The aged care royal commission has been told the commonwealth's aged care funding instrument is too restrictive and stops patients getting the help they need.

The federal government's aged care funding model promotes disability among older Australians due to its one-size-fits-all restrictions, according to an allied health expert.

The Royal Commission into Aged Care Quality and Safety on Friday is set to hear testimony from allied health and state government officials on potential funding models.

It has already heard complaints from allied healthcare providers regarding the Commonwealth's current Aged Care Funding Instrument.

AvantiCare director Lidia Conci says the ACFI is extremely prescriptive about what types of therapy can be administered under the scheme.

"The sort of treatments that can delivered for that specific funding are very prescriptive and are not evidence-based and do not focus on the well-being of the individual," Ms Conci told the inquiry on Thursday.

She claimed it discouraged the use of allied health professionals such as physiotherapists and speech pathologists.

"It actually is an instrument which promotes disability," Concentric Healthcare Services director Nicholas Young said.

The physiotherapist said the model was "absurd" as it forced the same types of treatments to be used on every person instead of helping them improve functionality.

A lack of knowledge from GPs around elderly patient needs was another barrier to treating issues such as chronic pain, he told the inquiry.

Less than four per cent of knee osteoarthritis cases, a common condition in older people, were referred to a physiotherapist or other allied health practitioner, Mr Young said.

He called for the creation of key clinical outcomes, such as walking speed and time taken to stand, so GPs could quickly grasp the problem and make a referral, and also measure the progress of treatment.