AN-ACC is the acronym for the Australian National Aged Care Classification. This is the system used by the Australian government to determine the amount of funding that a residential aged care facility receives for each person in its care.

In simple terms, AN-ACC is a "casemix classification" model. A casemix model works by grouping residents with similar needs and care requirements into different classes. The government then provides a different subsidy rate for each class. A resident with very high-level needs, such as advanced dementia or complex health issues, will be placed in a higher-funded class than a resident who is more independent.

This funding model was introduced to replace the previous system, the Aged Care Funding Instrument (ACFI). The AN-ACC model is designed to distribute government subsidies in a way that is more equitable, accurate, and objective. It directly links funding to the specific care needs of the residents in a facility, which in turn informs staffing requirements like the Care Minutes mandate.

The primary goal of AN-ACC is to make certain that the funding provided to an aged care home aligns with the collective needs of its residents, rather than being based on the paperwork submitted by the provider.

From ACFI to AN-ACC: Why the Change?

To understand AN-ACC, it is helpful to know about the system it replaced. The former model, the Aged Care Funding Instrument (ACFI), was used for many years. However, it faced significant criticism.

• Provider-led Assessment: Under ACFI, the aged care facility itself was responsible for assessing the resident and filling out the forms to claim funding. This created a potential conflict of interest, as providers could be motivated to complete the forms in a way that maximized their funding.
• Administrative Burden: The ACFI system was known for being extremely paperwork-intensive. Care staff, including Registered Nurses, had to spend a large amount of time completing and justifying ACFI claims. This was time that could have been spent providing direct care to residents.
• A "Catch-up" Model: ACFI often funded care after an event happened, such as a fall or a new health diagnosis. It was not as effective at funding ongoing, preventative, or stable care needs.

The 2021 Royal Commission into Aged Care Quality and Safety identified these issues as major problems. AN-ACC was developed as a direct response. The new system is intended to fix these problems by introducing two major changes:

• Independent Assessment: Assessments are no longer done by the aged care facility.
• Focus on Needs, Not Tasks: Funding is based on the resident's classified need rather than a checklist of specific tasks the provider performed.

The Three Parts of AN-ACC Funding

When the government pays a subsidy to an aged care home for a resident, that payment is made up of three distinct parts under the AN-ACC model.

The Fixed Component (Base Care Tariff - BCT)

This is a fixed, per-day payment that every facility receives for every resident. It covers the costs of services that are shared by everyone, regardless of their individual care needs. This includes "hotel" costs like food, laundry, cleaning, maintenance, and facility management. The BCT amount can vary based on the facility's location (e.g., regional, remote, or metropolitan) to account for different operating costs.

The Variable Component (AN-ACC Casemix Class)

This is the main part of the funding and is specific to each resident. After an assessment, each resident is assigned one of 13 AN-ACC classes (from Class 1 for a short-term respite resident to Class 13 for a resident with the highest needs). Each class has a different subsidy amount attached. This variable payment is what pays for the direct clinical and personal care staff required to meet the resident's needs.

The One-off Adjustment (Entry Payment)

This is a one-time payment made to a facility when a new resident moves in. It is intended to cover the costs associated with the transition, such as initial assessments, care planning, and settling the person into their new environment.

How the AN-ACC Assessment Works

The single biggest change introduced by AN-ACC is the assessment process.

Assessments are performed by an independent, external workforce of assessors. These assessors are managed by specific organizations contracted by the government, not by the aged care provider.

• The Assessment Tool: The assessor uses a specific AN-ACC Assessment Tool. This tool evaluates the resident across several domains, including their mobility, cognitive function, communication abilities, and technical care needs (like wound care or tube feeding).
• The Outcome: Based on the results of this independent assessment, the resident is assigned to one of the 13 AN-ACC classes. The provider is then notified of the classification and receives funding based on that class.
• Reassessment: A resident's classification is not permanent. If a resident has a significant and permanent change in their condition (either a major decline or an unexpected improvement), the provider can request a reassessment to determine if a different classification is more appropriate.

The Impact of AN-ACC on Aged Care

The shift to AN-ACC has had a large effect on the entire aged care sector.

• For Residents and Families: The system is designed to be more fair. Funding is now tied to an objective assessment of need. This means a provider is funded to a level that allows them to meet the required Care Minutes for that resident. It also means care staff are free from the assessment paperwork, giving them more time for hands-on care.
• For Aged Care Providers: Providers no longer control the funding assessment process. Their focus must shift from managing funding claims to managing the delivery of care. The new model provides more predictable funding, as it is based on the resident's stable needs, but it also creates a direct link between their funding and their obligation to meet the Care Minutes targets that are calculated from it.