The Provider Loft

Supporting small and medium NDIS and health providers in Australia

David Kinnane

NDIS regulatory changes are coming: allied health providers should stick together to advocate for participant choice and control

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For allied health NDIS providers, significant regulatory changes are coming:

Uncertainty abounds. We don’t know what the new rules will look like. We don’t know how they will apply to allied health providers.  

At the same time, we’re grappling with pricing limits, worker shortages, inflation, and other business risks. It’s no surprise that many of us complain about upcoming regulatory changes in terms of mandatory registration, increased compliance costs, and more red tape. 

The danger of all this negative talk about costs and risks is that it sounds defensive and even self-indulgent. But, when it comes to regulation, allied health providers have an overwhelmingly positive story to tell and an important role to play in advocating against changes that could reduce NDIS participant choice and control in the real world. 

Allied health professionals are already well-regulated. Most allied health providers work hard to deliver evidence-based supports to participants, and to improve their service quality in response to participant feedback. Like participants, we want the NDIS to work. We want the NDIS to deliver for participants.

What do we want?

We want participants to have more choice and control over the supports they purchase and the providers they work with. We want the NDIS to be safer for participants. We want the NDIS to be sustainable. We want the NDIS to be cost-effective for participants and taxpayers. We want to stamp out abuse, fraud and other criminal, unethical and bad behaviours. We want more innovation, competition, and investment to increase productivity, service quality, value for money, and options for participants.

What do we not want?

We don’t want to return to the bad old days of pre-NDIS block funding with no participant choice or control. We don’t want market failure caused by a lack of providers. We don’t want anti-competitive behaviours or markets dominated by a few big providers. We don’t want more thin markets or market failures. We don’t want to drive quality providers out of business with increased compliance costs that are disproportionate to the risks or the size of their activities.  

We’re arguing with each other about the wrong things, based on wrong assumptions

In the wider provider sector, too much time and energy is expended arguing about the pros and cons of registered versus unregistered NDIS providers, and their eligibility to deliver different support types to participants. Generalisations infect the debate on both sides. 

Despite the work of the NDIS Provider and Worker Registration Taskforce to allay concerns, some providers assume that mandatory registration will mean the imposition of expensive quality compliance processes and external audits on all providers. Some assume that participants want to work only with registered providers; or that unregistered providers are unregulated cowboys and girls; or that the services of registered providers are guaranteed to be safer and of higher quality than the services of unregistered providers. All these assumptions are false.

Key points we need to communicate better to participants, the Government, and taxpayers 

  • Allied health providers are a diverse bunch. Some of us are big, multidisciplinary, multisite practices, and some of us are part-time sole traders offering mobile services. Some of us are 100% disability-focused, while others provide services to participants and people without disabilities. Some of us work in clinics, while others work in participants’ homes, in schools, workplaces, and a whole range of community and other settings.  
  • Allied health professionals are already well-regulated. For example:
    • Practising physiotherapists, occupational therapists and psychologists are regulated by the Australian Health Practitioner Regulation Agency (AHPRA) in partnership with each profession’s National Board and are subject to AHPRA standards.
    • Certified practising speech pathologists, dietitians, exercise and sports science practitioners, and audiologists are regulated by their professional peak bodies who, themselves, are members of the National Alliance of Self Regulating Health Practitioners (NASRHP), and therefore subject to NASRHP standards closely modelled on AHPRA standards.
    • All these allied health professionals are subject to standards on scope (areas) of practice, codes of ethics/practice and/or professional conduct, complaints procedures, competency standards, course accreditation, continuing professional development, English language requirements, mandatory declarations, professional indemnity insurance, practitioner certification and recency and resumption of practice requirements. 
  • All allied health providers delivering NDIS-funded services are regulated by the NDIS Quality and Safeguards Commission to some degree:
    • Some allied health providers are registered with the NDIS Quality and Safeguards Commission, including some of the larger providers, and providers who provide behavioural supports and/or use (high risk) restrictive practices. Among other things, registration involves providers implementing quality compliance processes to meet NDIS Practice standards and undertaking regular external audits. (In practice, it is time consuming and expensive for providers to get and maintain registration.)
    • Some allied health providers are not registered with the NDIS Quality and Safeguards Commission, including many sole traders, other small providers, and providers who offer their services to both NDIS participants and other clients, and/or service mixes that include disability specific services and other services. These providers are often referred to as “unregistered providers”. However, they are subject to the NDIS Code of Conduct and can be fined and banned by the regulator. 
  • Many participants prefer to work with (generally smaller) unregistered allied health providers or a mix of providers. For example, Professor Helen Dickinson and her colleagues found that many of their interviewed participants spent funds on allied health services and that, “while many allied health providers and therapists are not NDIS registered, these providers typically hold registration or accreditation with their appropriate professional bodies…[and] that NDIS registration would not provide any additional level of safety or quality”.

Best world outcomes

If things go well, we’ll end up with: 

  • a proportionate and graduated regulatory system that takes into account the diversity of allied health provider businesses and services and their existing regulatory frameworks;
  • clear rules that don’t conflict with or duplicate existing rules;
  • a minimum of red tape so we can focus our limited time and resources on service delivery to participants and improving quality;
  • clear communication of the rules to everyone affected;
  • external monitoring of compliance with rules;
  • enforcement when noncompliance is identified; 
  • proper adjudication of disputes about regulator decisions;
  • sanctions for non-compliance; and
  • continuous evaluation and adjustment of the regulatory system as things change. 

Final thoughts

For many allied health providers, the real debate is not about mandatory registration, but about what ‘registration’ will actually mean under the new rules for different allied health providers. To make decisions about the future of our businesses and disability services, we need to know how much it will cost to comply with new rules, how long it will take to obtain registration (whatever that means for a given provider), and how much time (and how many management and worker resources) will be needed to maintain it. An important open question is whether, under the new system, price limit controls will extend to services purchased by self-managed participants. 

The devil will be found in the details. If the government gets this wrong, we’ll see an exodus of allied health providers from the sector, reducing participant choice and control over who they work with for their supports.  

Allied health providers should engage with participants to ensure this doesn’t happen.

Breaking (potentially good) news update

As so often happens, immediately after publishing this article, the NDIS Provider and Worker Registration Taskforce published its Advice. While this will take some time to read through in detail, a quick read of the registration recommendations looks promising for allied health providers:

  • For AHPRA-registered allied health professionals (such as physiotherapists and occupational therapists), the Taskforce has recommended that the registration by AHPRA be recognised as registration for the purposes of NDIS where this can be achieved. (This recommendation is in relation to registration only and does not apply to worker screening.)
  • For self-regulated allied health professions whose peak bodies are members of NASRHP (such as speech pathologists and dietitians), the Taskforce has recommended “consideration be given to the appropriateness of extending a recognition of those registration schemes to self-regulating allied health professionals, noting that any such assessment would need to consider the requirements of the self-regulated environment and other relevant matters”. Again, this recommendation is in relation to registration only and does not apply to worker screening.

If this advice is accepted, it has the potential to considerably reduce the regulatory burden associated with reporting to two regulators (e.g. the NDIS Commission and AHPRA/peak bodies) and to streamline the process for practitioners. As the Taskforce notes, “it would remove the main barrier to registration which has been raised with the Taskforce by allied health practitioners who are currently not registered NDIS providers”.

But, of course, a lot will depend on specifics, and the Government’s response to the recommendations.

Blood from a stone: What allied health NDIS providers can do to improve their lot

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Allied health providers in the NDIS space are struggling. Some are reducing or ceasing work with NDIS participants; and others are shutting down. Stress across the sector is palpable.

Costs increase, but NDIS price limits remain frozen. Governments tell us to do more with less, but the head of our Productivity Commission appears to think that it will always be difficult to increase our productivity because we are labour intensive, and that we’re a drag on Australia’s overall economic growth. In the press, and on social media, ethical providers continue to be lumped together with providers alleged to have ripped off participants and/or underpaid workers. 

It’s grim. 

I’m a realist. Like Joseph Tussman, I think that everything in life is easier to navigate if you identify how the world really works and then align with those realities. Fair or not, the pricing decision is a reality. Inflation is a reality. Anti-provider sentiment from influential voices in government and the media is a reality. Ongoing uncertainties about NDIS sustainability, regulation, and reforms are realities, and will remain that way for some time yet.   

So what can we do to keep going? 

There is no magic bullet. But, to get some perspective and ideas from outside the industry, I’ve been reading research and white papers. This week, Working Future: The Australian Government’s White Paper on Jobs and Opportunities, caught my eye. 

I learned some useful things:

  • Economy-wide productivity growth is slowing: Since the mid-2000s, productivity growth has slowed in Australia. Australian businesses – especially in the services sector – have been slower to adopt new technologies and processes than businesses overseas. This is a big challenge if we want to maintain wages and living standards. 
  • Our sector is growing: Our sector – the care and support economy – is expected to grow by 22% by 2033. The sector includes the work of child carers, child care centre managers, early childhood educators, education aides, welfare support workers, personal care workers, nursing support, diversional therapists, enrolled and mothercraft nurses, Indigenous health workers, social professionals, registered nurses, nutritional professionals, occupational therapists, physiotherapists, podiatrists, audiologists, speech pathologists, nurse managers, and health and welfare service managers.
  • We employ a lot of people: The healthcare and social assistance economy is the fastest growing part of the labour market. We represent about 10% of Australia’s workforce, and this growth is expected to continue.  
  • Our sector needs to improve its employment practices: Across the care sector, staff turnover is too high, probably due to a range of factors including uneven service quality, pay (including gendered undervaluation of work in female-dominated industries where women make up 76.5% of the workforce), work conditions in some settings, relatively high rates of casual employees (28%), too many workers working multiple jobs, and unclear career progression opportunities. 
  • Our sector needs to improve its training practices: Healthcare and social assistance have the highest prevalence of workplace training in the economy, probably because ongoing training is required as part of occupational accreditation. However, time and financial constraints are barriers to quality training for both providers and workers. Some providers are ambivalent about investing in staff skills and training because of high worker turnover. (This is short-sighted, to say the least.)
  • Our workers have other options: Within the sector, different providers demand similar skills and compete for the same workers. But different sub-sectors (e.g, childcare, health, the NDIS, aged care, veterans’ care) are accessed, funded and regulated differently. If one sub-sector becomes dysfunctional or uneconomic, many of our workers have other options – in and outside the sector. So, too, do many providers.

Clear-eyed choices 

If we accept these realities – and we must – providers have three main options:

  1. Shut down NDIS activities altogether and do something more (economically) productive – whether in the sector or elsewhere. (This would not be a good outcome for NDIS participants, especially in rural and remote areas.) 
  2. Reduce NDIS work and work more with other client groups not subject to price controls to offset the losses made on NDIS-funded work.
  3. Stay focused on NDIS-funded work and become more productive to re-establish margins and stay in business. 

If we choose options 2 or 3, we need to raise our productivity. But, given all the constraints, how?

Ideas

In the White Paper, the Government makes a number of suggestions for employers to ‘reignite’ productivity, including that we:

  • increase our management capabilities (currently relatively limited on average, compared to US firms, for example);
  • adopt “innovative work practices…better models of care and support and best practice processes and techniques”;
  • invest more in people and technology to change our models of care and to increase our clients’ choice and control and access to support, including in regional areas with thin markets (e.g. through telehealth);
  • improve our mixes of staff, qualifications and skills;
  • make more efficient use of existing resources by allowing staff to deliver multidisciplinary care;
  • train workers to use robots, automation tech and/or AI to allow workers to focus on higher value activities (e.g., problem-solving, interpersonal and non-routine tasks), and to access and process information, complete mod-level professional writing tasks, make decisions, and undertake admin tasks more efficiently; and
  • accept that ‘firm exits’ (i.e. businesses shutting down) are something that is necessary and perhaps (from the Government’s perspective) desirable to free up workers and capital to move to more productive businesses. 

Many of these suggestions lack specificity. Almost all require investment and additional risk-taking, which is hard to stomach in the current economic environment.

It’s clear from the White Paper that the Federal Government knows that it’s always been difficult to achieve productivity gains in our sector. If we want to improve provider productivity across the system, we need the Government to step up, too, to revisit policy settings on training, occupational licensing, skilled migration, and ‘knowledge translation’ collaborations between businesses, universities and government institutions. We need regulatory certainty (something sorely lacking at present) and harmonisation across sectors and States to resolve inconsistent rules, reduce red tape and admin busy work, and remove barriers to worker mobility (e.g. by consolidating worker screening regimes). 

The NDIS and the care and support sector as a whole are complex adaptive systems. They are made up of individuals who have freedom to act in ways that are not always totally predictable. The actions of governments, regulators, providers, workers and NDIS participants are interconnected: one group’s actions can change the system for everyone else, potentially in unexpected ways.

Bottom line

Ethical providers need to do something if we want to continue to provide high level care to NDIS participants while investing in our workers and staying in business. 

We need all the good ideas we can get.

Further reading:

Working Future: The Australian Government’s White Paper on Jobs and Opportunities | Treasury.gov.au

How will allied health NDIS providers survive? Some difficult choices ahead

Therapy Support Providers: Frozen pricing limits and shorter notice cancellation rules. What was the NDIA thinking?

How will allied health NDIS providers survive? Some difficult choices ahead

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If you are a private allied health business owner who works with NDIS participants – you should take a look at the Deloitte Access Economics report about NDIS price limits for therapy supports and the Ability Roundtable 2023-24 Annual Price Review Submission about Therapy Supports.  

Both are harrowing reads for occupational therapists, speech pathologists, physiotherapists, social workers, and other allied health businesses. They suggest that most of the bigger, NDIS-registered allied health therapy businesses operate at – or below – break-even point against NDIS price limits. For the 2024-25 financial year, the Ability Roundtable has projected a median loss (net margin) of -14.2% for larger registered providers of therapy supports.  

For registered and unregistered NDIS providers, the real costs of providing therapy supports to participants are often underestimated, including by many allied health business owners. Costs include:

  1. staff base wages and salary oncosts (e.g. annual leave, personal leave, public holiday leave, long service leave, and parental leave, superannuation, workers compensation insurance); 
  2. costs of supervision, training, professional development, and accreditation;
  3. non-billable (but necessary) activity costs, like non-billable client, travel and cancellation time;
  4. service delivery overheads, including occupancy costs (e.g. rent and electricity), motor vehicle fleet costs, specialised equipment, IT costs (e.g. laptops and software), and client consumables;
  5. non-service level staff costs (e.g. team leader and corporate governance costs);
  6. corporate overheads, e.g., IT, finance, human resources and recruitment, insurance, administration, marketing, quality control, and audit and legal expenses; and
  7. NDIS and other compliance costs. 

From Deloitte’s report, it appears that many of the bigger registered allied health businesses have a major structural business problem: high (and rising) fixed costs, a limited capacity to reduce variable costs without affecting service quality or access, a limited ability to increase staff productivity without increased turnover, and of course no room to move on prices. 

The Government’s decision to freeze NDIS therapy prices for another year increases financial pressures on allied health providers. To stay in business, allied health providers must (at least) break even. But we face several difficult choices and tradeoffs as we try to get there:

  1. We can’t lower wages without losing staff to higher paying opportunities, e.g. in the public sector.
  2. We can’t reduce new graduate and early career hiring and support without affecting the future of our professions (onboarding new graduates and building their caseloads requires significant investment and time, which affects average utilisation rates).
  3. We can’t ask frontline staff to see more clients without increasing staff burnout and turnover.
  4. We can’t cut corners on supervision, education and training without reducing the skills of our workforce and the quality of our therapy services.
  5. We can’t recalibrate staffing levels to match fluctuating client demand patterns (e.g. during school holiday periods) without reducing full-time employees and switching to casuals and contractors and reducing continuity of service to some participants.
  6. We can’t reduce investments in corporate governance controls without increasing business and client risks, including to safety.
  7. We can’t narrow our scope of services (e.g., switching to lower-cost supports or private client work outside the NDIS) without reducing NDIS participant access to our services.

For ethical reasons, many of these options and trade-offs are unacceptable for reputable allied health providers.

In the bleak business environment depicted in the Deloitte and the Ability Roundtable reports, it would be logical for:

  1. more registered NDIS allied health providers to deregister, continuing the trend described in the NDIA’s latest Annual Pricing Review;
  2. some allied health providers to downsize and to cut investments to reduce costs; 
  3. some allied health providers to cease working with participants with complex (higher cost) needs and to reduce (higher cost) in-community services to reduce losses; and 
  4. some allied health providers to pivot their businesses to focus on non-NDIS clients to reduce their exposure to NDIS price controls.

Unless allied health NDIS providers find new ways to increase productivity and to re-establish sustainable margins, we may end up with fewer registered allied health providers, fewer larger allied health employers, uneven levels of supervision, training and support for staff across the professions, and fewer options for some NDIS participants to access quality therapy supports. 

Therapy Support Providers: Frozen pricing limits and shorter notice cancellation rules. What was the NDIA thinking? 

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The 2024-25 NDIS pricing arrangements and price limits (the 2024-25 Pricing Arrangements) were released on 28 June 2024: the last business day of the 2023-24 financial year. 

For therapy support providers – like occupational therapists, behavioural therapists, physiotherapists, and speech pathologists – two things stood out:

  • The 2024-25 price limit for most therapists is unchanged from the previous year. (For most therapy support providers, the pricing limit remains $193.99 an hour. This limit has stood, unchanged, for 5 years.)
  • The short notice cancellation policy has been reduced from seven days to two clear business days.

These changes took effect on 1 July 2024 – the first business day after the 2024-25 Pricing Arrangements were released.  

Why did the NDIA recommend these decisions?

Also on 28 June 2024, the National Disability Insurance Agency (NDIA) released its 2023-24 Annual Pricing Review Report (the Report). Many of us were too focused on the 2024-25 Pricing Arrangements to notice.  

The Report is not well-written or accessible. It looks like it was drafted by a committee.  

We read it anyway. We wanted to understand what the NDIA thinks about therapy support providers. We wanted to understand the context and data used by the NDIA to look at pricing limits and cancellation policies. And we wanted to understand the NDIA’s rationale for making its recommendations. 

The Report refers, briefly, to the 2023 NDIS Review, The Royal Commission into Violence, Abuse, Neglect and Exploitation of People with Disability, and some of the budget papers. It doesn’t refer in any meaningful way to Government reform proposals, including the amendments proposed in the NDIS Amendment (Getting the NDIS Back on Track No. 1) Bill 2024 (the NDIS Bill 2024). But it would be naive to think they did not influence the Report recommendations and the 2024-25 Pricing Arrangements. 

Here are our key takeaways (in bold), with relevant excerpts from the Report (in italics). (As always, any errors of interpretation are our own):

1. Most NDIS participants bought therapy services

    “In the six months to 31 December 2023, 379,296 participants, representing 59% of the total 646,449 active participants, as of 31 December 2023, purchased therapy supports through their plans.”

    2. NDIS participants bought a range of different therapies, including Occupational Therapy, Early Childhood, Behavioural Therapy, Speech Pathology, and Psychology services

      “In the six months to 31 December 2023, participants claimed therapy supports, predominantly from Occupational Therapists ($441.6 million from 214,271 participants), followed by Early Childhood Professionals ($357.9 million from 93,154 participants), Behavioural Therapists ($287.7 million from 53,064 participants), Physiotherapists ($202.2 million from 95,095 participants) and Speech Pathologists ($198.2 million from 109,829 participants).”

      …

      3. The ‘NDIS therapy market’ expanded

        “The NDIS therapy market continues to expand significantly….Notably, payments made to unregistered providers increased by 60%, although registered providers still received the majority of payments – 65% or $1.3 billion of total payments. This demonstrates growth in both the provider base and financial volume within the therapy sector.”

        4. The number of Registered Therapy Providers plummeted

          “Registered provider numbers decreased by 16% from 8,778 to 7,392 providers in the six months to 31 Dec 2023….The decline in registered providers…is attributed to 1,562 providers switching to unregistered status and 1,470 registered providers no longer receiving therapy related payments in the six months to 31 December 2023.” (My emphasis.)

          5. The number of Unregistered Therapy Providers surged

            “Conversely, unregistered providers have risen in all areas, growing from 27,528 to 45,543 in non-remote areas within the same periods….”

            6. The NDIA knows that therapy providers were experiencing high demand and rising costs

              “Data on economic conditions suggest strong demand for health and disability services, a tight labour market for health and disability related workers, as well as higher costs given high general inflation and wage inflation.”

              …

              “High inflationary environment (sic) can increase cost pressures on providers delivering supports to NDIS participants such that these providers may then be under pressure to raise prices for their services….Inflation in the health industry …has run above the economy wide (all-industries) rate for most of the past decade, suggesting relatively strong cost pressures in the HCSA [Healthcare and Social Assistance] sector.”

              7. The NDIA consulted with providers, peak bodies, and professional bodies. The NDIA knows about providers’ challenges and worries, including with financial sustainability, staff recruitment, retention and turnover, administrative and compliance overheads, increased costs of delivering therapy, general business expenses, and costs of delivering supports to children

                “Almost all providers reported increases in costs. Providers highlighted general increases in wage costs in a highly competitive labour market, as well increases in insurances, rent, travel costs, utilities, and other operating expenses. Several providers attributed these increasing costs to reduced profit margins, and expressed concern about their ongoing financial viability as NDIS providers. Many providers noted that the NDIS price limits have not increased for a number of years.

                …

                Provider peak bodies raised similar themes about challenging economic conditions where costs have increased, and profitability is reduced. Respondents noted that these challenges are likely to impact the quality of services offered by providers, with less investment in staff training and other quality-enhancing initiatives. It was also noted that many businesses are operating at a loss, which may lead to market exits.

                …

                Professional bodies also reported rising costs and financial pressures. It was noted that some providers who previously charged below the NDIS price limits, are now increasing their prices up to the price limits. Professional bodies reported instances where providers are considering moving to self-managed participants so they can charge above the price limits to cover their costs. A professional body reported that many providers are conscious of the impact of a challenging economic environment on participants and have sought to minimise any price increases by bearing the cost themselves.

                …

                Financial sustainability was identified as the primary business risk by 64% of provider responses. This was raised when responding to questions about changing economic conditions.

                Providers also raised challenges with staff recruitment and retention as a key business risk. Providers reported a shortage of practitioners, increasing wage costs and challenges with retaining staff due to competition from other sectors, as well as staff leaving to become unregistered sole-trader providers…

                Providers also raised a wide range of other themes, including risks arising from the amount of time spent on NDIS administrative tasks, registration costs and uncertainty about ongoing reforms to the NDIS.

                …

                Peak bodies raised concerns about the costs of NDIS registration and noted that some members report considering de-registering.

                Similarly, professional bodies also stated the administrative burden of NDIS registration as a business risk, as well as financial sustainability and uncertainty about broader changes within the NDIS. Professional burnout and delays in receiving payment for services relating to assistive technology were also raised as business risks.

                High staff turnover was reported in many submissions, as well as broader challenges with recruitment and retention. Several providers reported an operating environment where staff leave to become independent/sole-trader providers or take up work in other sectors where they may receive higher wages. A number of providers reported increasing costs associated with salaries and wages to retain staff, or additional costs associated with recruitment (e.g. advertising and recruitment agency costs).

                …

                About 87% of provider submissions reported increases in the costs of delivering therapy supports and services. Providers noted increases in wage costs (including increasing staff wages, keeping up with Allied Health awards and professional development costs) and costs associated with recruitment and retention. Providers also reported increases in business expenses such as rent, utilities, office supplies, insurance, workers compensation premiums and travel expenses.

                Allied Health Professions Australia described rising business costs (e.g. wage market rates, rent and utilities, supplies, fuel, consumables and equipment, travel, insurance and other operational expenses).

                …

                Providers outlined a range of unique costs of providing early childhood supports, with 85 (or 33%) of provider submissions responding to this question. Most providers describe this group of NDIS participants as more complex, compared to other early childhood clients who are not eligible for supports under the NDIS.

                When describing early childhood supports for NDIS participants as more intensive and requiring more time, the following additional activities and costs were noted:

                • collaboration and liaison as part of team-based approaches, with an appointed ‘Key Worker’ 

                • delivering supports in natural environments, such as at home or in school settings, which requires travel that can exceeds established caps

                • specialist skills and professional development needs, often resulting in a need to pay higher salaries

                • mandatory reporting obligations, such as writing reports related to funding allocation decisions, risk assessments, reporting to the NDIS Safeguards Commission and making Child Safe notifications.

                Professional bodies noted similar costs of providing early childhood supports for NDIS participants. For example, the Australian Physiotherapy Association described liaison and communication with the care network, support to the family, the expertise and complexity required, extended appointments, the service environment and administrative load.“

                8. The NDIA appears to believe that, as health care businesses, Therapy Support Providers are resistant to slowdowns in the economy

                  “The HCSA sector is resilient to slowdowns in Australian economic activity due to the ‘non-discretionary’ nature of the services provided (generally necessities) and continued demand from population growth and an ageing population. The HCSA is also heavily reliant on funding from the public sector.”

                  9. The NDIA accepts that its private billing data – gathered by scraping provider websites for public pricing information – was limited and unrepresentative. (Many providers don’t post pricing information publicly for business and legal reasons, e.g. to avoid illegal price signalling.)

                    “The analysis of private billing rates for NDIS-related weekday in-room therapy services in the 2023-24 period offers detailed insights into the therapy market. The dataset, consisting of 1,791 observations, was compiled by the NDIA from provider websites across Australia. This sample size is derived from previous annual pricing reviews, ensuring continuity and comparability over time.

                    …

                    The distribution of sample observations geographically leaned more towards VIC, 34% of the sample, and QLD, with 27%, indicating an underrepresentation of therapists from NSW, which accounted for only 20%, compared to its share of the NDIS market (31% of total NDIS therapy claims in the six months to December 2023). The NT was the only state or territory with fewer than 30 observations. (My emphasis.)

                    The NDIA acknowledges that there are many uncaptured variables that would assist a greater explanation of private billing rates. This, however, is difficult to obtain through website scrapping (sic) alone.” (My emphasis.)

                    10. Notwithstanding the limits of its analysis, the NDIA concluded the price limits ($193.99 per hour in most regions) reflect market norms and there are no systemic pricing concerns that hinder participant access (compared to other clients)

                      “Overall, the private billing rates analysis provides a crucial benchmarking tool for the NDIA, helping to align NDIS pricing structures with the market and ensuring the sustainability of therapy services under the scheme. This analysis indicates that NDIS price limits generally match or exceed the rates for most therapies nationwide. However, regression analysis highlights statistically significant variances among therapies, which could correspond to differences among therapy professionals such as in qualifications, skills, and experience.“

                      11. The NDIA think that psychologists are an exception to the general rule to freeze prices because their market rates (based on private billing rates) exceeded then-current pricing limits

                        “After reviewing the current price limits for Psychologists against private billing rates and other comparable government schemes, it is apparent that the current limits generally sit below the prevailing market rates.”

                        “Analysis reveals that the mean billing rate for psychologists exceeds the NDIS price limits in both state groupings, with a mean rate of $228.6 and $260.3 for Psychologists and Clinical Psychologists, respectively. Similarly, median billing rates for these professionals surpass NDIS limits, standing at $228.0 and $255.0. Moreover, the 75th percentile billing rates indicate that a significant portion of appointments exceed (sic) NDIS price limits, highlighting a clear difference between market rates and NDIS price limits. This suggests that it is appropriate for the NDIS to increase price limits to better align with prevailing market rates and ensure fair compensation for psychology services.”

                        12. The NDIA recognises that its pricing model may underestimate real world business costs and that a new price-setting approach may be needed

                          “Stakeholder feedback has suggested a potential underestimation of corporate and operational overheads, such as insurance and compliance costs given the model is currently based on previous benchmarking survey results. The feedback received through the APR consultation and ministerial correspondence, has raised concerns that the current price limits may not fully accommodate the delivery of more specialised and complex supports for some NDIS participants, which may restrict providers’ ability to recover adequate costs.”

                          “The NDIA should work with the sector, providers, and other stakeholders to consider options for setting prices for Disability Supports, including but not limited to exploration of a new pricing approach.“

                          13. NDIS cancellation costs surged, including for early childhood supports

                            “In the three years from 2020-21 to 2022-23, the costs linked to short notice cancellations nearly doubled, increasing from about $60 million to just under $120 million. This rise highlights the need for effective management of such cancellations. Additionally, therapeutic, and early childhood supports, which account for 37% of all claims, are identified as the categories most affected by cancellations.”

                            14. The NDIA thinks that providers have the right to recoup costs for cancellations but wants them to work harder to reduce the number cancellations. The NDIA thinks 2 clear business days’ notice is sufficient for therapy supports 

                              “The NDIA recognises that there is a need to strike a balance in its short-notice cancellation policy to allow providers sufficient ability to recover costs while incentivising them to work with participants to reduce the number of short-notice cancellations. Participants, in turn, must be given reasonable period to provide notice, considering unforeseen circumstances like illness, urgent appointments, or changes in personal circumstances, to minimise using NDIS funds on services they do not receive.

                              …

                              Through consultation and research conducted, there is a case that the maximum of 7-day policy may not be necessary for non-DSW supports. There appears to be a greater usage of a 2-day cancellation policy in the sector, particularly among therapy providers, which supports a potential for a shorter cancellation policy. 76% of provider respondents delivering therapy supports to NDIS participants suggest they already have a short-notice cancellation policy of 48 hours or less. This is also supported by the website data analysis conducted by the NDIA, acknowledging the limited sample that had available data for analysis. The NDIA believes there to be mechanisms and methods already being utilised by the sector to assist participants limiting cancellations, which could make the reduction in notice period feasible.”

                              Our view: One reasonable conclusion

                              We have no qualms about the cancellation notice changes. Many therapists already have more generous cancellation arrangements than were allowed under the old rules. 

                              The decision to freeze pricing limits for most therapy supports in a period of relatively high inflation and business uncertainty was not an accident. Neither was the late timing of the announcement.  

                              The Government is attempting the very tough task of balancing the rights and interests of participants and taxpayers. Therapy providers are trapped in the middle, facing rising business and compliance costs, downward pricing pressures (in real terms), and forecasts of falling demand for some therapy services (as NDIS access and funding rules are expected to tighten as a consequence of the NDIS Bill 2024). 

                              Therapy professionals, peak bodies, and professional associations have all expended a lot of effort to explain their challenges, to little avail. In coming months, many ethical therapy providers will need to make some tough decisions about their ongoing capacity to deliver high quality, evidence-based therapy supports to participants without going bust.

                              NDIS Providers: 5 basic things to know about the NDIS (Getting the NDIS Back on Track No. 1) Bill 2024

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                              With today’s news, we don’t yet know the final form of the NDIS (Getting the NDIS Back on Track No.1) Bill 2024 or when it will be passed into law.

                              But, despite the uncertainty and lack of detail on many key points, NDIS providers (including unregistered providers) need to understand some basic concepts to prepare for the big changes ahead:

                              • Providers should expect increased regulation, oversight, and enforcement action. The NDIS Quality and Safeguards Commission and the NDIS Commissioner will have expanded powers.
                              • NDIS access rules will be clarified so that participants know whether they meet the disability requirements, the early intervention requirements, or both.
                              • NDIS pathways will change. The NDIS will work differently for participants accessing early intervention supports compared with participants receiving disability supports for lifelong disabilities. (Future reforms will create a new early intervention pathway.)
                              • Significant changes to NDIS supports, assessments, reports, and budgets:
                                • “NDIS Supports” will replace “reasonable and necessary supports”, narrowing supports that will be funded by the NDIS.  
                                • “Needs-based assessments” will replace diagnoses-based assessments, and produce “needs assessment reports”. 
                                • The needs assessment report requirements will be developed in consultation with people with a disability, health and allied health technical professionals and governments. 
                                • The “reasonable and necessary budget” will be determined by the needs assessment report and replace line-by-line “reasonable and necessary supports”.  
                                • Reasonable and necessary budgets will be composed of “stated supports” (fixed budgets for things like assistive technology and supported independent living), “flexible funding” (e.g. for health or rehabilitations services), or both.
                              • Provider boards and senior management must understand their NDIS compliance obligations and work with participants and others to improve their governance and leadership practices to enhance safety, quality, accountability, and responses to risk.

                              With thanks to the presenters at the Legalwise Seminars’ NDIS Law Intensive on 20 June 2024.

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