How to Improve Aged Care Funding: A Strategic Guide for CFOs

How to Improve Aged Care Funding: Strategies That Actually Work

Improving aged care funding is not about lobbying government for higher rates. It is about capturing every dollar your organisation is already entitled to. In our experience, the average aged care provider is leaving 8–15% of potential AN-ACC funding on the table through classification inaccuracies, documentation gaps, and missed adjustment payments. For a 120-bed facility, that translates to $800,000 to $2 million annually in recoverable revenue.

This guide covers the five strategic levers CFOs can pull to improve aged care funding — none of which require government policy changes.

Lever 1: Classification Accuracy and Reclassification Discipline

AN-ACC classification is the single most impactful determinant of your funding level. Every resident is assessed and placed into one of 13 classes. The difference between adjacent classes can be $20–$50 per day. Yet most providers have no systematic process for monitoring whether their residents are correctly classified.

Implement a classification accuracy review every 90 days. Compare each resident's documented care needs against their current AN-ACC class. When a resident's condition deteriorates — increased cognitive decline, new mobility restrictions, escalating behavioural needs — submit a reclassification request immediately. The providers who capture the most funding are those with clinical teams trained to recognise when a resident's needs have changed and administrative processes that convert that recognition into a funding claim within 14 days.

Lever 2: Clinical Documentation Quality

Funding assessors can only classify what is documented. If your clinical notes don't reflect the full extent of a resident's care needs, the assessor has no basis for a higher class allocation. This is not about gaming the system — it is about ensuring documentation accurately represents the care being delivered.

Invest in documentation training for registered nurses and care staff. Establish minimum documentation standards for Activities of Daily Living (ADL) assessments, behavioural observations, pain management, and clinical interventions. Audit a sample of clinical records monthly against documentation standards. Where gaps exist, provide targeted coaching. The return on this investment is typically 10–20 times the cost of the training program.

Lever 3: Adjustment Payment Capture

AN-ACC includes several adjustment payments that are frequently under-claimed. The top 10% supplement for residents with the highest assessed needs, oxygen supplement payments, and respite loading all represent additional revenue that many providers miss. Build a checklist for each adjustment type. Review every resident against these checklists quarterly. Assign accountability for adjustment claiming to a specific role — don't assume it will happen automatically.

Lever 4: Accommodation Payment Optimisation

The accommodation pricing strategy directly impacts total revenue. Providers who set their Maximum Permissible Interest Rate (MPIR) and room prices strategically — benchmarked against local competitors and facility quality — generate significantly more accommodation revenue. Review your room pricing annually. Ensure your facility's published accommodation prices reflect any capital improvements or refurbishments. Consider the mix of RADs versus DAPs and model the cash flow implications of each scenario.

Lever 5: Additional Services and Fee-for-Service Revenue

Government funding is not the only revenue stream in aged care. Additional services — whether packaged as a premium room offering or charged as individual extras — provide margin that is entirely within the provider's control. Assess your current additional services offering. Survey residents and families on willingness to pay for enhanced services. Model the revenue impact of introducing or expanding services such as premium dining, allied health, lifestyle programs, or technology-enabled care. Many providers underestimate the demand for quality additional services.

Building the Funding Improvement Roadmap

Improving aged care funding is not a one-off project. It requires a permanent operating rhythm — quarterly classification reviews, monthly documentation audits, annual pricing reviews, and continuous adjustment claiming. The CFO's role is to build this rhythm, assign accountability, track results, and report outcomes to the board.

Start with a funding diagnostic. Benchmark your current revenue per bed day against sector averages. Identify which of the five levers offers the highest recovery potential for your organisation. Prioritise accordingly and build a 90-day action plan. The revenue is there — it just needs a CFO who knows how to capture it.