Consultation to inform new aged care pricing framework

September 20, 2022

The Independent Health and Aged Care Pricing Authority (IHACPA), previously known as IHPA, is currently undertaking a consultation to inform the development of a new pricing framework for Australian aged care services.

The VHA is preparing a response on behalf of our members to ensure that the unique value and challenges faced by Public Sector Residential Aged Care Services (PSRACs) are considered and reflected in the final pricing framework and underlying principles.

The pricing framework in development presents a mechanism to transition aged care services to Activity Based Funding (ABF). It is designed to fund services in line with the cost of delivering care, and according to the number and type of patients they treat. It is proposed that transitioning aged care services to ABF will promote transparency, standardisation, and benchmarking of aged care services across different types of care.

The current consultation focuses on the application of the Australian National Aged Care Classification (AN-ACC) in the context of residential aged care and respite care. It will form part of IHACPA’s five-year vision for pricing framework that will extend to including home care, and potentially multi-purpose services (MPS) pending future consultation and research in these areas.

The VHA welcomes the opportunity to contribute to the IHACPA consultation. Central to our submission will be a call for the framework to:

  • consider the vital role PSRACS play in the Victorian system in providing access to services for older people with more complex care needs, as well as specialist aged persons’ mental health residential services
  • ensure that the residential care price reflects the actual cost of delivering care in rural and regional areas
  • factor in the ongoing costs to services that have come with responding to the COVID-19 pandemic, the mounting costs to services linked to inflation and workforce challenges
  • ensure that the wellbeing needs of older Victorians are ‘baked in’ to the framework and reflected in incentives.

We are eager to connect in with members to hear any feedback or concerns you might have about the pricing principles or the development of a residential care price.

If you would like to get in touch and share your feedback, please contact Joanna Hatcher (Policy and Advocacy Advisor) at or you can book in a time with Jo by calling 03 9094 7777.