AN-ACC Funding Explained: Maximising Revenue for Residential Aged Care

AN-ACC — the Australian National Aged Care Classification — is the funding model that determines how much government subsidy your residential aged care facility receives per resident per day. Understanding how it works isn't optional; it directly determines your revenue.

This article explains what AN-ACC is, how it replaced the old ACFI system, its three funding components, and why tracking classification history and reassessment dates is critical for protecting your facility's income.

What Is AN-ACC?

The Australian National Aged Care Classification is the funding model used to calculate the government subsidy paid to residential aged care providers for each resident. It classifies residents based on their care needs and assigns a daily funding rate accordingly.

AN-ACC was developed by the Independent Health and Aged Care Pricing Authority (IHACPA) as a casemix-based funding model. Unlike its predecessor, AN-ACC uses a standardised assessment process performed by external assessors — not facility staff — to determine each resident's classification.

The daily subsidy rate varies per resident based on their classification. Higher-needs residents attract higher funding. The model is designed to be fairer and more transparent than the system it replaced.

How AN-ACC Replaced ACFI

Before October 2022, residential aged care funding was determined by the Aged Care Funding Instrument (ACFI). Under ACFI, facility staff completed assessments and submitted claims for each resident across three domains: Activities of Daily Living, Behaviour, and Complex Health Care.

ACFI had well-documented problems:

• Facilities were incentivised to "claim up" — documenting the highest possible needs to maximise funding
• The Department conducted validation audits that frequently resulted in funding reductions
• Assessment outcomes varied significantly between facilities for residents with similar needs
• The system was administratively burdensome — nurses spent hours on ACFI paperwork instead of care

AN-ACC addressed these issues by moving the assessment function to independent external assessors. Facilities no longer complete funding assessments themselves — they request an assessment, an external assessor visits, and the classification is determined independently.

The transition occurred on 1 October 2022. All existing ACFI classifications were mapped to AN-ACC equivalents, and from that date forward, all new assessments use the AN-ACC framework.

The Three Funding Components

AN-ACC funding for each resident is built from three components:

1. Base rate (fixed component)

Every residential aged care resident attracts the same base rate, regardless of their care needs. This covers the fundamental costs of providing accommodation and basic services — hotel-like costs that are consistent across all residents.

The base rate is set by the government and adjusted annually. It's the same for every resident in every facility across Australia.

2. Variable component (needs-assessed)

This is the component that varies per resident based on their AN-ACC classification. The external assessor evaluates the resident's function, cognition, and health needs, and assigns a classification that corresponds to a daily funding rate.

AN-ACC has 13 classes, ranging from residents with minimal care needs to those requiring intensive nursing and support. The variable component represents the difference in care cost between a low-needs and high-needs resident.

This is where the assessment process matters most — a higher classification means higher daily funding. The assessment considers:

• Activities of daily living (mobility, personal hygiene, eating, toileting)
• Cognition and behaviour (dementia severity, behavioural symptoms)
• Health conditions (medical complexity, medication management, palliative needs)

3. Adjustment component (top-ups)

The adjustment component provides additional funding for specific circumstances that increase the cost of care beyond what the variable classification captures:

• Respite supplement — for residents admitted on a respite basis (short-term stays)
• Oxygen supplement — for residents requiring continuous oxygen therapy
• Enteral feeding supplement — for residents requiring tube feeding
• Other top-ups — additional supplements may be introduced or adjusted over time

These adjustments are claimed by the facility when the relevant condition applies. They're relatively straightforward — if a resident is on oxygen, you claim the supplement.

How Classification Works

The AN-ACC assessment process works as follows:

1. Request — The facility requests an assessment through the My Aged Care system for a new admission or when a resident's needs have significantly changed.
2. Assessment visit — An independent assessor (funded by the government, not the facility) visits the resident. They use the AN-ACC assessment tool to evaluate function, cognition, and health.
3. Classification — Based on the assessment, the resident is assigned an AN-ACC class (1–13). This determines their variable funding component.
4. Funding starts — The new classification takes effect, and the facility receives the corresponding daily subsidy rate.

The key difference from ACFI: the facility doesn't decide the classification. The external assessor does. This removes the conflict of interest but also means facilities need to ensure they request reassessment when resident needs change — otherwise, the classification stays static even if needs have increased.

Reassessment: When and Why Timing Matters

A resident's AN-ACC classification isn't permanent. Reassessment can occur:

• On significant change — When a resident's care needs increase substantially (e.g., after a fall, stroke, or significant cognitive decline)
• After hospital return — When a resident returns from hospital with increased care needs
• Annual review — Facilities can request periodic reassessment to ensure classifications reflect current needs
• On request — Either the facility or the resident/representative can request reassessment

The timing of reassessment requests directly impacts revenue. If a resident's needs increase in January but the reassessment isn't requested until April, the facility provides three months of higher-acuity care at the lower funding rate. That's money left on the table.

Revenue Risk: Missed Reassessments

The most common AN-ACC revenue leak is failing to request reassessment when a resident's needs have demonstrably changed. Common scenarios:

• Post-hospital return — A resident goes to hospital for a fractured hip, returns with significantly reduced mobility and increased personal care needs. If no reassessment is requested, they remain on their pre-fall classification despite needing more care.
• Progressive cognitive decline — A resident's dementia progresses gradually. At some point, their needs cross a classification threshold — but without a reassessment request, the classification doesn't change.
• New clinical condition — A resident develops a condition requiring ongoing management (e.g., new PEG tube, new oxygen requirement). Without reassessment, the base classification doesn't reflect this.

For a facility with 80 residents, even a handful of missed reassessments can represent thousands of dollars per month in foregone revenue — revenue the facility is entitled to but never receives because nobody tracked the trigger event.

Common Mistakes to Avoid

• Not requesting reassessment after hospital discharge — This is the most frequent miss. Hospital admissions often indicate increased care needs. Make reassessment requests part of the re-admission process.
• Not tracking assessment dates — Without a system that shows when each resident was last assessed, there's no trigger for periodic review.
• Assuming the assessor will notice — The external assessor only assesses what's in front of them on the day. If the resident has a good day, the assessment may not capture their typical needs. Good documentation of care requirements supports accurate classification.
• Not tracking classification history — If a resident's classification decreases after reassessment, you need to understand why and potentially appeal. Without classification history, you can't identify trends or anomalies.

How Software Helps: Tracking and Alerting

Purpose-built aged care software tracks AN-ACC data at the resident level:

• Classification history — Every assessment result recorded with date, assessor, and classification assigned. See how each resident's classification has changed over time.
• Reassessment date alerts — Set review dates (e.g., 90 days after last assessment, or on hospital return). The system alerts when a reassessment should be requested.
• Revenue projections — Current classification × daily rate × occupied beds = projected monthly revenue. See the impact of vacancies and classification changes on your bottom line.
• Per-bed funding visibility — For each occupied bed: which resident, what classification, what daily rate. Roll this up to see total daily, weekly, and monthly revenue projections.

With a tool like KareShift, the AN-ACC classification is stored per resident. When a trigger event occurs (hospital return, significant clinical change), the system prompts the facility to consider a reassessment request. This prevents the silent revenue leak of serving high-needs residents at low-classification funding rates.

Per-Bed Funding Visibility

Understanding your facility's revenue means understanding the per-bed economics:

• Daily rate per bed = Base rate + Variable component (per resident's classification) + Applicable adjustments
• Projected monthly revenue = Sum of all occupied beds' daily rates × days in month
• Occupancy impact = Each empty bed represents the base rate foregone (at minimum)
• Classification uplift opportunity = Residents who may be under-classified represent potential revenue increase

This visibility allows facility managers to forecast revenue accurately, identify under-classified residents who might benefit from reassessment, and understand the financial impact of occupancy changes.

AN-ACC is more transparent and fairer than ACFI — but it still requires active management. The facilities that maximise their revenue aren't gaming the system; they're simply ensuring every resident is correctly classified for their actual care needs and that reassessments happen when circumstances change. Software that tracks classification history, alerts on review dates, and shows per-bed funding makes this manageable at scale. Compare your options on our aged care comparison page.