AN-ACC Optimisation: A Practical Guide to Aged Care Funding Maximisation

The Australian National Aged Care Classification (AN-ACC) represents a fundamental shift in aged care funding. Since October 2022, residential aged care funding has been determined by resident classification rather than care needs assessment alone. For providers, this creates both opportunity and risk: opportunity to capture funding that reflects actual care delivery, and risk of under-classification that erodes margins.

This guide provides practical strategies for AN-ACC optimisation within compliant boundaries.

Understanding the AN-ACC Model

AN-ACC classifies residents into one of 13 classes based on three assessment domains: Independent Living Skills and Activities of Daily Living (function), Cognition and Behaviour, and Health and Medical Conditions.

Within each class, funding varies based on geographic location and, for some components, individual characteristics. The model also includes a base care tariff applying to all residents and an adjustment for residents with complex health conditions.

Understanding how classification translates to funding is essential for optimisation. The difference between adjacent classes can exceed $30 per resident per day, making classification accuracy a significant financial lever.

Classification Accuracy Fundamentals

Classification accuracy ensures residents are assessed and coded to reflect their actual care needs. This is not about gaming the system but rather ensuring the assessment captures the reality of each resident's condition.

Common under-classification causes include incomplete documentation of conditions and limitations, assessor unfamiliarity with assessment instruments, time pressure during assessments, and failure to update classifications when conditions change.

Addressing these causes improves classification accuracy and, consequently, funding appropriateness.

Documentation for Optimal Classification

Documentation quality directly affects classification outcomes. Assessors rely on clinical documentation to understand resident conditions and assign appropriate classifications.

Effective documentation includes comprehensive admission assessments that capture all relevant conditions, ongoing progress notes that reflect current function and needs, specific descriptions of assistance required rather than general statements, documentation of behavioural incidents and interventions, medical records that support health condition assessments, and allied health assessments documenting functional limitations.

Documentation improvement initiatives often deliver significant classification and funding improvements. Common improvement strategies include training clinical staff on documentation requirements for AN-ACC, implementing documentation audits with feedback, providing documentation templates that capture required information, and reviewing documentation before assessment visits.

Assessment Preparation

AN-ACC assessments are conducted by external assessors who spend limited time with each resident. Preparation maximises the accuracy of these assessments.

Pre-assessment activities include ensuring documentation is current and complete, briefing staff who will interact with assessors, reviewing residents who may have changed since last assessment, and preparing any supporting evidence for complex conditions.

During assessment, ensure assessors have access to relevant staff for questions, documentation is readily available, and any resident behaviours or needs are observable or clearly documented.

Post-assessment, review preliminary results and prepare appeals for any classifications that appear incorrect.

Reclassification Management

Resident conditions change over time. Significant changes that affect classification should trigger reclassification requests.

Triggers for reclassification include significant decline in function, new diagnoses affecting health condition scoring, onset or worsening of cognitive or behavioural issues, and changes in care requirements.

Implement processes to identify classification-relevant changes through regular review of care needs, clinical handover processes that flag changes, and integration between clinical systems and classification monitoring.

Timely reclassification captures appropriate funding for changed needs. Delays in reclassification mean providing higher-intensity care at lower-classification funding.

Case-Mix Analysis

Case-mix analysis examines your resident population's classification distribution compared to benchmarks. This analysis reveals whether your population is systematically under-classified relative to actual care intensity.

Case-mix indicators include average classification compared to sector benchmarks, distribution across classes compared to similar facilities, relationship between care delivery costs and classification funding, and trending of classifications over time.

Significant under-classification relative to benchmarks warrants investigation. Potential causes include documentation deficiencies, assessment preparation gaps, or failure to reclassify when conditions change.

Accommodation Revenue Optimisation

While not part of AN-ACC, accommodation revenue represents a significant funding stream for residential aged care. Optimisation opportunities exist in this area as well.

RAD versus DAP strategy involves residents choosing between Refundable Accommodation Deposit (lump sum) and Daily Accommodation Payment (daily charge). Provider preferences depend on cash requirements, interest rates, and investment returns. Strategic approaches to presenting options can influence the mix.

Maximum Permissible Price (MPP) for non-supported residents allows market-based pricing up to published maximums. Pricing strategy should consider market conditions, facility quality and competitive positioning.

Supported resident accommodation is set by government rates. Ensure correct classification of resident support status to receive appropriate payments.

Additional Services Revenue

Beyond care and accommodation, additional services offer revenue enhancement opportunities.

Additional service categories include higher specification accommodation options, optional lifestyle and amenity services, personal services beyond basic care, and specified care and services packages.

Additional services must be genuinely optional, properly disclosed and appropriately priced. Well-designed additional service offerings can improve resident experience while generating margin.

Compliance Considerations

AN-ACC optimisation must operate within regulatory requirements. Key compliance considerations include documentation must accurately reflect resident conditions, classifications must be supportable by evidence, reclassification requests must reflect genuine changes, and additional services must meet regulatory requirements.

The goal is capturing appropriate funding for actual care needs, not inflating classifications or claiming for fictitious conditions. Compliance failures carry serious consequences including funding recovery and regulatory sanctions.

Technology for AN-ACC Optimisation

Technology can support AN-ACC optimisation through documentation systems that capture classification-relevant information, analytics that identify potential under-classification, alerts for residents who may need reclassification, reporting on case-mix and funding performance, and integration between clinical and financial systems.

Many clinical systems now include AN-ACC-specific functionality. Evaluate whether your systems effectively support classification accuracy.

Building AN-ACC Capability

Sustained AN-ACC performance requires organisational capability.

Clinical staff training ensures those documenting care understand how documentation affects classification. This includes registered nurses, care staff and allied health professionals.

Classification expertise develops in-house understanding of AN-ACC instruments and classification logic. This might involve dedicated classification staff or distributed expertise among clinical leaders.

Performance monitoring tracks classification distributions, funding outcomes and related metrics. Regular review identifies issues and improvement opportunities.

Continuous improvement treats AN-ACC optimisation as an ongoing focus. Regular analysis, staff training updates and process refinement drive sustained results.

Conclusion

AN-ACC optimisation is essential for aged care financial sustainability. The funding model rewards providers who understand classification mechanics, maintain quality documentation, prepare for assessments effectively and manage reclassification proactively.

Within compliant boundaries, significant funding variation exists between providers with similar resident populations. The difference often comes down to operational excellence in classification-related processes.

For guidance on AN-ACC optimisation in your organisation, CFO Insights provides fractional CFO services with deep expertise in aged care funding and financial management.