Higher NDIS prices for providers

In July 2019, the NDIA introduced the Temporary Transformation Payment (TTP) for providers of Assistance with Daily Living and Community Participation. The payment is only available to registered providers and is conditional to a set of obligations. The increase was welcomed by providers who continue to struggle financially with the administrative burden of the NDIS and the introduction of the Quality and Safeguard regulations and the associated compliance and audit requirements.

In a national survey among 381 disability service providers, 76% of organisations stated that they are worried that they won’t be able to provide NDIS services at current prices (NDS 2019). The TTP payment is set at 7.5% above the base price, however given the previous Temporary Support for Overheads of 2.5% was removed, it is merely a 5% incentive and this will reduce by 1.5% each year.

The excitement over the interim TTP has long settled. Participants’ plans that were already in place in July 2019 were indexed to accommodate for the higher prices. New plans however no longer accommodate for the higher option. Providers can charge the higher prices, however participants need to give up some of their support hours.

The impact of the TTP

Providers feel reluctant and guilty for charging the higher prices, and some participants are accusing registered providers of being greedy. Providers are rightly concerned that customers will miss out on much needed support. The price difference has started to impact on the customer relationship and providers fear losing their clients to unregistered providers. The TTP payment has created a competitive advantage for providers (registered or not) who are not charging the higher price.

But at what cost?

If prices don’t cover costs, providers will be forced to pay minimum wages and save on staff training, supervision and quality systems. Worst case, providers drop their NDIS registration and continue services only to NDIS participants who are privileged to self-manage their funds or have opted for plan management. The supply gap will become even bigger – especially in thin markets.

Learnings from the Royal Commission

The interim report of the Royal Commission into Aged Care Quality and Safety (31 October 2019) tells a shocking tale of neglect and has found that the aged care system fails to meet the needs of vulnerable citizens. The report uncovers substandard care, unsafe practices and identifies a system that:

  • is designed around transactions, not relationships or care
  • relies on a regulatory model that does not provide transparency or incentives to improve
  • has a workforce that is under pressure, underpaid, undervalued and insufficiently trained.

This presents some strong learnings for the NDIS and the disability sector. The disability, as well as the aged care sector, require ongoing incentives to improve. Providers that register with the Quality and Safeguards Commission, implement quality systems, train and supervise staff and undergo regular audits, need the necessary funds and rewards to persevere. Participants who choose services from registered providers should be better and not worse off. Customer relationships must be built on genuine customer concern and care and not price point, service agreement negotiations and payment gaps. The workforce needs to be paid well, trained, valued and able to pursue their role as a long term career.

The Minister for the NDIS, Stuart Robert has announced a list of six core improvements to the NDIS. A 2019 review of the NDIS Act and the new NDIS Participant Service Guarantee is also underway.

NDIS Price review consultation

On 22 November the NDIA released an Annual Price Review 2020-21 Issues paper which considers:

  • ways to increase plan flexibility and reduce the administrative burden for providers
  • suggestions to improve the pricing framework, the NDIS Price guide and Support Catalogue
  • price limits for 1:1 core supports
  • group based supports
  • capacity building supports
  • plan management supports
  • regional, remote and very remote areas
  • provider claiming.

Participants, families and providers are invited to have their say on the NDIS pricing matter by submitting their feedback by 2 February 2020 to APR@ndis.gov.au. Providers are encouraged to include additional information in their submission, such as the nature of their organisation, the types and location of services, number of customers and staff. The NDIA is also planning to consult with industry, community and government stakeholders. A draft report will be published in early 2020 with the opportunity for further feedback.

We hope to read that the NDIA will commit to higher payments to registered providers. Should the gap be paid from individual participants’ plans?

No way!

Service providers should compete on quality, genuine care and relationship and not price.

For comments or questions, please contact Ellen:

Dr Ellen Schuler 
Business Consultant
Email: eschuler@cbb.com.au
Phone: 1300 284 364