Aged care funding for nursing homes cut by $1.2bn in federal budget

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Aged care funding for nursing homes will be cut by $1.2bn over four years in response to higher than expected growth in expenditure and Medicare benefits will remain frozen for a further two years.

The budget papers report the “savings” will come from changes to the aged care funding instrument which determines the level of funding paid to aged care providers.

Health officials said funding to aged care providers was provided in three streams: behavioural assistance, physical assistance and complex care needs. Officials said the complex care category funding had grown disproportionately to the other two and so needed to be reassessed. Funding was $3.8bn higher than expected.

The government will spend a further $10m on surprise compliance visits to aged care homes until June 2017.

Medicare benefits for GPs, specialists and other health practitioners will remain frozen for two years, saving the government $925m until 2018-19.

A further $66m will be cut over four years using “enhanced data analytics” to crack down on “fraud, abuse, waste and errors” in Medicare. The Coalition also plans to save money by improving debt recovery rates.