Negotiations on Aged Residential Care funding between the Joint ARC Steering Committee and Te Whatu Ora Health New Zealand concluded at the end of July. Te Whatu Ora was unwilling to increase its previous uplift offer of 3.2% citing the constrained fiscal envelope. However, they have undertaken to work with the Joint Steering Committee on cost saving amendments to the ARRC Agreement.  

Some amendments to the ARRC Agreement have already been agreed and come into effect with the changes to the maximum contribution on 1 September 2024. The agreed amendments:

1. increase the timeframes for residents ceasing to receive premium room services, particularly soon after admission. This will give providers more certainty of income from premium rooms;
2. remove the requirement to offer a premium room at standard rates if occupancy is less than 90%. This allows providers to make their own decisions on how to respond to periods of reduced demand and reduces the pressure on new or small facilities which are more likely to fall below the 90% occupancy;
3. allow providers to pass on the costs of private specialised allied health services to the resident if the service is not available through the public system in a timely manner and the resident agrees. This enables ARC residents to choose referral to private specialists and will reduce both the cost burden for ARC providers and the stress on the public health system;
4. clarifies that the expectation is that family or friends will accompany residents to appointments except in exceptional circumstances. This makes it clear that staff accompanying residents at the provider's cost is a last resort;
5. require providers to report current vacancies each working day through the Eldernet Vacancy Status Reporting System. This will increase administration for ARC providers but will help prospective residents make more targeted inquiries. ARC providers will also be required to use the Eldernet Communication Software System;
6. allows providers to agree a different timeframe for refunding care fees when a resident has died or transferred to another facility, increasing flexibility.  

The amendments allow for greater certainty of revenues but only if they are reflected in your Admission Agreement and some of the changes will only be applicable for new residents. Now is an excellent time to review and update your Admission Agreement to ensure you get the benefit of the amendments and that your terms are compliant.

If you would like assistance with updating your Admission Agreement, reach out to our Retirement Villages and Aged Care specialists. We are happy to help.

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