Consumer peak body Alzheimer’s Australia is proposing the Federal Government introduce a cap on the administration fees providers can charge as part of the delivery of home care packages and for all admin charges to be published on My Aged Care.

The recommendation was in response to ongoing concerns about excessive charges and a lack of transparency around how costs have been calculated. The peak body said it had received reports of fees equivalent to up to 70 per cent of a consumer’s package.

However providers have said they would be “strongly opposed” to the idea of a cap, which goes against a market-based community aged care system.

As part of the home care reforms from February 2017, the Federal Government is proposing maximum exit fees be published on My Aged Care, but Alzheimer’s Australia has called for the transparency measures to go further to include the disclosure of all admin charges on the website.

“It is imperative that in regard to administration fees there is also adequate transparency and disclosure, including publication of the fees on My Aged Care and Alzheimer’s Australia also proposes that an absolute cap be in place in relation to the quantum of administration fees that can be charged by providers,” the peak body wrote in a submission to the draft delegated legislation for the home care changes.

The peak body said the higher costs for rural and remote providers should be dealt with in the government’s funding formula rather than through the deduction of higher fees which impact the funds available for care.

While the peak acknowledged that mandating a maximum fee may encourage service providers to charge that fee, it said this “would still be an improvement on the current situation.”

Chief executive of COTA Australia Ian Yates said it supported increased transparency and comparability of pricing for consumers and was pushing for a standardised set of comparable prices to be published on My Aged Care.

He said comparability of unit pricing would eliminate the need for a cap for admin charges in home care.

Mr Yates said he did not support the separation of charges into admin charges and other fees, which was confusing for consumers and did not enable easy comparison.

He pointed to the energy sector as an example of how price comparability of basic services could offer consumers greater transparency and support decision-making.

“It is our view that it is possible to get a comparable set of fairly commonly used services that has to be published on the My Aged Care website for comparison purposes.”

Leading Age Services Australia CEO Sean Rooney said it was “strongly opposed” to any proposal to cap administration fees.

“In a consumer driven system – which is what consumers have been lobbying for – capped pricing makes no sense; it actually goes against free market principles.

“The administration costs vary for providers based on all sorts of factors, including location, just as they do for any other service provider. Providers have every right to recoup these costs which contribute to their ability to deliver the service.”

The peak body for mission-based aged care providers Aged and Community Services Australia said it did not agree with the proposed requirement that exit fees charged when a consumer switched providers or left their package be advised to the department and published on My Aged Care.

“Exit fees should be a matter between the provider and the consumer while publishing of exit fees on the website should be a decision of the provider,” ACSA wrote in its submission to government.

It said all fees and charges should be market-based.

Providers are able to charge administration costs to cover items such as government quality and reporting requirements, organisational overheads, capital costs, developing statements and establishing contracts with subcontractors

Case management and advisory fees can be charged on top of admin charges and will vary depending on the level of involvement of the consumer and their carer.