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Australian National Aged Care Classification

The Australian National Aged Care Classification (AN-ACC) funding model for residential aged care services and residential respite aged care services replaced the previous funding tool, the Aged Care Funding Instrument (ACFI) on 1 October 2022.

This saw the introduction of activity based funding in the residential aged care sector. A key part of this residential aged care funding reform is the introduction of independent assessors, who use the AN-ACC assessment tool to evaluate a resident's functional, cognitive and physical capabilities, and assign them an AN-ACC class. The AN-ACC classes aim to group residents in a manner that is both relevant to care and resource homogenous.

The Independent Health and Aged Care Pricing Authority (IHACPA) provides independent advice to the Australian Government on the pricing of aged care services through the AN-ACC funding model, to ensure IHACPA’s pricing advice is directly informed by the costs of delivering care.

The Minister for Health and Aged Care remains responsible for determining the price for aged care services. 

In providing pricing advice, IHACPA aims to better understand the costs incurred by providers, changes in these costs over time, and the drivers of these costs at the resident level. A pilot costing study commenced in late 2021 and was completed in September 2022. This pilot study informed the methods for collecting activity and cost data for IHACPA's current Residential Aged Care Costing Study (RACCS).

In December 2022, the RACCS commenced to collect cost data from a broad range of residential aged care services. The collection of residential aged care cost data will support IHACPA in future AN-ACC classification refinement and pricing advice.

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