FEDERAL COURT OF AUSTRALIA

Secretary, Department of Health (as successor to the Secretary, Department of Social Services) v DLW Health Services Pty Ltd [2016] FCAFC 108

ORDERS

THE COURT ORDERS THAT:

1.    The decision of the Administrative Appeals Tribunal given on 13 October 2015 is set aside.

2.    The matter is remitted to the Administrative Appeals Tribunal to decide again.

3.    The parties file and serve any written submissions as to the costs of the appeal within 7 days.

4.    The parties file and serve any written submissions in response within a further 7 days.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

THE COURT:

1    This is an appeal against a decision of the Administrative Appeals Tribunal (“the Tribunal”) given on 13 October 2015.

2    The respondent operates an aged care home, known as “Footscray Aged Care”, in Melbourne. On 17 December 2013, delegates of the applicant made decisions pursuant to s 29-1 of the Aged Care Act 1997 (Cth) (“the Act”) to change the classification levels for five residents of the aged care home. On 14 April 2014, another delegate confirmed the decisions. The consequence of the decisions was to reduce the amount of the residential care subsidy payable by the Commonwealth to the respondent in respect of the five residents.

3    The respondent lodged an application with the Tribunal for review of the reconsideration decision of the second delegate. The Tribunal’s decision expressly set aside the decisions of the first delegates, but should be construed as also having set aside the reconsideration decision. The Tribunal directed that the classification levels of the five residents be restored to those immediately preceding the decision dated 17 December 2013.

4    The appeal arises in the context of complex legislation and delegated legislation concerning the payment of government subsidies to approved aged care providers. It will be necessary to describe the legislative scheme in detail in order to give context to the Tribunal’s reasons and to the parties’ grounds.

The legislative scheme

The Aged Care Act

5    The Act provides for the payment of subsidies to aged care providers and the payment of grants for other matters connected with the provision of aged care.

6    It is unsurprising that the scheme is complex, as it deals with the allocation of vast amounts of public money to many different providers for the care of large numbers of vulnerable people with differing needs.

7    The Act sets out the scheme at a general level and leaves the detail of matters such as eligibility for subsidies and the amount of the subsidies to delegated legislation. Under delegated legislation, individual care recipients are classified according to the level of care they need, and a monetary amount for each classification is prescribed. In broad terms, the higher the care needs of an individual care recipient, the higher the classification and the higher the amount of the daily subsidy paid to the aged care provider for the care of that person.

8    The objects of the Act are set out in s 2-1(1). One of the objects is promoting high quality of care and accommodation for recipients of aged care services that meets the needs of individuals. Another is facilitating access to aged care services by those who need them. Section 2-1(2) provides that in construing the objects, due regard must be had to the limited resources available to support services and programs and the need to consider equity and merit in accessing those resources.

9    Chapter 2 of the Act deals with approval of aged care providers and aged care recipients, the allocation of places for aged care services and, in Pt 2.4, classification of the recipients of aged care. It is Pt 2.4 with which this appeal is principally concerned.

10    Chapter 3 provides for who is eligible for a residential care subsidy, how the residential care subsidy is paid and calculation of the amount of the subsidy.

11    Chapter 4 deals with accountability and the responsibilities of approved providers for the quality of care they provide, the rights of the care recipients and sanctions for care providers who do not meet their responsibilities.

12    Part 2.3 of Ch 2 provides that a person must be approved to receive residential care, home care or flexible care before any subsidy for such care can be paid. As this case is concerned only with the subsidy for residential care, it is unnecessary to deal with the provisions concerning home care and flexible care.

13    Section 22-3(1) allows a person to apply in writing to the Secretary for the person to be approved as a recipient of aged care. Section 22-1(1) allows the Secretary to approve a person as the recipient of residential care. Under s 22-4(1), before deciding whether to approve a person, the Secretary must ensure that the “care needs” for the person have been assessed.

14    Section 96-1 provides that the Minister may, by legislative instrument, make various Principles. Such Principles are to provide for matters required or permitted to be made by, or necessary or convenient to be provided in order to carry out or give effect to, specified and corresponding Parts or sections of the Act. For example, the Minister may make Classification Principles providing for matters in Pt 2.4 of the Act.

15    Part 2.4 deals with the classification of care recipients. The classification of a care recipient ultimately affects the amount of the residential care subsidy payable to an approved care provider.

16    Section 25-2(1) provides that the Classification Principles may set out the classification levels for care recipients being provided with residential care. Under s 25-2(4), the Classification Principles may specify the criteria, in respect of each classification level, for determining which level applies to a care recipient.

17    Section 25-3(1) requires the approved provider to make an appraisal of the level of care needed by a residential care recipient. Section 25-3(3) requires the appraisal to be made in a form approved by the Secretary and to be made in accordance with the procedures specified in the Classification Principles.

18    Importantly, s 25-1(1) provides that the Secretary must classify the care recipient “according to the level of care the care recipient needs, relative to the needs of other care recipients”. Under s 25-2(2), the classification must specify the appropriate classification level for the care recipient, and the Classification Principles may specify methods or procedures that the Secretary must follow in determining the appropriate classification level.

19    Section 25-1(3) requires that in classifying the care recipient, the Secretary must take into account the appraisal made in respect of the care recipient under s 25-3, and must take into account any other matters specified in the Classification Principles.

20    Section 29-1 provides, relevantly:

29-1    Changing classifications

(1)    The Secretary must change a classification if the Secretary is satisfied that:

(a)    the classification was based on an incorrect or inaccurate appraisal under section 25-3 or reappraisal under section 27-5; or

(b)    the classification was, for any other reason, incorrect.

…

(2)    A classification cannot be changed in any other circumstances, except when classifications are renewed under section 27-6.

(3)    Before changing a classification under subsection (1), the Secretary must review it, having regard to:

(a)    any material on which the classification was based that the Secretary considers relevant; and

(b)    any matters specified in the Classification Principles as matters to which the Secretary must have regard; and

(c)    any other material or information that the Secretary considers relevant (including material or information that has become available since the classification was made).

21    This case is concerned with the Secretary’s decision under s 29-1(1) to reduce the classification levels for the five residents of Footscray Aged Care. It may be seen that the scheme requires the approved provider to make an appraisal of the level of care needed by a care recipient and for the Secretary to take that appraisal into account when classifying the care recipient. However, if the classification is based on an incorrect or inaccurate appraisal, or if the classification is for any other reason incorrect, the Secretary must change the classification.

22    Part 3.1 of Ch 3 deals with who is eligible for residential care subsidy, how the subsidy is paid and the amount of the subsidy.

23    Section 43-1(1) provides that the residential care subsidy is payable by the Commonwealth to an approved provider in respect of each payment period during which the approved provider is eligible for the subsidy.

24    The expression “residential care” is defined in s 41-3(1) to mean personal care and/or nursing care that is provided to a person in a residential facility in which the person is also provided with accommodation. The care and accommodation must include appropriate staffing to meet the nursing and personal care needs of the person, meals and cleaning services, and appropriate furnishings, furniture and equipment.

25    Under s 44-2(1) the amount of the residential care subsidy payable to an approved provider is worked out by adding together the amounts of the residential care subsidy for each care recipient to whom the approved provider provided residential care during a relevant payment period.

26    Section 44-2(2) provides that the amount of the residential care subsidy for a care recipient is worked out by starting with the “basic subsidy amount” and then adding or deducting certain other amounts. Sections 44-3(2) and (3) allow the Minister to determine the basic subsidy amount based on matters including the classification levels for care recipients being provided with residential care, any matters specified in the Subsidy Principles and any other matters determined by the Minister.

The Classification Principles

27    The Minister made the Classification Principles 1997 (“the Classification Principles”) pursuant to his power under s 96-1 of the Act. Although the Classification Principles have been superseded by the Classification Principles 2014, it is common ground that they remain relevant for the purposes of the appeal.

28    Section 9.17 of the Classification Principles dealt with the method of making the appraisal required under s 25-3 of the Act. It provided, relevantly:

9.17    Appraisal procedure

…

(2)    The person making the appraisal must:

(a)    complete an Answer Appraisal Pack in accordance with the User Guide, using:

(i)    accurate and reliable information; and

(ii)    if required by the Answer Appraisal Pack, the assessment tools in the Assessment Pack; and

(b)    complete an application for classification using the completed Answer Appraisal Pack.

29    Section 9.3 of the Classification Principles defined the “Answer Appraisal Pack” and “User Guide” to be specified documents published by the Department of Health and Ageing.

30    It may be noted that the Answer Appraisal Pack and the User Guide have been superseded by more recent versions published on 1 May 2013. The parties agree that the older versions apply to some of the five residents, while the newer versions apply to the others. The differences between the older versions and the newer ones are minor and are not material to this appeal.

31    Section 9.3B(2) of the Classification Principles required the Secretary to use an application for classification completed in accordance with s 9.17 to determine the appropriate classification level for the care recipient. The section also specified the steps which the Secretary must follow to determine the appropriate classification level.

32    These steps required the use of Sch 1 to the Classification Principles to determine “domain scores” for the “Activities of Daily Living Domain”, the “Behaviour Domain”, and the “Complex Health Care domain” for the care recipient. The domain score in Sch 1 for each domain is obtained by using ratings of A, B, C or D derived from the Answer Appraisal Pack. The Secretary must then identify the domain category in Sch 2 that applies to the domain score. The categories for each of the domains are Nil, Low, Medium and High.

The Basic Subsidy Determination

33    The Minister is required under s 44-3(2) of the Act to determine the amount of the basic subsidy by legislative instrument. The relevant instrument is the Aged Care (Residential Care – Amount of Basic Subsidy) Determination 2012 (No. 1) (“the Determination”). Schedule 1 of the Determination assigns a monetary amount to each domain category. Sections 7 and 8 of the Determination require the basic subsidy amount, or “ACFI amount”, for each day to be calculated by adding the domain scores for each domain category together.

34    This case is concerned only with the Complex Health Care domain. The amounts specified in Sch 1 for the Complex Health Care (or “CHC”) domain are as follows:

35    It may be seen that the higher the CHC category for a care recipient the greater amount of the subsidy. The controversial issue in this case is the appropriate classification of the five residents of Footscray Aged Care.

The User Guide and Answer Appraisal Pack

36    The Classification Principles required the use of the Aged Care Funding Instrument (“ACFI”) User Guide and Answer Appraisal Pack issued by the Department of Health and Ageing to determine the appropriate domain classifications for each care recipient.

37    The User Guide is described in its introduction as a “resource allocation instrument”. It states that it assesses “core care needs” as a basis for allocating funding, and that it focusses on care needs related to day to day, high frequency need for care.

38    The Answer Appraisal Pack consists of 12 check-lists (described as “ACFI 1” to “ACFI 12”). Each check-list deals with an aspect of the care needs of an individual care recipient. The first five check-lists are concerned with Daily Living needs – nutrition, mobility, personal hygiene, toileting and continence. The sixth to tenth check-lists deal with Behaviour needs – cognitive skills, wandering, verbal behaviour, physical behaviour and depression. The eleventh and twelfth check-lists deal with Complex Health Care needs – medication and complex health care procedures (ie. therapeutic or medical procedures).

39    Each check-list contains a series of boxes containing a description of the care recipient’s needs in relation to the area, such as nutrition or mobility, being dealt with. The care provider is required to tick the boxes that appropriately describe the resident’s care needs. Each box is given a score. The scores are added up to produce a rating of A, B, C or D for each check-list. Those ratings are then applied in Sch 1 of the Classification Principles to arrive at a domain score, which is then applied in Sch 2 to obtain a category for each domain of Nil, Low, Medium or High.

40    An example of the classification of a particular care recipient, and the daily basic subsidy payable, might be:

41    This appeal is concerned only with the ACFI 12 check-list in the Answer Appraisal Pack. That category deals with complex medical and therapeutic procedures needed by the care recipient in the Complex Health Care domain. The check-list contains 19 items which are to be ticked by the care provider if appropriate.

42    This case is concerned with only three items in ACFI 12, Items 3, 4a and 4b. The relevant parts of the check-list are as follows:

43    Section 9.17 of the Classification Principles required that the approved care provider must complete the Answer Appraisal Pack in accordance with the User Guide. The User Guide sets out instructions for the completion of each of the twelve check-lists, as well as definitions and notes relevant to the interpretation of each check-list.

44    The User Guide contains the following material dealing with the ACFI 12 Complex Health Care check-list under the heading “Description”:

This question relates to the assessed need for ongoing complex health care procedures and activities. It excludes temporary nursing interventions e.g. management of temporary post-surgical catheters or stomas, management of minor injuries or acute illnesses such as colds/flu.

The ratings in this question relate to the technical complexity and frequency of the procedures.

Only the stated procedures or health care needs that have been identified in a directive (that may include an assessment) by a registered nurse including nurse practitioner, or other appropriate medical or health professional, are taken into account. Identify the procedure required in relation to usual (not exceptional) care needs and record the frequency of this procedure. Where a minimum frequency is specified as ‘at least weekly’ and a frequency is less than this, it is not taken into account in calculating a rating.

A nurse practitioner directive refers to a nursing directive by a nurse practitioner that describes the complex health care procedure to be performed and the associated management and/or treatment plan.

A registered nurse directive refers to a nursing directive by a nurse practitioner or registered nurse that describes the complex health care procedure to be performed and the associated management and/or treatment plan.

A medical practitioner directive refers to a medical directive by a general or specialist medical practitioner or a consultant physician that describes the complex health care procedure to be performed and the associated management and/or treatment plan.

An allied health professional directive refers to a directive by a chiropodist or podiatrist, chiropractor, dietitian, osteopath, physiotherapist, occupational therapist or speech pathologist that describes the complex health care procedure to be performed and the associated management and/or treatment plan. The allied health professional must be appropriately qualified to develop the directive for that procedure.

Where the management and practice is to be undertaken by an allied health professional as listed above in the description of allied health professional directive, the allied health professional must be acting within their scope of practice.

Complex Pain Management

Under item 4a Complex Health Care, a directive that describes the complex pain management to be performed must be given by a registered nurse or a medical practitioner or an allied health professional included on the list of allied health professionals. Under item 4a, a registered nurse or an allied health professional may provide complex pain management and practice.

Under Item 4b pain management services would need to be provided by a listed allied health professional and the directive given by a medical practitioner or listed allied health professional.

It is permissible for the service to be provided by a different health professional than the one who gave the directive, provided they are included in the list of health professionals who can undertake the service and are operating within their scope of practice.

Under Item 4b to meet this requirement consistent ongoing treatment must be provided as required by the resident.

'Technical equipment designed specifically for pain management' refers to electro-therapeutic equipment such as TENS, interferential therapy, ultrasonic therapy, laser therapy and wax baths, The Department of Health and Ageing does not maintain an exhaustive list of equipment that can be included as this is subject to change over time.

(Underlining added.)

45    This appeal is concerned with the proper construction of Items 4a and 4b of the ACFI 12, as well as the underlined parts of the notes to those items in the User Guide.

The delegates’ decisions

46    On 17 December 2013, delegates of the Secretary made decisions reducing the classification of 10 residents of Footscray Aged Care pursuant to s 29-1 of the Act. The respondent then sought internal reconsideration of the decisions in respect of eight of those care recipients.

47    On 14 April 2014, another delegate of the Secretary set aside the decision in relation to one care recipient, but confirmed the decisions in relation to the other seven.

48    On 12 May 2014, the respondent filed an application in the Tribunal for review of the reconsideration decision, but only in relation to five of the care recipients.

49    The reduction in the classification level of each of the five care recipients resulted from a change to each of their ratings under the ACFI 12 Complex Health Care check-list in the Answer Appraisal Pack. The Complex Health Care category for four of the care recipients was reduced from High to Medium, and from High to Low for the remaining resident.

50    The delegates’ reasons for reducing the Complex Health Care ratings were similar for each of the five care recipients. The reasons can be explained by reference to the facts concerning one of the care recipients, described as “CR3” by the Tribunal.

51    CR3 suffers from pain in both knees, both shoulders and in his lower back. A physiotherapist issued a direction in writing to the staff of Footscray Aged Care to provide him with therapeutic massage to both knees and to apply TENS (Transcutaneous Electrical Nerve Stimulation) to his shoulders and lower back. The direction did not specify that the treatment was to be performed by a physiotherapist. The treatment was carried out by a member of the staff of Footscray Aged Care who was a physiotherapy assistant, not a physiotherapist. The work of the physiotherapy assistant was supervised in a general way by a physiotherapist, but it appears that the physiotherapist was not present when the treatment was being carried out.

52    When the respondent completed the Answer Appraisal Pack for the purposes of s 25-3(1) of the Act, it appraised CR3 as coming within Item 4b in ACFI 12. The initial classification made by the Secretary was based on that appraisal. When making their decisions under s 29-1(1) of the Act, the Secretary’s delegates, interpreted Item 4b as requiring the complex pain management and practice to be “undertaken by an allied health professional”, in the sense of requiring that the therapeutic massage and pain management actually be performed by a physiotherapist. The delegates decided that CR3 came within Item 3 of ACFI 12, not Item 4b, as CR3’s treatment was performed by a physiotherapy assistant, not a physiotherapist. This resulted in a reduction of CR3’s Complex Health Care category from High to Medium, with a consequent reduction in the daily basic subsidy amount payable to the respondent.

53    The delegates did not expressly state whether the decisions to change the classifications were made under para (a) or para (b) of s 29-1(1) of the Act in respect of any of the five residents. However, as each decision focussed on the merits of the appraisals made by the care provider, it must be inferred that the decisions were made under para (a), which requires the Secretary to change a classification where it is based on an incorrect or inaccurate appraisal made under s 25-3 of the Act.

The Tribunal’s decision

54    Before the Tribunal, the respondent contended, inter alia, that while Items 4a and 4b require that a Directive as to treatment be given by an allied health professional (or medical practitioner), they do not require that the treatment be performed by an allied health professional. The respondent argued that the care recipient can fit within Items 4a and 4b even if the treatment is carried out by a physiotherapy assistant or other staff member.

55    The Tribunal concluded that “the notes to Items 4a and 4b are outside the power of the Minister to make”.

56    The Tribunal took as its starting point a comparison of the word “undertaken” in Items 4a and 4b of ACFI 12 with the words “provide” and “provided” in the section of the User Guide dealing with Items 4a and 4b. The Tribunal considered that the fact that “undertaken” had been chosen in one context and “provide” chosen in a related context, suggested that the words were intended to have different meanings.

57    The Tribunal decided that the word “provide” meant “to supply” – this required an allied health professional to personally perform the treatment. On the other hand, the relevant meaning of “undertaken” was “to accept (a duty, responsibility or task)”. The Tribunal decided that the use of the word “undertaken” in Items 4a and 4b required only that the relevant health professional must accept the duty or responsibility of attending to complex pain management and practice, but need not necessarily perform the services personally.

58    The Tribunal decided that a second factor favouring such a construction was the Code of Conduct and the Position Statement issued by the Australian Physiotherapists Association. Those documents recognise that a physiotherapist may delegate tasks to others, while retaining responsibility for the delegated tasks and for ensuring that the person to whom they are delegated is appropriately skilled and competent.

59    The Tribunal referred to the Minister’s power under s 96-1 of the Act to make Classification Principles necessary or convenient in order to carry out or give effect to Pt 2.4 of the Act. The Tribunal noted that s 25-1 of the Act requires that the Secretary classify a care recipient “according to the level of care that the care recipient needs, relative to the needs of the other care recipients”. The Tribunal then referred to nine categories of provisions in Pt 2.4 which refer to what the Classification Principles may specify or set out.

60    The Tribunal concluded that the Classification Principles are required to have regard to the level of care each care recipient needs, but to do so in a way that has regard to those needs relative to the needs of other care recipients. The Tribunal considered that the role of each of the ACFI check-lists is to ascertain the care needs of an individual care recipient. Their role is not to ascertain what care is actually being provided to an individual care recipient. If there is a failure to provide the care that is needed, that is dealt with by the mechanisms of the Act allowing the Secretary to impose sanctions on the approved provider under Pts 4.3 and 4.4.

61    The Tribunal then said that absent the User Guide notes relevant to Items 4a and 4b of ACFI 12, those items would be read as directed to the treatment needs of the care recipient, and not what is in fact provided. However, the notes purported to impose a requirement that the classification be made by reference to what treatment was provided, rather than what was needed. The Tribunal concluded that it was outside the Minister’s power to prescribe Classification Principles which adopt the parts of the User Guide which categorise a care recipient according to what care is provided, rather than what is needed.

62    The Tribunal concluded that Items 4a and 4b of ACFI 12 required only that the relevant health professional must accept the duty or responsibility of attending to complex pain management and practice, but need not necessarily perform the services personally. It decided that as the physiotherapy assistant who performed the treatment was supervised by a qualified physiotherapist, the five residents were appropriately categorised in Items 4a or 4b.

The grounds of appeal and the notice of contention

63    The applicant’s grounds of appeal are too prolix to conveniently set out in full. They may be summarised as follows:

(a)    The Tribunal erred in deciding that parts of the Classification Principles made under s 96-1 of the Act purported to classify aged care recipients using impermissible criteria, and were therefore beyond the Minister’s powers to make.

(b)    The Tribunal misconstrued the word “undertaken” in Items 4a and 4b of ACFI 12 as allowing for treatment of care recipients to be merely supervised, rather than actually performed, by an allied health professional.

64    The respondent submits that the Tribunal’s decision was correct for the reasons given by the Tribunal, but has filed a notice of contention. The respondent contends that even if the applicant’s grounds are upheld, the appeal should be dismissed for the following reasons:

(a)    The words “undertaken” in Items 4a and 4b in the Answer Appraisal Pack and “provided” in the User Guide notes should be interpreted as being synonymous, such that each allows for treatment to be merely supervised, rather than actually performed.

(b)    Items 4a and 4b of ACFI 12, on their proper construction, are in fact satisfied in respect of the five residents, as may be seen from an examination of the evidence before the Tribunal.

The parties’ submissions

65    The applicant submits that the Tribunal erred in concluding that it was beyond the Minister’s power to adopt the notes in the User Guide dealing with Items 4a and 4b of ACFI 12 as part of the Classification Principles. He submits that the error arose because the Tribunal construed the permitted subject matter of the Classification Principles too narrowly.

66    The applicant argues that, contrary to the Tribunal’s view, the Classification Principles may take into account the qualifications held by, and the expertise of, the persons engaged to provide care to each care recipient. He submits that the Classification Principles may take into account the additional costs to care providers of responding to the care needs of residential care recipients by having health professionals on hand to actually carry out any required procedures. He submits that, in that context, the Classification Principles may permissibly address whether, and how, the care needs of a care recipient are in fact provided.

67    The applicant submits that the Tribunal was incorrect to find that Ch 4 of the Act deals exclusively with a care provider’s failure to meet the care needs of a care recipient. He contends that, rather, if the care provider’s records show that the care needs directed by a medical practitioner or allied health care practitioner are not in fact being provided, that can demonstrate that the care provider incorrectly appraised the needs of the care recipient, justifying a change in classification under s 29-1(1) of the Act.

68    The applicant also submits that the Tribunal erred in its construction of the words “complex pain management and practice undertaken by an allied health professional” in Items 4a and 4b of ACFI 12 by finding that those items apply if an allied health professional accepts responsibility for another person carrying out the tasks required for that management and practice. He submits that those items require that an allied health professional must perform the required tasks. The applicant argues that the Tribunal drew a false distinction between “undertaking” and “providing” complex pain management.

69    The respondent submits that the Tribunal’s analysis and its conclusions are correct for the reasons given by the Tribunal. In particular, the respondent submits that the Tribunal correctly decided that the notes in the User Guide purport to provide for classification to take place not according to the needs of the care recipient, but by reference to what care is provided, and are therefore invalid. It submits that the question of what care must be provided is dealt with exclusively in Ch 4, whereas the Classification Principles must be confined to matters arising under Pt 2.4 in Ch 2. It submits that the fiscal consequences of a classification are dealt with in Ch 3, not Pt 2.4, and therefore may not be dealt with under the Classification Principles. Further, it submits that the care records kept by an approved provider showing the treatment that is provided cannot bear upon the needs of the care recipient – the needs remain, whether or not they are provided for.

70    The respondent submits that the Tribunal did not err in its construction of Items 4a and 4b of ACFI 12, or in its construction of the notes in the User Guide relevant to those items. It argues that “provide” and “undertake” are not synonyms, and that the context indicates that they were intended to bear different meanings. It submits that the meanings attributed to those words by the Tribunal are correct.

71    The respondent submits, in the alternative, that “provide” and “undertake” should be construed to have the same meaning in the context, namely that each contemplates the acceptance of a responsibility, but not necessarily the performance of the treatment.

72    The respondent further submits that even if it was within the Minister’s power to adopt the notes for “Complex Health Care procedures” in the User Guide, Items 4a and 4b of ACFI 12, on their proper construction, are satisfied in respect of the five residents. It argues that an examination of the Directives, pain assessments and other records shows that the five residents needed treatment by a physiotherapist, and the fact that treatment was in fact provided by a non-physiotherapist did not change their needs. They argue that whether Items 4a and 4b are satisfied is to be determined only by reference to the aged care recipient’s need for care, not what is actually provided.

Consideration

73    There are four issues to consider. The first issue is one of construction of the Act. It is whether the Act limits the Minister’s power to make Classification Principles by requiring that the classification be made only according to the needs of the care recipient, relative to the needs of other care recipients.

74    The second issue is whether the Classification Principles purport to classify care recipients otherwise than according to their needs, relative to the needs of other care recipients. More particularly, the issue is whether they purport to classify care recipients according to the treatment actually provided to the care recipient. This issue involves construction of Items 4a and 4b of ACFI 12 in the Answer Appraisal Pack and the notes to those items in the User Guide.

75    The third issue is the meaning of the phrase “undertaken by an allied health professional” in Items 4a and 4b of ACFI 12. It is convenient to consider the second and third issues together, as they are related.

76    The fourth issue is one raised in the respondent’s amended notice of contention. It is whether an examination of the Directives and other records before the Tribunal shows that Items 4a and 4b of ACFI 12 are in fact satisfied in respect of the five residents.

The first issue: Limits upon the Minister’s power to make Classification Principles

77    The Minister’s power to make the Classification Principles, as legislative instruments, stems from s 96-1 of the Act.

78    At the time the Classification Principles were made, the construction and permissible content of legislative instruments was dealt with in the Legislative Instruments Act 2003 (Cth). That Act was renamed the Legislation Act 2003 (Cth) and amended with effect from 5 March 2016. However, it is the Legislative Instruments Act provisions which remain relevant to the present appeal.

79    The Classification Principles are a legislative instrument: see ss 8(2) and (3) of the Legislative Instruments Act and the Federal Register of Legislation.

80    Section 14(1) of the Legislative Instruments Act provided that a legislative instrument may, unless the contrary intention appears, make provision in relation to a matter “by applying, adopting or incorporating…any matter contained in any other instrument or writing as in force or existing at the time when the…legislative instrument takes effect”. In this case, the Classification Principles incorporated the User Guide and the Answer Appraisal Pack, which were existing documents, and they became part of the Classification Principles.

81    Section 96-1 of the Act imposes two limitations upon what matters may be provided for in the Classification Principles. Firstly, s 96-1 provides the Minister may make 18 specified categories of Principles, each providing for “matters required or permitted to be made by”, or “necessary or convenient to be provided in order to carry out or give effect to” a specified Part or section of the Act. Section 96-1 is cast in terms that compartmentalise the permitted subject matter of each of the Principles that the Minister is permitted to make. For example, the Classification Principles can only deal with the classification of care recipients under Pt 2.4, and cannot deal with matters arising under Pt 4.1 or Pt 4.4, which must instead be dealt with by the Quality of Care Principles and Sanctions Principles respectively. There is the possibility, however, of some degree of overlap between the different Principles because their permitted subject matter includes matters “necessary or convenient to be provided in order to carry out or give effect to” each respective Part or section.

82    Secondly, the Minister’s power under s 96-1 must be understood as being limited to a power to make Classification Principles not inconsistent with the Act.

83    Section 24-2, which is in Pt 2.4 of the Act, states that, “The provisions of this Part indicate when a particular matter is or may be dealt with in these [Classification Principles]”. A number of provisions then follow stating what the Classification Principles may set out, provide for, specify, or exclude.

84    Part 2.4 does not expressly state any matters that the Classification Principles cannot provide for. However, an implied limitation is found in s 25-1 of the Act. That section provides:

25-1    Classification of care recipients

(1)    If the Secretary receives an appraisal under section 25-3 in respect of:

(a)    a care recipient who is approved under Part 2.3 for residential care; or

(b)    a care recipient who is approved under Part 2.3 for flexible care and whose flexible care is of a kind specified in the Classification Principles;

the Secretary must classify the care recipient according to the level of care the care recipient needs, relative to the needs of other care recipients.

(2)    The classification must specify the appropriate classification level for the care recipient (see section 25-2). The Classification Principles may specify methods or procedures that the Secretary must follow in determining the appropriate classification level for the care recipient.

(3)    In classifying the care recipient, the Secretary:

(a)    must take into account the appraisal made in respect of the care recipient under section 25-3; and

(b)    must take into account any other matters specified in the Classification Principles.

…

85    Section 25-1(1) expressly requires the Secretary to classify the care recipient according to two criteria, namely the level of care the care recipient needs, and the relativity of the care recipients needs to the needs of other care recipients. By providing that the Secretary must classify the care recipient according to those matters, the provision implicitly prohibits the Secretary from using other criteria to carry out the classification.

86    Section 25-1(2) provides that the Secretary must follow the methods or procedures specified in the Classification Principles and s 25-1(3) requires the Secretary to take into account any other matters specified in the Classification Principles. If the Classification Principles were to provide for the classification of care recipients according to criteria other than the care recipient’s needs, relative to the needs of other care recipients, the Secretary could not comply with s 25-1(1) and, at the same time, comply with ss 25-1(2) and (3). The Classification Principles would be inconsistent with s 25-1(1) of the Act, and would be invalid to that extent.

87    Therefore, the power of the Minister to make Classification Principles must be construed as limited by a requirement that they may only provide for the classification of the care recipient according to the level of care the care recipient needs, relative to the needs of other care recipients. This aspect of the Tribunal’s decision was correct.

88    We reject the applicant’s submission that the Classification Principles may validly categorise care recipients according to what care is actually provided, or according to the cost of providing the care. While those matters may be described as “convenient to be provided in order to carry out or give effect to [Pt 2.4]” within s 96-1 of the Act, they are inconsistent with s 25-1(1). It is left to other parts of the Act and other Principles to deal with what care must be provided and what level of the subsidy is paid to care providers. For example, s 7 of the Quality of Care Principles requires that the approved provider provide the care specified in Sch 1 to any resident who needs it, which includes “treatments and procedures that are carried out according to the instructions of a health professional”. Section  44-3 of the Act allows the Minister to determine the amount of the basic subsidy based on, not only the classification of the care recipient, but the Subsidy Principles and other matters determined by the Minister.

89    The legislative scheme proceeds on the basis that care recipients are classified under the Classification Principles in accordance with the level of care they need, relative to the needs of others; and the care that is needed will be provided for, or arranged to be provided for, by the care provider in return for the payment of a subsidy.

The second issue: Whether the Classification Principles purport to classify care recipients otherwise than according to their needs, relative to other care recipients

The third issue: The meaning of “undertaken by an allied health professional” in Items 4a and 4b

90    The Answer Appraisal Pack and the User Guide form part of the Classification Principles made by the Minister. As the Classification Principles cannot validly categorise or classify care recipients otherwise than according to their care needs, relative to other care recipients, it is necessary to consider whether they purport to do so.

91    The construction of legislative instruments is dealt with in the Legislative Instruments Act. Section 13 of the Legislative Instruments Act provided, relevantly:

13    Construction of legislative instruments

(1)    If enabling legislation confers on a rule-maker the power to make a legislative instrument, then, unless the contrary intention appears:

(a)    the Acts Interpretation Act 1901 applies to any instrument so made as if it were an Act and as if each provision of the instrument were a section of an Act; and

…

(c)    any instrument so made is to be read and construed subject to the enabling legislation as in force from time to time, and so as not to exceed the power of the rule-maker.

…

92    In this case, s 13(1)(c) of the Legislative Instruments Act has particular significance.

93    In Gill v Donald Humberstone & Co Ltd [1963] 1 WLR 929, Lord Reid said at 934-935, speaking of a set of regulations dealing with safety practices for building work:

They are addressed to practical people skilled in the particular trade or industry, and their primary purpose is to prevent accidents by prescribing appropriate precautions…They have often evolved by stages as in the present case, and as a result they often exhibit minor inconsistencies, overlapping and gaps. So they ought to be construed in light of practical considerations, rather than meticulous comparison of the language of their various provisions such as might be appropriate in construing sections of an Act of Parliament…if the language is capable of more than one interpretation, we ought to discard the more natural meaning if it leads to an unreasonable result, and adopt that interpretation which leads to a reasonably practicable result.

94    The User Guide and the Answer Appraisal Pack are analogous to the regulations considered by Lord Reid. The terminology used in those instruments suggests they were, at least in part, developed from established practices. They attempt to devise a workable way to classify care recipients so that appropriate subsidies might be determined. They were designed to be applied in a practical way by aged care providers and their employees. The language used in the User Guide and the Answer Appraisal Pack should not be construed pedantically, but in light of practical considerations, including the consequences of differing interpretations.

95    However, it must be acknowledged that the User Gide and Answer Appraisal Pack are riddled with ambiguous, uncertain and inconsistent language. That makes it difficult for both aged care providers and departmental officers to give coherent meaning to the provisions in dispute.

96    At this stage, it is worth repeating the relevant items of ACFI 12 in the Answer Appraisal Pack:

97    Section 9.17(2)(a) of the Classification Principles required the person appraising the level of care needed by a care recipient to complete an Answer Appraisal Pack “in accordance with the User Guide”. The notes in the User Guide consist of definitions of terms used in the check-lists, explanations of particular items and instructions for the completion of the check-lists. It is apparent that the notes in User Guide are intended to elaborate upon and explain the terse language used in the check-lists themselves.

98    The User Guide notes relating to Items 4a and 4b of ACFI 12 state as follows:

Under item 4a, a registered nurse or an allied health professional may provide complex pain management and practice.

Under Item 4b pain management services would need to be provided by a listed allied health professional and the directive given by a medical practitioner or listed allied health professional.

It is permissible for the service to be provided by a different health professional than the one who gave the directive, provided they are included in the list of health professionals who can undertake the service and are operating within their scope of practice.

99    It is plain that the notes seek to influence or control the construction of Items 4a and 4b of ACFI 12. In particular, the notes for Item 4b state that under that item “pain management services would need to be provided by a listed allied health professional.” It is necessary to construe that phrase. The question is whether the notes to Item 4b purport to categorise care recipients according to the treatment actually provided to them, rather than according to their care needs.

100    The Tribunal noted that the meaning of the word “provide” in Chambers 21st Century Dictionary includes “to supply”. That is consistent with the Macquarie Dictionary definition. However, the word “supply” may carry a connotation of the allied health professional or registered nurse arranging for the treatment to be provided by someone who is not an allied health professional or a registered nurse. In our opinion, the word “provided” itself in the User Guide does not have that connotation. It is used in a context of treatment by individual health professionals, such as physiotherapists, podiatrists, chiropractors, occupational therapists and speech therapists. Such professionals would ordinarily be thought of as performing treatment personally, rather than delegating the task of doing so to an unqualified person. The word “provided” is used in that sense. It refers to treatment actually performed by the allied health professional or registered nurse.

101    The Tribunal correctly construed the word “provide” in the notes in the User Guide, but went on to hold that this meant that, by influencing the construction of Items 4a or 4b, the notes purport to categorise care recipients by reference to the care actually provided, rather than the care that is needed. The Tribunal said:

To modify what is needed by reference to what is provided would, it seems to me, be beyond the power conferred on the Minister by the AC Act.

102    In conducting its analysis, the Tribunal did not distinguish between the notes for Item 4a and those for Item 4b in the User Guide. The notes for Item 4a indicate that “a registered nurse or allied health professional may provide complex pain management and practice”. In contrast, the notes for Item 4b indicate that “pain management services would need to be provided by a listed allied health professional”. On their face, the notes for Item 4a suggest that a care recipient may come within that item whether or not the complex pain management and practice is provided by an allied health professional. It is convenient to leave aside the construction of Item 4a for the moment. We will return to that item later in these reasons.

103    That leaves the question of whether the notes for Item 4b should be construed as indicating that the care recipient cannot fall within that category unless that the treatment is actually provided, or performed, by an allied health professional. That is the way in which the Secretary’s delegates interpreted the notes. It may be acknowledged that, on their face, that is what the notes say. On that construction, the notes seem to categorise care recipients by reference to the treatment actually provided to them, rather than the treatment that they need. If that is their proper construction then it would be beyond the power of the Minister to adopt those notes as part of the Classification Principles.

104    To consider whether the notes for Item 4b should be construed in this way, it is necessary to conduct a closer analysis of the Answer Appraisal Pack.

105    The second column in ACFI 12 is headed “Complex Health Care procedures” and the third column is headed “Requirements”. Earlier, the User Guide describes these “Requirements” as “Documentation requirements”, which must be retained and stored for audit purposes. These documents are required in order for the care provider to make an appraisal of the care recipients’ needs pursuant to s 25-3(1) of the Act, and for the Secretary to classify the recipient pursuant to s 25-1(1). The requirements for Items 4a and 4b are a Directive provided by a medical practitioner or allied health professional, a pain assessment and, on request, the aged care provider’s record of treatment.

106    The Directive assumes particular importance for the classification of care recipients. The expressions “medical practitioner directive” and “allied health professional directive” are defined in the User Guide notes for ACFI 12. An “allied health professional directive” is defined to refer to a Directive by a physiotherapist (or another specified allied health professional) that “describes a complex health care procedure to be performed and the associated management and/or treatment plan”. The notes state “[o]nly the stated procedures or health care needs that have been identified in a directive…are taken into account”. The notes also say that “[w]here the management and practice is to be undertaken by an allied health professional”, the allied health professional must be acting within the scope of his or her practice. The notes envisage that the Directive will or may deal not only with the nature and frequency of procedures to be performed, but also with whether or not the treatment is to be performed by an allied health professional.

107    Returning to ACFI 12, it is the Directive which provides the documentation or evidence the care provider must use to determine which description (if any) in the “Complex Health Care procedures” column in ACFI 12 a care recipient comes within. The exercise is not a freestanding one to be performed according to the subjective judgement of the care provider conducting the appraisal, but is determined by the Directive issued by a medical practitioner or allied health professional (who will take into account a pain assessment and any records kept by the care provider).

108    If a care recipient is to come within Item 4b, the Directive must indicate that the care recipient needs the “complex pain management and practice” prescribed for that item. The Directive must indicate not only the type of treatment required and that the treatment must be ongoing and provided at least four times per week, but also that the therapeutic massage and/or pain management is to be “undertaken” by an allied health professional. We will come to the meaning of “undertaken” later in these reasons.

109    The Classification Principles require that the Answer Appraisal Pack be completed “in accordance with the User Guide”. The User Guide notes for Item 4b state that the “pain management services would need to be provided by a listed allied health professional”. The question is how those notes and Item 4b can be reconciled.

110    The answer consists of two parts. Firstly, the notes for Item 4b should be construed as stating that “the Directive must indicate that pain management services would need to be provided by a listed allied health professional”. They should not be construed literally as requiring that a listed allied health professional actually provide pain management services if the care recipient is to come within Item 4b.

111    The distinction is a fine, but important, one. It means that the categorisation is not undertaken by reference to the treatment actually provided to the care recipient, but by the care recipient’s need for treatment. That need for treatment will have been assessed by an appropriately qualified person, namely an allied health professional or medical practitioner, and identified in the Directive. Item 4b proceeds on the basis that if the person giving the Directive considers that an allied health professional should provide the complex pain management treatment, the Directive will indicate as much. Interpreting the notes for Item 4b in this way avoids the conclusion reached by the Tribunal that it was beyond the Minister’s power to adopt the notes as part of the Classification Principles.

112    The Act requires that the Classification Principles classify care recipients according to the level of care the care recipient needs, relative to the needs of other care recipients. The test for validity of Item 4b is whether there is “a rational connection” between that requirement and the requirement of Item 4b that the Directive indicate that an allied health professional provide the complex pain management treatment: see NSW v Commonwealth (2006) 229 CLR 1 at [416] (The Work Relations Case). Item 4b contains a tacit assumption that the greater the complex pain management needs of the care recipient, the more qualified the provider of the treatment will ordinarily need to be. In our opinion, that assumption is a rational one, and it was not beyond the power of the Minister to make Classification Principles which incorporated Item 4b of ACFI 12 of the Answer Appraisal Pack and the User Guide notes.

113    Secondly, the word “undertaken” in Item 4b should be construed as meaning “provided”, consistently with the notes in the User Guide. In contrast, the Tribunal considered that because the drafter used different words, “provide” and “undertaken” should be understood to have different meanings. The Tribunal applied a definition of “undertake” taken from Chambers 21st Century Dictionary, namely “to accept (a duty, responsibility or task)”. The Tribunal’s view was that “undertaken” meant that the allied health professional must accept the duty or responsibility of attending to the pain management services, but need not perform the services personally. The respondent describes this as the “extended meaning” of the word. In contrast, the first definition of “undertake” in the Macquarie Dictionary is “to take on oneself (some task, performance, etc.)”. If the first definition is applied that would mean that it is insufficient for the allied health professional to merely delegate the responsibility to someone who is not an allied health professional.

114    The Classification Principles make it clear that the User Guide and Answer Appraisal Pack are intended to operate together. Accordingly, the words “provided” in the User Guide and “undertaken” in ACFI 12 should be reconciled, if possible, rather than differentiated. The meaning of the word “undertaken” in Item 4b should be taken to be “provided”. It refers to services that a Directive indicates are to be performed personally by an allied health professional.

115    The respondent’s alternative submission is that the words “provided” and “undertaken” should both be understood as allowing an allied health provider to merely supervise the treatment, rather than having to perform the treatment personally. The argument relies on “provided” having a meaning akin to the meaning of “supply” discussed at [57]. However, we do not think that is a natural meaning of “provided” in a context where the services of allied health professionals such as physiotherapists are ordinarily thought of as being personal services, rather than services delegated to unqualified persons. We reject the respondent’s argument.

116    In summary, if a care recipient is to come within Item 4b, a Directive must indicate that the treatment is to be undertaken (ie. provided or performed) by an allied health professional. The care provider’s appraisal under s 25-3 of the Act must be based on the Directive.

117    If the care recipient does not come within Item 4b, he or she may instead fall within Item 4a. The notes for Item 4a in the User Guide state that under that item “a registered nurse or an allied health professional may provide complex pain management and practice”. This language is inconsistent with the notes for Item 4b, but is likely to be the product of an inadvertent drafting inconsistency, rather than deliberate use of different terms to indicate that the items were to be interpreted differently. Item 4a should also be interpreted as applying only where a Directive given by a medical practitioner or allied health professional indicates that the treatment is to be undertaken (ie. provided or performed) by an allied health professional or registered nurse. We reach this conclusion for three reasons.

118    Firstly, the language of Item 4a itself does not suggest that it allows for the treatment to be provided by someone other than an allied health professional or registered nurse. It refers to complex pain management and practice “undertaken by an allied health professional or registered nurse.” This suggests a personal service, not a delegated one.

119    Secondly, immediately after the notes for Items 4a and 4b in the User Guide appear the words “It is permissible for the service to be provided by a different health professional to the one who gave the directive”. These words seem to apply to both Items 4a and 4b, but would serve no purpose in relation to Item 4a, unless that item contemplates that the Directive must indicate that treatment must be provided by an allied health professional or registered nurse.

120    Thirdly, both Items 3 and 4a refer to therapeutic massage. If a Directive indicates that the therapeutic massage may be performed by a person who is not an allied health professional or registered nurse there would be no way of telling whether the care recipient comes within Item 3 or Item 4a, unless Item 4a is interpreted as applying only where the Directive states that the treatment is to be provided by an allied health professional or registered nurse.

121    Therefore, Item 4a also applies only where a Directive indicates that the treatment is to be provided by an allied health profession or registered nurse.

122    If the care recipient does not come within Items 4a or 4b, he or she may instead fall within Item 3, provided that a Directive indicates that pain management involving therapeutic massage or application of heat packs at least weekly, and involving at least 20 minutes of staff time in total, is required.

123    It follows from the conclusions reached so far that the Secretary’s decision as to whether to change a care recipient’s classification under s 29-1(1)(a) of the Act on the basis that the care provider’s appraisal was incorrect or inaccurate must depend on whether there is a Directive and the content of any such Directive. That decision cannot be based on whether the treatment indicated in the Directive has or has not been carried out in accordance with the Directive. However, if the care provider does not provide the treatment indicated in the Directive, it may amount to a contravention of s 7 of the Quality of Care Principles and may attract sanctions under Pt 4.4 of the Act.

124    The delegates’ decisions were made pursuant to para (a) of s 29-1(1) of the Act on the basis that “the classification was based on an incorrect or inaccurate appraisal under s 25-3”. The parties’ submissions have not distinguished between para (a) and para (b) of s 29-1(1). The effect of subsection (b) of s 29-1(1), which requires the Secretary to change a care recipient’s classification if the Secretary is satisfied the classification was “for any other reason” incorrect, was not dealt with by the parties. Accordingly, we have not addressed the scope of para (b), or its potential relevance to the present matter.

The fourth issue: Whether on their proper construction Items 4a and 4b are satisfied

125    The respondent submits that the applicant was not entitled to change the classifications of the five residents pursuant to s 29-1(1)(a) because, contrary to the views taken by the delegates, the classifications were not based on an incorrect or inaccurate appraisal under s 25-3.

126    The respondent argues that the appraisals for the five residents were correctly based on their need for treatment to be performed by a physiotherapist. This is said to be demonstrated by examination of the residents’ Directives, pain assessments and other records. The respondent argues that even though the treatment was not actually performed by a physiotherapist, the need for that treatment to be so performed remained. It argues that, accordingly, its appraisals were correct, and there was no basis for the delegates to change the residents’ classifications.

127    Some of the legal aspects of this argument have been addressed already, but there are difficulties for the respondent in prosecuting this argument in the appeal. It was not an argument run before the Tribunal and, consequently, the Tribunal did not rule upon it. The respondent’s argument involves contested issues of fact about the content and interpretation of Directives. It may also require consideration of whether s 29-1(1)(b) provides an alternative pathway for the Secretary’s reclassification of the residents in the circumstances of the matter. It is not convenient for this Court to determine these issues in the appeal: see s 44(7) of the Administrative Appeals Tribunal Act 1975 (Cth). The matter should be remitted to the Tribunal to make a further decision in light of these reasons.

Conclusion

128    Our conclusions may be summarised as follows:

(a)    The Tribunal was correct to decide that the Minister’s power to make Classification Principles is limited by a requirement under s 25-1 of the Act that such Principles classify the care recipient according to the level of care the care recipient needs, relative to the needs of other care recipients.

(b)    The Tribunal made an error of law in deciding that it was beyond the power of the Minister to adopt the User Guide notes to Items 4a and 4b of ACFI 12 of the Answer Appraisal Pack.

(c)    A care recipient will only come within Items 4a or 4b of ACFI 12 if a Directive issued by a medical practitioner or allied health professional indicates that the treatment specified in respect of those items is to be provided (ie. performed) by an allied health professional (or registered nurse, for Item 4a).

(d)    The Tribunal made an error of law in interpreting Items 4a and 4b of ACFI 12 as allowing a care recipient to come within those items where an allied health professional delegates treatment to someone who is not an allied health professional.

(e)    The Secretary’s delegates erred in deciding that the five residents’ classifications could be changed under s 29-1(1)(a) of the Act on the basis that treatment had not in fact been carried out by an allied health professional (or registered nurse, for Item 4a) rather than by reference to the content of the relevant Directives.

129    The appeal has revealed some significant inconsistencies, ambiguities and difficulties in the language of the Answer Appraisal Pack and the User Guide. Those instruments remain part of the current Classification Principles. They are frequently used by aged care providers and their employees, as well as by departmental officers performing important auditing functions under the Act. Those instruments should be reviewed to make them more readily understandable.

130    The appropriate orders are to allow the appeal, to set aside the decision of the Tribunal and to remit the matter to the Tribunal to decide again.

131    This litigation has served to bring some clarity to difficult issues created by anomalies in the drafting of a part of the Classification Principles. In that way, the litigation, which involves an area of concern to a wide section of the public, has served the public interest. While recognising that the respondent does have a financial interest in the outcome of the litigation, it should be acknowledged that the outcome will also have significant consequences for other aged care providers and for the applicant. Further, substantial parts of the applicant’s arguments have failed. In these circumstances, our preliminary view is that there should be no order as to costs. If either party wishes to contend for a different costs order, it should file written submissions within 7 days. Any submissions in response may be filed within a further 7 days.

Associate:    

Dated:    23 August 2016