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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.

                              Do I need a diagnosis to get access to the NDIS?

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                              We get asked this question a lot.

                              From a legal perspective, the answer is “no”. 

                              The Federal Court of Australia – most recently in an important case called National Disability Insurance Agency v Davis [2022] FCA 102 (the Davis case) – has been very clear:

                              • The NDIS Act does not focus on the name of a person’s disability, nor the diagnosis given to a person. 
                              • The NDIS Act is not concerned with what caused a person’s disability. 

                              Instead, the NDIS Act requires the National Disability Insurance Agency (NDIA) to look at impairments experienced by a person that may require ‘supports’ so that the person can participate in personal and community life. Anyone who meets the access criteria in the NDIS Act can be a participant – regardless of diagnosis, and regardless of whether their disability came about by birth, disease, injury or accident.

                              So why is everyone so focused on labels and diagnoses? 

                              An important question. To answer it, we’ll look, first, at early intervention; and then NDIS access, generally.

                              1. NDIS access for children under 7 years of age

                              In a previous article, we looked in detail at some practical issues facing families when trying to access early intervention supports funded by the NDIS. As a matter of law, it’s clear that you don’t need a formal diagnosis for your young child to access supports from the NDIS, a fact acknowledged by the NDIA.

                              However:

                              • In clinical practice, we’ve observed that families who can afford to pay for formal assessments confirming certain types of diagnoses seem to have a much easier time accessing support from the NDIS than others. More specifically, the system seems to favour:
                                • families who live in big cities with access to health professionals;
                                • educated parents/carers who understand ‘the system’, can advocate for a diagnosis when interacting with health professionals;
                                • wealthy parents/carers who can afford to pay one or more private medical professionals to write formal reports and/or who have the resources to challenge NDIA decisions (e.g. before the Administrative Appeals Tribunal or Federal Court of Australia); and 
                                • people who speak English as their first language. 

                              This has contributed to what some commentators call a ‘two-tier access system’. It’s fundamentally unfair. The NDIA and the responsible Minister are both aware of the problem and are trying to fix it. But it’s the reality right now. 

                              Good intentions, weird incentives, and unfair outcomes 

                              The NDIS guidelines and lists were no doubt intended to save families of children with significant, lifetime disabilities from having to jump through administrative hoops to qualify for clearly-warranted help. But, in practice, the lists have had unintended consequences. Inconsistently with the purpose of the NDIS Act:

                              • many families, planners, providers, and stakeholders focus their time, money, and energy on medical assessments and diagnoses instead of on the functional needs and participation of children with developmental delays and disabilities;
                              • the system creates a strong incentive for families to seek specific diagnoses of conditions that result in easier or automatic access to the NDIS, even if this involves some ‘diagnosis shopping’; and
                              • some children who meet the legal requirements to become NDIS participants miss out on support because of bad advice and mistaken beliefs that they don’t have the ‘right’ diagnosis or label and are therefore ineligible.

                              Anecdotally, we’ve heard reports of some parents consulting up to five paediatricians to obtain a diagnosis of Level 2 or Level 3 autism for their child. This type of behaviour:

                              • is not an option available to most families for financial reasons;
                              • is a terrible waste of limited healthcare system resources in a system beset with long waitlists for paediatricians and other health professionals; and 
                              • only makes sense in the context of the preferential access to NDIS funding that comes with the diagnosis.

                              2. NDIS access for children aged 7 years or older, teenagers, young adults, and adults

                              A. ‘Does my diagnosis qualify for NDIS access?’ is the wrong question

                              The idea that diagnosis should determine access to the NDIS is misguided. It’s legally incorrect. But it continues to dominate mainstream and social media commentary on the NDIS.

                              NDIS Guidelines have contributed to the confusion. The NDIA’s list of conditions that it deems likely to meet the disability requirements for access to the NDIS includes moderate, severe and profound intellectual disability, and Level 2 and Level 3 autism. Of course, most people with these conditions and/or the other conditions on the list should be entitled to NDIS support. But it’s understandable that people with other diagnoses and conditions would like to be added to ‘the list’.

                              Recently, we’ve seen a public debate about whether adults with ADHD should be able to access the NDIS. We’ve also seen well-intentioned disability and other advocates fighting for people with ‘their diagnosis’ to be ‘granted access’ to the NDIS, including advocates for adults with language disorders. Again, this is understandable in the current system – especially given that intellectual disability, autism, ADHD and language disorders are all subtypes of neurodevelopmental disorders (NDDs) that are known to have negative effects on people’s participation and functioning. It seems arbitrary to include some NDDs and not others – particularly in cases where they lead to similar functional impairments. 

                              The diagnosis debate is understandable, but harmful to the NDIS and people with disabilities. All the ‘noise’ about diagnosis-based access feeds into the unhelpful narrative about NDIS cost ‘blowouts’ and ‘unsustainability’. It obscures the great news about how transformative the NDIS is for many participants. It confuses potential participants, providers and taxpayers about who is entitled to access the NDIS, and why.

                              To counter some of this noise and confusion, let’s take look at the legal tests for access: 

                              B. NDIS access basics – the three requirements

                              To become an NDIS participant as a person aged 7 years or older, you need to meet the “access criteria” set out in the National Disability Insurance Scheme Act 2013 (Cth) (the NDIS Act).

                              Section 21 of the NDIS Act sets out the main rules. There are three kinds of requirements for access to the NDIS:

                              • Age requirements. You need to be under 65 years of age when you make an access request to become a participant (see section 22); and
                              • Residence requirements. You need to:
                                • reside in Australia; AND 
                                • be an Australian citizen, a holder of a permanent visa, OR a protected special category visa holder (section 23); and 
                              • Disability requirements. These are set out in section 24, which is sometimes referred to as the “threshold provision”.

                              C. Disability requirements: commonly disputed issues

                              Often, the main issue for potential participants is whether they meet the disability requirements. 

                              The disability requirements are complicated, cumulative, and include a number of separate requirements that must be met before a person can become an NDIS participant (participant). You can read them in full here.

                              Common issues in disputes between the NDIA and applicants include whether the person:

                              • has a disability that is attributable to one or more intellectual, cognitive, neurological, sensory, or physical impairments;
                              • has impairments that are likely to be “permanent”;
                              • has impairments that result in “substantially reduced functional capacity” to undertake one or more of the six activities set out in section 24(1)(c) of the Act, namely:
                                • communication;
                                • social interaction;
                                • learning;
                                • mobility;
                                • self-care; and/or
                                • self-management; 
                              • has impairments that affect the person’s capacity for social or economic participation; and
                              • is likely to require support from the NDIS for the person’s lifetime.

                              D. What do the Courts say about access to the NDIS? 

                              In the Davis case, Justice Debra Mortimer considered the disability requirements in detail*. She made several important observations and comments about the disability requirements and NDIS access, generally. These comments are helpful for understanding who should get access to the NDIS, and why. 

                              Our key takeaways, paraphrased from Davis, are as follows:

                              • The NDIS is focused on assisting people with disability to live with dignity, with as much autonomy as possible, and with the ability to enjoy access to community and social engagement commensurate with people who do not live with disabilities. 
                              • The NDIS is not means tested. Access doesn’t depend on how much money you or your family have (or don’t have).
                              • Not everyone with a disability gets access to the NDIS.
                                • The scheme is directed at providing lifelong support to people with enduring needs.
                                • Access to the NDIS is reserved for a subcategory of people with disabilities and is determined by the access criteria. 
                                • There are many people with disabilities who will not qualify as participants of the NDIS. This was a conscious policy decision, not an accident.
                              • The intention of the NDIS is that, once a person meets the access requirements, the person will (generally) remain supported through their lifetime.
                              • The link between “disability” and “impairment” is not explained in the NDIS Act. The disability requirements revolve around the severity and permanency of the effects of impairments experienced by a person to justify the funding of “reasonable and necessary supports” (as later assessed under the NDIS Act).
                              • The concept of “impairment” enables the assessment of:
                                • the severity and permanency of the person’s condition, and
                                • the effects of that condition through:
                                  • evidence of the person; and
                                  • medical and clinical evidence.
                              • The assessment of the severity and permanency of the person’s condition and its effects should focus on the effects of impairments on a person’s functioning. The assessment must be functional, practical and detailed. The assessment must be focused on what a person can and cannot do.
                              • In clinical practice and litigation, people sometimes use the terms “impairment”, “disability”, “condition” and “diagnosis” interchangeably. But, for the purposes of the disability requirements, these terms are not synonyms. For example:
                                • the focus of the disability requirements is whether a person has one or more impairments, and whether those impairments are permanent (i.e. enduring); and
                                • whether a person’s disability is attributable to those impairments.
                              • The NDIS Act does not focus on the name of a person’s disability, nor the diagnosis given to a person. Instead, the Act focuses on identifying the impairments experienced by a person that may require supports so that the person can participate in all aspects of personal and community life. 

                              5.4 An impairment is, or is likely to be, permanent (see paragraph 5.l(b)) only if there are no known, available and appropriate evidence-based clinical, medical or other treatments that would be likely to remedy the impairment. 

                              5.5 An impairment may be permanent notwithstanding that the severity of its impact on the functional capacity of the person may fluctuate or there are prospects that the severity of the impact of the impairment on the person’s functional capacity, including their psychosocial functioning, may improve. 

                              5.6 An impairment may require medical treatment and review before a determination can be made about whether the impairment is permanent or likely to be permanent. The impairment is, or is likely to be, permanent only if the impairment does not require further medical treatment or review in order for its permanency or likely permanency to be demonstrated (even though the impairment may continue to be treated and reviewed after this has been demonstrated). 

                              5.7 If an impairment is of a degenerative nature, the impairment is, or is likely to be, permanent if medical or other treatment would not, or would be unlikely to, improve the condition. 

                              • The term “permanent”, for the purposes of the disability requirements, means the impairment or impairments are “enduring” or of an “enduring nature”. It does not mean “irreversible”. It does not mean “cannot be improved”, e.g. with therapy or medicine. The effects of a permanent impairment may fluctuate. 
                              • In other words, the question for the NDIA is whether the impairment(s) experienced by the person has or have an enduring quality so as to require supports funded under the NDIS on an ongoing basis.
                              • The rules about whether an impairment results in substantially reduced functional capacity of the person to undertake one or more of the relevant activities (communication, social interaction, learning, mobility, self-care and/or self-management) are set out in Rule 5.8: 

                              5.8 An impairment results in substantially reduced functional capacity of a person to undertake one or more of the relevant activities-communication, social interaction, learning, mobility, self-care, self-management… if its result is that:

                              (a) the person is unable to participate effectively or completely in the activity, or to perform tasks or actions required to undertake or participate effectively or completely in the activity, without assistive technology, equipment ( other than commonly used items such as glasses) or home modifications; or

                              (b) the person usually requires assistance (including physical assistance, guidance, supervision or prompting) from other people to participate in the activity or to perform tasks or actions required to undertake or participate in the activity; or

                              (c) the person is unable to participate in the activity or to perform tasks or actions required to undertake or participate in the activity, even with assistive technology, equipment, home modifications or assistance from another person.

                              Bottom line

                              Not everyone is entitled to access the NDIS. This is a feature of the scheme, not a bug. 

                              Access rules are essential for the NDIS to work fairly and as intended. But the rules and processes must be transparent, fair, and applied consistently.  

                              The current system includes incentives that are not aligned with the NDIS Act and its policy objectives, and lead to unfair outcomes. Access to the NDIS should not depend on where you live, your family’s cultural and language background or socioeconomic status, your ability to advocate for your rights, or your capacity to understand the rules and to navigate ‘the system’. 

                              Similarly, access should not depend on your diagnosis or label. Instead, access should be assessed by reference to whether you have a disability attributable to enduring impairments that substantially reduce your functional capacity, and capacity for social and economic participation. 

                              Fair access to the NDIS for people with disabilities is far too important an issue for us to get side-tracked on debates about medical diagnoses and labels. As Justice Mortimer noted in Davis, questions about access – and about the operation of the NDIS Act generally – should be approached with a reasonable degree of common sense, given the purpose of the NDIS, and the fact that its operations affect people, families and carers already facing great challenges in their daily lives. 

                              *Justice Mortimer was also the presiding judge in a very important earlier case called Mulligan v NDIA [2015] FCA 544 (Mulligan). Both Davis and Mulligan were appeals from the Administrative Appeals Tribunal (which hears disputes about NDIS access in the first instance).

                              Disclaimer: we have done our best to ensure that this article is correct as at the date of publication (30 November 2022). It may not reflect any changes to the NDIS Act, NDIS rules or guidelines after the date of publication. The article is intended to provide general information and is not legal advice. Formal legal or other advice should be sought for particular circumstances or for matters arising from this article.

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