Tabulam and Templer Homes for the Aged Inc and Secretary to the D epartment of Health and Family Services [2003] AATA 61 (22 January 2003)

Last Updated: 28 January 2003

DECISION AND REASONS FOR DECISION [2003] AATA 61

ADMINISTRATIVE APPEALS TRIBUNAL Nº V2002/540

GENERAL ADMINISTRATIVE DIVISION

Re: TABULAM AND TEMPLER HOMES

FOR THE AGED INC

Applicant

And: SECRETARY TO THE

DEPARTMENT OF HEALTH AND

FAMILY SERVICES

Respondent

DECISION

Tribunal: Miss E.A. Shanahan, Member

Date: 22 January 2003

Place: Melbourne

Decision: The Tribunal affirms the decision under review.

(sgd) E.A. Shanahan

Member

HEALTH AND COMMUNITY SERVICES - aged care - residential aged care service - failure to provide appraisal certificate within time - reduction in rate of subsidy payable - discretion to extend time in relation to reappraisals - is the shortfall in the applicant's budget a penalty and is the Aged Care Act 1997 unfair?

Aged Care Act 1997 Part 2.4 - ss.25-1(1), 25-1(2), 25-1(3), 27-1(1), 27-1(2), 28-1(1),

28-1(2), 28-4(1), 85-5

Classification Principles 1996

Re Fullarton Lutheran Homes Inc. and Secretary, Department of Health and Aged Care

[2001] AATA 673

REASONS FOR DECISION

22 January 2003 Miss E.A. Shanahan, Member

1. This is an application for review of a decision dated 4 December 2001 wherein a delegate of the Secretary to the Department of Health and Aged Care (the respondent) determined that a request to backdate the date of effective approval of a Resident Classification Scale received six months out of time was denied in accordance with the legislative requirements. A reconsideration of this decision under s.85-5 of the Aged Care Act 1997 (the Act) affirmed the primary decision and notified the applicant of this decision on 14 May 2002.

2. By agreement, the parties requested that the Tribunal determine the application on the papers.

3. The material before the Tribunal comprised the documents lodged pursuant to s.37 of the Administrative Appeals Tribunal Act 1975 (T1-T11); a statement of facts and contentions and an outline of the evidence of all witnesses on behalf of the applicant. A statement of facts and contentions and the applicant's monthly payment statements were lodged by the respondent.

BACKGROUND TO THE APPLICATION

4. The applicant is a not-for-profit approved provider of aged care services. These services are residential in nature. In September 2000, one of the applicant's clients/patients Mrs S was assessed for high level care and was reclassified from S5 to S3. She remained at an S3 classification until the end of February 2001. As required by the Act, the classification was reviewed on 19 February 2001 and the review team confirmed the classification at S3. The applicant was required to notify the Department of Health and Aged Care (the Department) of the classification by 20 March 2001 in accordance with the six-month timeframe for reappraisal as outlined in s.28 of the Act.

5. As a result of an administrative oversight by an employee of the applicant, the notice of reappraisal was not forwarded to the Department until 5 November 2001, the reappraisal period having ceased on 20 April 2001. In the interim the client/patient's categorisation had been reduced to an S4 level for March and April 2001 in accordance with the Act. After 20 April 2001, there being no advised classification of the care recipient, the classification was reduced to level 8.

6. Once the respondent was advised on 5 November 2001 of the reappraisal decision, a renewal of the classification of the patient at S2 level took effect.

7. The applicant's failure to notify the Department of the reappraisal had resulted in the payment of a sum of money, less the sum of $20,114 that would have been received had the appraisal notice been filed on time.

8. The applicant freely admitted that the fault lay with its administrative staff who were inexperienced. The applicant argued that the loss of income resulting from the administrative error on its part amounted to a penalty and that, as the applicant was a not-for-profit organisation, the loss of income would necessitate a reduction in other staff or resident entitlements. The applicant sought review of the decision and reinstatement of Mrs S's classification as S2 or S3 from 20 April 2001. The applicant advised that its administrative error had occurred at a time when its longstanding Director of Nursing had resigned and its administrative assistant, responsible for checking the claim forms for Commonwealth subsidies, had retired after 20 years of service. The applicant also advised that, despite the non-payment for Mrs S during this period, it had provided the necessary care and services for a resident classified as S3. The applicant further claimed that the provision of monthly transaction reports, which appear to have commenced in February 2001, was indicative of "a gap in the system of the Department".. The applicant seeks review of the decision and the refunding of payments at a S4 level from May 2001 to October 2001.

RELEVANT LEGISLATION

9. The Act is written in exemplary plain English. The ongoing certification requirements are clearly stated in Part 2.4 of the Act and, in particular, s.28. The Tribunal has concluded that the applicant is an experienced approved provider in the aged care residential services, given that its administrative officer (recently retired) had 20 years experience dealing with the Department. The reappraisal requirements are clearly enunciated. The applicant admits that the error was totally on its part. Section 28-2(5) of the Act provides for a limited discretion to extend time. While this period is not defined in the Act, the reappraisal request in this case was dated 5 November 2001, some six months after the due date for reappraisal on 20 April 2001. Section 28-5(3) of the Act states that:

...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 providers gives to the Secretary.

The application to the Secretary is six months out of date and this is not considered to be sufficient time. The Tribunal relies on the decision of Re Fullarton Lutheran Homes Inc. and Secretary, Department of Health and Aged Care [2001] AATA 673 (Senior Member Purcell) wherein appraisal was sent one day after the two-month period had expired. Senior Member Purcell affirmed the decision under review and found that there was no discretion to be exercised.

10. The applicant's contention that the shortfall in payment of $20,114 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 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. The Tribunal acknowledges that the applicant has no recourse to other forms of compensation for its loss of income and that this decision may result in a compromise of resident care and staff levels. However, the reduced funding is purely the result of the applicant's administrative error.

11. The Tribunal affirms the decision under review.

I certify that the eleven [11] preceding paragraphs are a true copy of the reasons for the decision herein of

Miss E.A. Shanahan, Member

(sgd) Catherine Thomas

Clerk

Date of Hearing Nil -- Decided on Papers

Date of Decision 22 January 2003