What you need to know about engaging third party service providers



An approved provider who engages a third party service provider can do so under a brokered model (as an agent) or under a subcontracting arrangement (as principal to a subcontractor). It depends on the terms of the particular contractual framework that is agreed.


‘Services may be provided directly by the provider, sub-contracted to another service provider (individual or organisation), or brokered through another organisation’. (Our emphasis.)


Brokerage- a funded provider facilitates the delivery of services to a service user/consumer, using another provider. The costs of the service comes from funds available to support that person.


In the brokerage model the funded provider is an intermediary – the middle man, in lay terms. The provider brokering services is responsible for assessment consumer needs and ensuring the consumer has all the information that they need to decide if they want the services through a brokered arrangement.


Considering consumers in third party arrangements


There may be minimal changes in how the consumer will receive services. Ask the consumer and some will say they like to have the choice and others will say they want a quality service, delivered on time and don’t mind if services are delivered via a brokerage arrangement.

Where a home care provider engages a third party to provide services to a consumer both parties should understand:

  • The context of the request to provide services to a consumer

  • Is the home care providing acting on behalf of the consumer or

  • Is the home care provider sub contracting out services to be delivered by another provider.

Will the consumer, have a contract with the home care provider only or will the consumer have a contract with the third party who is actually providing the service. The questions to ask is whether services are to the approved home care provider or to the consumer.

How much control does the approved home care provider have.


The Department of Health and third party arrangements


In the eyes of the Department of Health and the regulator – Aged Care Quality and Safety Commission - the approved home care provider remains responsible for service quality and meeting all regulatory responsibilities. This means that onus is on the approved home care provider to ensure that the third party provider is “ doing the right thing”.


Will there be a ‘brokerage fee’ (if any), and what will that fee cover. Just because a brokerage feed has been charged, do not assume that a brokerage arrangement is in place.

What are the payment arrangements (who pays who). What are the GST arrangements.

Home care is GST free if you receive a home care subsidy or government funding, and you supply the care to a consumer – and not to another party who is in fact the approved provider.


Monitoring, Reporting and Communications


Whether service provision is via a brokerage or subcontractor model, it is important to “do the paperwork”.


Ensure the contractual arrangement is in place and is kept up to date especially if there are changes in the arrangements. Whilst the financial arrangement and performance measures have been agreed, there are a range of responsibilities for both parties. These include:

  • Care worker induction

  • WHS reporting

  • Incident and hazard reporting

  • Processes for care delivery

  • Reports to be completed by the third party

  • Communication about care recipient needs

At Health Business Solutions, we have developed easy to use tools and processes to help approved home care provider ensure they have tools and processes for subcontractors including:

  • Onboarding

  • Exception reports for currency of compliance checks such as worker screening etc.

  • Supplier audits

  • Report templates to be completed by sub contractors

  • Qualitative and quantitative assessment of performance of sub contractors.

As a provider save yourself the headache and ensure you are covered by having all the tools to help you with the ongoing management of your brokerage/sub contractor management. Contact us today for more information.