Superior Care Group Pty Ltd and Chief Executive Officer, Australian Aged Care Quality Agency

[2015] AATA 529

Superior Care Group Pty Ltd and Chief Executive Officer, Australian Aged Care Quality Agency [2015] AATA 529 (9 July 2015)

Division	GENERAL DIVISION
File Number	2014/6245
Re	Superior Care Group Pty Ltd
APPLICANT
And	Chief Executive Officer, Australian Aged Care Quality Agency
RESPONDENT

Decision

Tribunal	The Hon Justice J A Logan RFD, Deputy President Deputy President P E Hack SC
Date	9 July 2015
Date of written reasons	21 July 2015
Place	Brisbane

The decision on reconsideration of 5 November 2014 is set aside and a decision substituted that the decision of 13 October 2014 be set aside and a decision substituted that Merrimac Park Private Care be re-accredited for a period of three years from 23 November 2014.

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The Hon Justice J A Logan RFD, Deputy President

CATCHWORDS

HEALTH & AGED CARE – re-accreditation of residential care service – compliance with Accreditation Standards – Quality of Care Principles – period of re-accreditation – whether three-year accreditation ought be granted – generally good performance history – demonstrated capacity to rectify failings promptly – met all expected outcomes during unannounced assessment – decision set aside and substituted.        

LEGISLATION

Aged Care Act 1997 (Cth) ss 42-1, 42-4, 54-1, 54-2, 96-1

Australian Aged Care Quality Agency Act 2013 (Cth) ss 12, 53

Quality Agency Principles 2013 (Cth) Chapter 2

Quality of Care Principles 2014 (Cth) s 11(1)

Quality of Care Principles 1997 (Cth)

CASES

British Medical Association v Commonwealth (1949) 79 CLR 201

Shi v Migration Agents Registration Authority (2008) 235 CLR 286; [2008] HCA 31

REASONS FOR DECISION

The Hon Justice J A Logan RFD, Deputy President
Deputy President P E Hack SC

21 July 2015

Introduction

1. Superior Care Group Pty Ltd operates a residential care service, Merrimac Park Private Care (Merrimac Park), at Merrimac in Queensland. Merrimac Park has been accredited in accordance with the legislative scheme explained below since November 2011. On 13 October 2014 a delegate of the Chief Executive Officer of the Australian Aged Care Quality Agency determined to re-accredit Merrimac Park for a further period of one year.

2. Superior Care was dissatisfied with that decision. It considered that Merrimac Park warranted re-accreditation for a period of three years. It sought reconsideration of the decision. On 5 November 2014 another delegate of the Chief Executive Officer decided to confirm the earlier decision to re-accredit Merrimac Park for one year. These proceedings, which seek a review of the decision on reconsideration, were then commenced.

3. On 9 July 2015, at the conclusion of the hearing, we made a decision setting aside the decision of 5 November 2014 and substituted a decision that Merrimac Park be re-accredited for a period of three years. Our reasons for making that decision follow.

   Legislative scheme

4. The Aged Care Act 1997 (Cth) creates a mechanism whereby the Commonwealth effectively controls the provision of residential care services by making subsidies and grants to the providers of residential care services. The mechanism adopted creates “a situation of economic, business or practical pressure which constrains a man to act in a way desired by the legislature”.[1] By virtue of s 42-1 of that Act, an approved provider is eligible for residential care subsidy where, relevantly, the residential care service meets its accreditation requirement. A residential care service meets that requirement “if there is in force an accreditation of the service by the CEO of the Quality Agency”.[2]

   [1]British Medical Association v Commonwealth (1949) 79 CLR 201 at 268 per Dixon J.

   [2]See s 42-4, Aged Care Act 1997 (Cth).

5. The “Quality Agency” is the Australian Aged Care Quality Agency (the Agency) established by s 7 of the Australian Aged Care Quality Agency Act 2013 (Cth). It consists of the Chief Executive Officer (CEO) and the staff. Its function is to assist the CEO in the performance of the CEO’s functions. Those functions, listed in s 12 of the Australian Aged Care Quality Agency Act, include, relevantly, the accreditation of residential care services in accordance with the Quality Agency Principles and the Accreditation Standards made under the Aged Care Act.[3]

   [3] See s 12, Australian Aged Care Quality Agency Act.

6. Chapter 4 of the Aged Care Act deals with the responsibilities of approved providers. Section 54-1(a), within that Chapter, includes the obligation,

   … to provide such care and services as are specified in the Quality of Care Principles in respect of aged care of the type in question …

   Section 54-2 provides:

   The Quality of Care Principles may set out Accreditation Standards. Accreditation Standards are standards for quality of care and quality of life for the provision of residential care.

   Since 1 July 2014 the Accreditation Standards have been set out in the Quality of Care Principles 2014 (Cth), made pursuant to s 96-1 of the Aged Care Act. Prior to that date they were set out in the Quality of Care Principles 1997 (Cth), also made pursuant to s 96-1 of the Aged Care Act. There are, so far as we are able to tell, no relevant differences between the two and we will refer to the Quality of Care Principles 2014 in what follows. The role of Accreditation Standards is explained in s 11(1) of the Quality of Care Principles in these terms:

   The Accreditation Standards are intended to provide a structured approach to the management of quality and represent clear statements of expected performance. They do not provide an instruction or recipe for satisfying expectations but, rather, opportunities to pursue quality in ways that best suit the characteristics of each individual residential care service and the needs of its residents. It is not expected that all residential care services should respond to a standard in the same way.

7. The Accreditation Standards deal with 44 matter indicators under four “matters”:

   ·Part 1 – Management systems, staffing and organisational development

   ·Part 2 – Health and personal care

   ·Part 3 – Care recipient lifestyle

   ·Part 4 – Physical environment and safe systems

   The accreditation standard for a matter comprises the Principle for a matter and the expected outcome for each matter indicator. Thus, and by way of example, within each matter the first matter indicator is “Continuous improvement” with the expected outcome being:

   The organisation actively pursues continuous improvement.

   A similar pattern is followed for the balance of the 44 matter indicators. Staff of the Agency, described as quality assessors, make assessments about the extent to which the various matter indicators are satisfied, either across the full range of 44 items in the case of audits or across a more limited range on the occasion of other site contact. That process is determined by the Quality Agency Principles 2013 (Cth), a legislative instrument made pursuant to s 53 of the Australian Aged Care Quality Agency Act.

8. Part 1 of Chapter 2 of the Quality Agency Principles deals with the accreditation of a commencing service, the re-accreditation of an accredited service and the re-accreditation of a previously accredited service. It is only necessary to deal with the decision-making processes involved with an application by an accredited service to the CEO of the Agency for re-accreditation. After receiving such an application the CEO is required by s 2.10 of the Quality Agency Principles to,

   (a)appoint an assessment team to conduct a site audit of the service (in this Division called the relevant service) to which the application relates; and

   (b)consult with the approved provider of the service about when the site audit will be conducted.

   Only a person registered as a quality assessor in accordance with Part 3 of Chapter 2 of the Quality Agency Principles may be appointed to conduct a site audit.

9. Detailed provision is made in the Quality Agency Principles for the manner in which a site audit is to be conducted, for the giving to the approved provider of a written report setting out the major findings of the site report and for the opportunity for the approved provider to make a written response to the assessment team’s major findings. Section 2.17 obliges the assessment team to prepare a written report about the site audit. The site audit report,

   (a)    must include an assessment of the approved provider’s performance, in relation to the service, against the Accreditation Standards; and

   (b)    may also include any other matters the assessment team considers relevant.

   The site audit report and the assessment team’s written report must be given to the CEO who is then obliged to decide within 28 days (or longer if agreed) to re-accredit the service or not to re-accredit the service. Section 2.18(3) sets out the matters to be considered in making that decision:

   (3)In making the decision, the CEO:

   (a) must take into account:

   (i)the site audit report for the service; and

   (ii) any response given to the CEO by the approved provider under subsection 2.16(2); and

   (iii) any relevant information given to the CEO, or to the assessment team that conducted the site audit, by a care recipient or former care recipient of the accredited service, or by a representative of a care recipient or former care recipient of the service; and

   (iv) any relevant information about the approved provider given to the CEO by the Secretary; and

   (v) whether the CEO is satisfied that the approved provider will undertake continuous improvement in relation to the service, measured against the Accreditation Standards, if the service is re-accredited; and

   (b) may take into account any other relevant matter.

10. If a decision is made to re-accredit, s 2.19 describes the further decision-making process in this way:

    (1) If the CEO of the Quality Agency decides to re-accredit the relevant service, the CEO must decide:

    (a) the further period for which the service is to be accredited; and

    (b) whether there are any areas in which improvements in relation to the service must be made to ensure that the Accreditation Standards are complied with; and

    (c) the arrangements for assessment contacts with the approved provider of the service.

11. Apart from a site audit there are two other types of contact that may occur between the Agency and an accredited service, an “assessment contact” (referred to in s 2.19(1)(c) above) and a “review audit”. When a decision is made about the period of re-accreditation the CEO must also decide the arrangements for assessment contacts with the approved provider. The nature of an assessment contact is described in s 2.30 of the Quality Agency Principles as:

    … any form of contact (other than a site audit or review audit) …

    The arrangements for an assessment contact may be varied by the CEO provided notice of the new arrangements is given to the approved provider. Additionally, s 2.33 of the Quality Agency Principles allows for unannounced assessment contacts in addition to those notified to the provider on accreditation or re-accreditation.

12. A review audit is similar in scope and process to a site audit. It may be undertaken in the variety of circumstances listed in s 2.35(1) of the Quality Agency Principles including where,

    (a)the CEO considers, on reasonable grounds, that the approved provider of the service may not be complying with the Accreditation Standards or the approved provider’s other responsibilities under the Aged Care Act in relation to the service

    Following a review audit the CEO must decide whether to revoke or not to revoke accreditation and, if a decision is made not to revoke, decide whether to vary the period of accreditation.

13. Finally, decisions refusing to re-accredit and decisions on the period of accreditation may be reconsidered on request,[4] and a decision on reconsideration may be reviewed in the Tribunal.[5]

    [4]           See s 2.67, Quality Agency Principles.

    [5]See s 2.70, Quality Agency Principles.

    The factual background

14. The factual background is not in issue. What follows is largely taken from the parties’ Statement of Agreed Facts.[6] Merrimac Park was first accredited, under an earlier but similar, legislative scheme, for a period of 12 months from 23 November 2011. It seems fair to say that Merrimac Park had considerable difficulty, at least initially, in meeting expected outcomes assessed on contact visits. There was an assessment contact in February 2012 when the three expected outcomes were each met but in May 2012 a further assessment contact demonstrated that Merrimac Park did not meet four expected outcomes of the six assessed. That led to a decision to undertake a review audit later that month where 16 of the 44 expected outcomes were not met. Despite that, a decision was made on 19 June 2012 not to revoke accreditation or vary the period of revocation.

    [6]           Exhibit 7.

15. There were numerous assessment contacts thereafter in July and August 2012 where expected outcomes were not met. In late August 2012 a re-accreditation audit was undertaken. It concluded that 8 of the 44 expected outcomes had not been met. The site audit report informed a decision, made on 27 September 2012, to re-accredit Merrimac Park only for a period of six months from 23 November 2012.

16. A review audit was undertaken in early November 2012. The review audit team concluded that two of the 44 expected outcomes – continuous improvement (Item 4.1) and living environment (Item 4.4) – had not been met but that all other expected outcomes had been met. On 28 November 2012 the relevant decision-maker under the earlier legislative scheme was satisfied that, notwithstanding the views of the audit team, Merrimac Park met all 44 expected outcomes.

17. Assessment contacts, including an unannounced contact, were undertaken in December 2012, January 2013 and February 2013 and all expected outcomes assessed were met on each occasion. A re-accreditation audit was undertaken in early 2013. The audit team concluded that one expected outcome item 2.7, medication management, had not been met but that otherwise Merrimac Park met expected outcomes. On 10 April 2013 a decision was made to re-accredit Merrimac Park for a period of six months. Reconsideration of that decision was sought by Superior Care on 17 April 2013. The decision was confirmed on 1 May 2013 with the decision-maker concluding that all 44 expected outcomes were then met.

18. A re-accreditation audit was conducted in late August 2013. The audit team concluded that four expected outcomes – item 2.4, clinical care; item 2.6, other health and related services; item 2.7, medication management and item 2.10, nutrition and hydration – had not been met. The balance, including, relevantly, item 2.13, behaviour management and item 4.4 living environment, were found to have been met.

19. On 8 October 2013 a decision was made to re-accredit Merrimac Park for a period of 12 months on the footing that actions taken following the re-accreditation audit allowed the decision-maker to decide that Merrimac Park then satisfied all 44 expected outcomes. On 22 October 2013 Superior Care sought reconsideration of the decision to accredit for 12 months. The decision was affirmed on 5 November 2013.

20. On 4 November 2013 an assessment contact was undertaken. It assessed three expected outcomes – item 1.8, information systems, item 2.13 behaviour management and item 4.4, living environment and recommended that the latter two had not been met. Mr Russell Egan, Superior Care’s chief executive officer, wrote to the Agency disputing the findings made at audit and pointing out that item 2.13, behaviour management and item 4.4, living environment, had been assessed as having been met during the re-accreditation audit in late August 2013. Mr Egan’s evidence was that the issues identified by the assessors predominantly related to one particularly disruptive resident.[7] Reference to the assessment contact report for that visit,[8] bears out Mr Egan’s evidence.

    [7]           Exhibit 3, paragraph [12(b)].

    [8]           Exhibit 2, pages 817 – 831.

21. The position was similar on the next assessment contact on 18 December 2013 when Merrimac Park was again assessed as not meeting expected outcomes 2.13 and 4.4 although meeting three other expected outcomes assessed on that visit.

22. From that point on, Merrimac Park has had an unblemished record. In February 2014 it was assessed as meeting all five expected outcomes assessed, including 2.13, behaviour management and 4.4, living environment. There was an unannounced assessment contact in April 2014 when the three expected outcomes assessed were all met. In early September 2014 a re-accreditation audit was conducted. It found Merrimac Park to meet all 44 expected outcomes. As a result, on 13 October 2014, a decision was made to re-accredit Merrimac Park but only for a period of one year from 23 November 2014. Superior Care requested reconsideration of the length of re-accreditation decision on 24 October 2014. The decision was confirmed on 5 November 2014. That decision is the subject matter of this application, lodged on 2 December 2014.

23. On 14 April 2015 an unannounced assessment contact was conducted. It was determined that Merrimac Park met the two expected outcomes assessed at that visit.

    The agency’s policy

24. Whilst s 2.8 of the Quality Agency Principles require that a commencing service, that is, one accredited for the first time, if accredited, must be accredited for a period of one year, there is no similar limitation on the period of any subsequent re-accreditation. The Agency, and its predecessor, appears to have had a policy for some time that three years was the maximum period for re-accreditation. It is not clear whether that policy was recorded in writing earlier, however, on 14 August 2014 the Agency adopted a written policy for making decisions about accreditation. It is apparent from that document (if it had not been clear earlier) that the Agency has adopted a policy that three years is the maximum period of re-accreditation. Superior Care does not put in issue the lawfulness of making such a choice. It is not self-evidently unlawful. Therefore, we need not consider that aspect of the matter.

25. One of the curiosities of the case is that neither the original decision-maker of 13 October 2014, the Agency’s Assessment Manager, nor the decision-maker on reconsideration, the Agency’s General Manager, Accreditation, made reference to the policy document in their decision nor is there any evidence it was otherwise taken into account. It does rather seem that neither decision-maker was aware of the policy document.

26. That curiosity aside, the essence of the policy appears in Section 2, described as “Considerations and Principles”. The following appears,

    2POLICY – CONSIDERATIONS AND PRINCIPLES

    2.1   Decisions about accreditation and about the timing of the next quality review take into account the extent of any failure to meet the Standards and whether it compromises the health, safety and wellbeing of residents.

    2.2   In general, homes with any expected outcomes found not met will be awarded shorter periods of accreditation and homes will not be accredited if there are any findings of serious risk to the health, safety or wellbeing of residents or less than 30 out of 44 expected outcomes being met.

    2.3   Our policy regarding whether or not a home should be re-accredited and the period of accreditation is primarily focused on the home’s performance against the Accreditation Standards. However, a range of other considerations may, on a case by case basis, instruct as to the weight that should be placed on current and past performance against the standards in order to determine the preferred decisions about accreditation, the period of accreditation and related matters.

    General Principles

    2.4   The following principles underpin application of our policy about decisions:

    ·   A decision about the accreditation of a home or the next quality review is based on the particular relevant circumstances.

    ·   The current performance and past performance against the Standards serve as the primary indicators for determining:

    oWhether or not the home should be re-accredited and, if so, the accreditation period;

    oWhether or not a home’s accreditation should be revoked;

    oFor a home care service, when the next quality review is to be conducted.

    However, additional considerations, where relevant, are taken into account in making decision which may include the history of the provider or key personnel.

    ·   A decision about the re-accreditation of a home or a quality review of a home care service is within the context of the broad model that includes ongoing monitoring of performance against the Standards, the scope to conduct a review audit of a home or quality review of a home care service if warranted, and respective roles to manage accreditation (us) and to take compliance action (the department).

    ·   In determining the accreditation period of a home (including after a review audit), or the next quality review date for a home care service, the decision is based on the prospect that the service will meet and continue to meet Standards.

    ·   The period of accreditation or the period to the next quality review reflects a judgement about when the home or home care service should again be fully assessed for its performance against the standards.

    ·   A home that is unsafe, represents a serious risk to or severely compromises the safety, health or wellbeing of residents cannot be re-accredited or remain accredited.

    Section 3 seeks to apply the policy to accreditation of residential aged care homes. It does so in two ways. First, there is a series of paragraphs that set out the likely features of homes that would warrant three, two and one-year accreditation or refusal of accreditation. The text regarding the period of accreditation is in these terms:

    Three years’ accreditation

    3.4   The home would be likely to:

    ·   demonstrate that it meets all or almost all 44 expected outcomes; and/or

    ·   not have any failure to meet the standards that compromises the health, safety or wellbeing of residents; and

    ·   satisfy us that it will rectify any identified failure to meet the Accreditation Standards in a short timeframe; and

    ·   not be in breach of any other significant obligations under the Aged Care Act 1997 notified to us by the Department of Social Services; and

    ·   satisfy us that it is undertaking continuous improvement.

    Around two years’ accreditation

    3.3   The home would be likely to:

    ·   demonstrate that it meets all or almost all of the 44 expected outcomes; and/or

    ·   not have any failure to meet the standards that compromises the safety, health or wellbeing of resident; and

    ·   satisfy us that it will rectify any identified failure to meet the Standards within an acceptable timeframe; and

    ·   not be in breach of any other significant obligations under the Aged Care Act 1997 notified to us by the department; and

    ·   satisfy us that it is undertaking continuous improvement and is capable of monitoring and improving its performance against the standards for a long period.

    Around one year accreditation

    3.4   The home would be likely to:

    ·   not meet a number of related expected outcomes across the standards; and

    ·   satisfy us that it will rectify the failure to meet the standards in an acceptable timeframe; and

    ·   present no serious risk to the safety, health or wellbeing of residents; and

    ·   satisfy us that it has the capability to, and will, undertake continuous improvement.

    Refuse accreditation

    3.5   The home may:

    ·   have met less than 30 out of 44 expected outcomes; and/or

    ·   present a serious risk to the safety, safety and wellbeing of residents; and/or

    ·   not satisfy us that it will undertake continuous improvement; and/or

    ·   have a history of meeting less than 41 expected outcomes; and/or

    ·   be in an unsafe building; and/or

    ·   be in breach of any other significant obligations under the Aged Care Act 1997 notified to us by the department.

1. The text then refers to “indicators for re-accreditation” that are set out in Table 1 of the document and are used, so it is said, for re-accreditation decisions following a site audit. The text then continues:

   3.11   Decisions indicated in these tables represent the starting point for determining the correct decision. In making decisions about re-accreditation, authorised decision-makers are to use these indicators and also consider whether there are additional considerations that should be given weight in determining if a decision different to that indicated in Tables 1 or 2 should be made.

   Table 1 is reproduced below.

   Consideration

2. It was not suggested that we ought ignore the Agency’s policy or that, for some reason, we ought afford it little weight. Mr Bickford, counsel for the Agency, stressed the reference in clause 2.4 to the role of “past performance” as one of the two primary indicators for determining the accreditation period. Mr Bickford accepted that, consistently with the decision in Shi v Migration Agents Registration Authority,[9] it was open to us to have regard to the result of the April 2015 assessment contact in coming to our conclusion on the period of re-accreditation. Mr Crawford, counsel for Superior Care, stressed that Merrimac Park had an excellent history after its initial teething problems other than during a confined period at the end of 2013. He stressed the primacy given to the site audit report by s 2.18 of the Quality Agency Principles when the re-accreditation decision was being made. That may be true of the decision on whether to re-accredit; we are not persuaded that the review audit report should be afforded the same primacy when decisions about the length of re-accreditation are required to be made.

   [9] (2008) 235 CLR 286; [2008] HCA 31.

3. In our view, at the conclusion of the hearing it was plain that the preferable decision was one re-accrediting Merrimac Park for a period of three years. Reference to the Agency’s policy document virtually dictates that conclusion, but, and, in the circumstances of this case, does so without a need to explore whether Table 1 is completely congruent with other parts of the policy. Further, even independently of the policy, we would come to the same conclusion.

4. It is undoubtedly the case that Merrimac Park has met every expected outcome assessed, including at a re-accreditation audit, since February 2014, a period now well in excess of 12 months. From November 2012 to November 2013 it generally met all expected outcomes assessed. There was a brief interlude, in November and December 2013, where it did not meet two expected outcomes, behaviour management and living environment; but Mr Egan’s evidence, together with the fact that those matter indicators were met before and after that time, suggest that to be an aberration rather than a symptom of underlying concern.

5. It seems to us to be particularly significant that Merrimac Park met all expected outcomes assessed during the unannounced assessment contact in April 2015. An unannounced visit, where certain expected outcomes, also not announced in advance, are particularly examined in circumstances where the inspection team is free to pursue other lines of inquiry if onsite indications so suggest themselves, is, we rather think, more likely to reveal, or at least confirm, a true picture than an expected visit.

6. That history satisfies us that Merrimac Park falls to be considered as one meeting the criteria in paragraph 3.2 of the policy. It met all 44 expected outcomes at audit and it has had a generally good performance history since November 2012. Moreover, where it has, in the recent past, fallen below the required standard it demonstrated the capacity to rectify any failings promptly.

7. We would add only that we did not find it necessary, in coming to these conclusions, to consider Mr Egan’s evidence of economic disadvantage nor the evidence of an analysis of the Agency’s accreditation decisions relating to other providers in Queensland. We need not decide whether such evidence is relevant; that argument may be left for another day.

I certify that the preceding 33 (thirty-three) paragraphs are a true copy of the reasons for the decision herein of The Hon Justice J A Logan RFD, Deputy President and Deputy President  P E Hack SC

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Associate

Dated 21 July 2015

Date of hearing	9 July 2015
Counsel for the Applicant	Mr CJ Crawford
Solicitors for the Applicant	McCullough Robertson
Counsel for the Respondent	Mr PG Bickford
Solicitors for the Respondent	Clayton Utz