T10).  The claim form did not state that the care recipient had returned from extended hospital leave on 4 October 2002.

7.      On 3 December 2002, the reappraisal period, being a period of two months from 4 October 2002 (when the care recipient’s renewed classification expired) during which the Applicant was required to lodge the reappraisal form for the care recipient, expired.  The Applicant did not file a reappraisal form within this period.

8.      On 16 January 2003, the Applicant lodged a further reappraisal form, dated 13 January 2003, seeking a renewal of the classification for the care recipient (T16).   The care recipient’s classification took effect from 16 January 2003.

9. In a letter to the Respondent dated 16 January 2003, the Applicant requested, first, that the appraisal form of 27 September 2002 be accepted as covering both periods of the care recipient’s extended hospital leave and also in respect of the annual review, and, second, the payment of benefits with effect from 20 August 2002 (T17). By letter dated 6 May 2003, the Respondent informed the Applicant that it was not satisfied that the reappraisal form received by the Respondent on 16 January 2003 was in time for the reappraisal period which ended on 4 December 2002 (T20). The letter informed the Applicant that there were no general discretionary powers in the Act to grant an exception to allow an extension of time. It also advised that as there was no classification for the period from 4 October 2002, being the expiry of the care recipient’s classification, until 15 January 2003, being the day before the reappraisal was received by the Respondent, the care recipient was classified at the lowest applicable classification level for that period and the basic subsidy payable in respect of a care recipient at that level was nil (T20).

10.     On 4 June 2003, the Applicant sought a review of this decision (T21) on the basis that the Director of Nursing at St George was under a misunderstanding that the form submitted on 27 September 2002 covered both the first and second periods of extended hospital leave.  As St George had provided care to the care recipient for the period 5 October 2002 to 16 January 2003, it considered it should be paid for that period.  Notwithstanding this submission, the decision was subsequently affirmed by a delegate of the Respondent on 1 September 2003 (T22). 

11.     On 29 September 2003, the Applicant lodged an application for a review of this decision with the Tribunal and an application for an extension of time for the lodging of this application which was subsequently granted on 13 November 2003.  After an exchange of documents by the parties, the parties asked the Tribunal to determine the matter on the papers without conducting a hearing.

Applicable Law and Policy

12. The Act, together with the Classification Principles 1997 (“the Classification Principles”) made by the Minister pursuant to s 96-1 of the Act, provide the legislative framework for determining, amongst other matters, Commonwealth funding for residential care facilities. Such funding is partly based on the “residential care” – the personal care or nursing care or both - that is provided by an approved provider to care recipients in a residential facility (s 41-3). An approved provider (s 7-1) will be paid a residential care subsidy in respect of a care recipient according to the care recipient’s classification level (s 25-2), based on the level of care needed by the care recipient (s 25-3).

13. An appraisal of the level of care needed by a care recipient is undertaken by the approved provider (s 25-3) in accordance with Classification Principles (s 25-3(3)). The appraisal is taken into account by the Respondent, together with any other matters specified in the Classification Principles (s 25-1(3)(c)), in determining a classification level for the care recipient (s 25-1(2)).

14. The level of classification of a care recipient is effective for a period of twelve months from the date the classification takes effect (s 27-1(2)(a)), although it may be changed during this period if the needs of a care recipient have “changed significantly” (s 28-2(5)). Renewal of a classification involves the care provider re-appraising the needs of the care recipient during the period beginning one month before the expiration of the classification (s 28-3(1)(a)), and the Secretary taking this into account, along with any other matters specified in the Classification Principles (s 28-1(3)). A renewal of a classification must specify the classification level for the care recipient (s 28-1(2)).

15.     Section 28-3 states:

(1)       The reappraisal period for the classification is:

(a)       the period:

(i) beginning one month before the expiry date of the classification; and

(ii)       ending one month after the expiry date; or

(b) such other period as is specified in the Classification Principles.

(2)       However, if the expiry date of the classification occurs:

(a)       while the care recipient is on leave from a residential care service; or

(b) within one month after the residential care service recommenced providing residential care to the care recipient after that leave ended;

the reappraisal period is:

(c) the period of one month beginning on the day on which the provision of residential care to the care recipient through the residential care service recommenced; or

(d) such other period as is specified in the Classification Principles.

16. Section 9.37 of the Classification Principles states:

Reappraisal period for classification if expiry date occurs in certain circumstances

(1)The reappraisal period mentioned in subsection (2) applies where the expiry date of a classification of a care recipient occurs:

(a)while the care recipient is on leave from a residential care service; or

(b)within 1 month after the residential care service recommenced providing residential care to the care recipient after that leave ended.

(2)The reappraisal period is the period of 2 months beginning on the day on which the provision of residential care to the care recipient through the residential service recommenced.

17. Section 28-5(1) of the Act provides that if the application for reappraisal of classification is given to the Secretary after the end of the reappraisal period, the renewal of the classification takes effect from the day the reappraisal is received by the Secretary. Subsections 28-5(2) to (4) state:

(2)However, if the Secretary is satisfied that the reappraisal was sent in sufficient time to be received by the Secretary, in the ordinary course of events, within that period, the renewal is taken to have had effect from the day the care recipient began being provided with the level of care in question.

(3) In considering whether a reappraisal received outside that period was sent in sufficient time, the Secretary may have regard to any information, relevant to that question, that the approved provider gives to the Secretary.

(4) The Secretary must notify the approved provider, in writing, if the Secretary is not satisfied that a reappraisal received outside that period was sent in sufficient time.

18. The Act provides for the reconsideration of a decision by the Secretary at the request of a person whose interests are affected by a reviewable decision (ss 85-1 and 85-5), and for an application to be made to the Tribunal for the review of a decision that has been reconsidered (s 85-8).

19. “Extended hospital leave” is defined in Schedule 1 of the Act as follows:

extended hospital leave, in relation to a care recipient provided with residential care, means leave taken by the care recipient under section 42-2, for a continuous period of 30 days or more, in order to attend a hospital for the purpose of receiving hospital treatment.

Discussion

20.     The facts summarised under the heading “Background” above are not in dispute.  There is no issue as to the delivery of appropriate care to the care recipient or as to the care recipient’s needs having changed.  The care recipient was assessed as continuing to need care at the category 2 level.  The Applicant submits that St George has been “penalised” by

an amount of $11,186.83 due to misunderstanding by a member of the nursing home’s staff on the requirement for the need for lodgement of an appraisal form following the resident’s second period of hospitalisation.

21.     The Applicant states:

An appraisal form was completed by nursing home staff on 27 September 2002.  This was one week prior to the resident return (sic) from hospital on 4 October 2002.

In the event that the appraisal form had been completed on or after 4 October 2002 then the matter before the Tribunal would not have occurred.

22.     The Applicant submitted that St George has provided appropriate care to the care recipient for the period 4 October 2002 to 16 January 2003 but has not been paid for this.   The Government has recognised the unfairness of this situation by subsequently amending the law.

23.     The Respondent submits:

…

22Section 28-5(1) provides that, if a reappraisal of a classification is given to the Secretary after the end of the reappraisal period, the renewal of the classification takes effect from the day the reappraisal is received by the Secretary.

23The discretion given to the Secretary by section 28-5(2) is limited. The Secretary must be satisfied that the reappraisal was sent in sufficient time to be received by the Secretary, in the ordinary course of events, within the appraisal period.

24The Respondent contends that the applicant made an administrative error as to the correct date that the appraisal form was required after Mr S’s second period of extended hospital leave.  This is clear from the applicant’s letter of 16 January 2003 to the Department (T17).

25None of the information provided to the Secretary by the applicant is capable of demonstrating that the reappraisal was sent in sufficient time within the meaning of section 28-5(2) (see section 28-5(3)).

26The appraisal was sent after the end of the reappraisal period.  In such circumstances, it is not possible for the decision-maker to be satisfied that the reappraisal was sent in sufficient time to be received, in the ordinary course of events, within the reappraisal period.

27The Applicant’s contention that the operation of section 28-5(2) is a penalty is not correct, as was stated in Tabulam and Templer Homes for the Aged Inc and Secretary to the Department of Health and Family Services [2003] AATA 61 (Tabulam) .  Member Shanahan said (at paragraph 10):

The applicant’s contention that the shortfall in payment … is a penalty is incorrect. The term penalty, by all dictionary definitions, involves a degree of punishment and this cannot be the case where the applicant has failed to comply with the legislative requirements because of an administrative error. As the Act and the Classification Principles 1996 [sic] are so clear in their language, it cannot be considered as unfair when an approved provider fails to comply with the requirements of the Act.

28There is no discretion to alter the date of the renewal of classification for Mr S to 4 October 2002, as sought by the applicant.  (See also Re Fullarton Lutheran Homes Inc. and Secretary, Department of Health and Aged Care [2001] AATA 673, where the appraisal form was sent and received one day late. That case considered section 26-2(2) of the Act, which is substantially similar to section 28-5(2), but deals with appraisals rather than reappraisals.)

24. The Respondent states that there have been no legislative amendments to s 28-5(2). However, amendments have been made to the Residential Care Subsidy Principles 1997 made under the Act and the Ministerial determination under s 44-3(2), with the effect that where an appraisal or reappraisal has not been received within the statutory timeframe, the basic subsidy is reduced rather that being nil. These changes only apply to a reappraisal period that ends on or after 1 October 2003 and do not have retrospective effect.

25. The Respondent noted that the Department receives 40,000 reappraisal forms annually and submits that compliance with the Act is the responsibility of the approved provider. The Residential Care Manual supplied to each approved provider clearly states what an approved provider must do when a care recipient takes extended hospital leave.

26.     In this case, the Respondent stated that it was not until 17 December 2002 that the Applicant informed the Department that the care recipient had returned to St George on 4 October 2002.  The Department noted the “default” on the payment statement sent to the Applicant on that day.

27. The issue for the Tribunal to determine is whether, in accordance with s 28-5(2) of the Act, the reappraisal form for the care recipient dated 13 January 2003 and received by the Respondent on 16 January 2003 was sent in sufficient time to be received by the Secretary, in the ordinary course of events, within the reappraisal period for the care recipient, being the period of two months commencing on 4 October 2002. The Tribunal finds that it was not.

28.     As the Tribunal has stated in Re Fullarton Lutheran Homes Inc and Secretary, Department of Health and Aged Care [2001] AATA 673, and Re Tabulam and Templer Homes for the Aged Inc and Secretary to the Department of Health and Family Services [2003] AATA 61, there is no relevant discretion in the Act permitting an extension of time in respect of the late lodgement of the reappraisal form or permitting a waiver of the time for lodgement.

29. As the Respondent stated in its submissions, it is clear that despite the closeness of the care recipient’s two periods of extended hospital leave (4 July 2002 to 20 August 2002 and 2 September 2002 to 4 October 2002), St George made an administrative error in failing to lodge a further reappraisal form within the two months period ending on 4 December 2002 as required by s 28-3(2) of the Act and s 9.37 of the Classification Principles. As a result, for the period 4 October 2002 to 15 January 2003, the subsidy payable in respect of the care recipient was nil. This was the correct decision in accordance with the Act and the decision under review must be affirmed.

I certify that the 29 preceding paragraphs are a true copy of the reasons for the decision herein of Mr RP Handley, Deputy President

Signed:         .....................................................................................
  Associate

Heard on the papers                                  22 April 2004
Date of Decision  5 May 2004
Representative for the Applicant               RJ O'Shea Management Pty Ltd
Representative for the Respondent        Phillips Fox Solicitors