You onboard a new Care Recipient and your team starts the coordination work straight away – the assessments, the phone calls, the conversations with family that sit behind every care management line item. What most providers don’t immediately clock is that the account meant to fund all of that isn’t actually active yet for that Care Recipient, and won’t be until the following quarter.

It’s a timing rule built into how the program pools and allocates this funding, and it catches even the most experienced finance teams off guard. 

How the care management account actually works

10% of the quarterly budget for Care Recipients on ongoing services is deducted and pooled into your care management account. Restorative Care, End-of-Life and AT-HM Care Recipients sit outside this, with their own separate care management claiming rules. 

This is held by Services Australia and funds the coordination work you do across everyone connected to your service delivery branch. That pool is allocated at the start of each quarter, and calculated using your Care Recipient numbers from the end of the quarter before.

The catch is in how new Care Recipients slot into that calculation. A Care Recipient who joins partway through a quarter doesn’t have a care management allocation for the quarter they join in, since that quarter’s funding was already calculated before they existed in the system (or before they were registered to your provider). The work still needs doing, so it gets funded out of your existing pooled account alongside everyone else’s coordination costs, until their own funding catches up the following quarter.

Why this catches providers off guard

Most providers we speak with understand the 10% deduction well. Fewer have clocked that the deduction doesn’t translate into available funding for a new Care Recipient straight away. If you’re onboarding people steadily across a quarter, that’s a growing group whose care management costs are being absorbed by your pool – with no matching allocation behind them yet.

The funding does eventually increase to match the increased number of Care Recipients, but a finance team tracking care management income against Care Recipient headcount in real time will overstate what’s actually sitting in that account today. The shortfall tends to surface at quarter end, once someone’s reconciling the pool against what was actually delivered.

It’s worth noting this doesn’t always flow one way. Care Recipients who leave partway through a quarter leave their care management allocation behind at your service delivery branch, which acts as a partial offset against the gap created by new joiners. The net position depends on your mix of arrivals and departures across the quarter, which is exactly why tracking both matters. 

What to check before it costs you

If you’re onboarding Care Recipients throughout the quarter, there’s a good chance you’re already carrying this gap without realising it. Here’s what to check before it shows up at reconciliation.

• Count how many Care Recipients you’ve onboarded this quarter. Each one is a care management cost with no funding sitting behind it.
• Look at your forecast for this quarter’s care management income. If it assumes new Care Recipients are already funded, it’s wrong.
• Count your exits for the quarter too. You keep their care management allocation, and that’s real money to offset against the gap.

Get these three right and you’re working from your actual position rather than an assumed one, which is most of the battle.

The takeaway

This is a structural lag built into how pooled funding works, and the providers who model it accurately tend to manage their cashflow far more comfortably than those who assume funding tracks Care Recipient growth in real time. 

Real visibility into your actual care management position, rather than an assumed one, is what separates absorbing this gap smoothly from being caught out by it at quarter end.

Stay ahead of the gap

If you want clearer visibility into your care management account, including new Care Recipients still waiting on their first allocation, we’d love to show you how quickclaim handles it. Get in touch here.