The NDIS Annual Pricing Review and changes in the NDIS Price Guide 2020-21

The final version of the NDIS Price Guide 2020-21 (Version 1.0) effective from 1 July 2020 has been released. The 102 page document reflects the outcomes of the Annual Price Review. The most significant recommendation in the review is the advice that the NDIS should not increase prices due to the uncertainty of COVID-19. The NDIA should monitor economic conditions carefully and promptly to respond to emerging issues.

The new Price Guide reflects the outcomes of the Fair Work Commission’s annual price increase on minimum wage rates, the ABS consumer price for capital supports and an adjustment of shift loading for casual workers on weekends in line with the SCHADS Award. The temporary 10 percent COVID-19 price loading was removed from the new Price Guide. Support Coordination can still be charged under core supports. This is expected to be removed from the Price Guide by September 2020.

Changes to the Disability Support Cost Model

The price limits for core supports are determined by a formula based on the NDIS Disability Support Worker resourcing model. The review examined the assumptions and parameters of the model and came up with the following adjustments:

  • Decrease of permanent to casual staff to 70%/30% (from 80%/20%)
  • Increase the share of staff assumed to take up their long service leave entitlements to 100%
  • Decrease the assumed workers compensation premium from 3 to 1.7%
  • Increase the assumed overheads percentage to 12%
  • Increase the supervision ratio from 11 to 15
  • Increase the provision of allowances for support workers and supervisors to 1% of salary

Some positive changes, yet we believe the increase in supervision ratio fails to recognise that efficiency needs to be balanced against service quality and safety as well as employee support and satisfaction. The argument that numerous providers manage to be more efficient with a higher supervision ratio indicates a narrow finance focused mindset. The survey has revealed that the average utilisation rate is in fact lower than the model assumptions (average of 79.8% surveyed versus to 92% for standard supports in the model assumptions). The average overhead percentage (as loading on direct care costs) among survey respondents is at 27.7% (in comparison to 12 % in the new model). The changes to the model plus the wage component have resulted in moderate price increases. The price for a standard weekday support has increased from $52.85 to $54.30. Participant plans will be indexed from 1 July 2020 and will be adjusted through a systems update on 11 July. Providers will have to manually adjust service bookings.

Changes to Temporary Transformation Payments

The Temporary Transformation Payment (TTP) was reduced by 1.5 % to 6 % which is no surprise as this was announced when the TTP was introduced. What is new to the TTP is that providers now need to ‘opt in’ or ‘opt out’ of claiming TTP during the 2020-21 financial year. Providers need to inform the NDIA if they are planning to charge TTP by replying to an email they can expect shortly. All other eligibility criteria for charging TTP remain in place and unregistered providers still cannot claim this rate. Plan managers are not responsible for ensuring that providers are TTP compliant however need to be able to inform the NDIA which providers have claimed for TTP and should not pay TTP claims from non-registered providers.

The Annual Price Review assumes that providers who do not charge the TTP have lower costs and are managing to operate at below the current price limits with 40 % of eligible providers choosing not to access the higher TTP prices. We believe that this assumption is lacking evidence. Registered providers are concerned that participants need to give up some of their support hours to pay for services that are charging TTP prices. Some are fearful that they might lose customers if they decide to charge the higher fee. Many more providers would opt for the TTP payment and use the funds to improve their services, systems and workforce capabilities if the NDIS plan funding would be indexed or if the TTP payment would be paid directly to providers.

Cancellation rates

Providers will be able to continue to charge 100% of the service fee when participants cancel at short notice. The increase from 90% was introduced as a response to COVID-19 and this rule is here to stay. The definition of ‘short notice’ however will change back to the pre COVID rules. As of July participants need to give two clear business days’ notice (for supports less than 8 hours and less than $1000) or the provider can claim 100% of the agreed fee if they cannot find alternative billable work.

Modified definitions

Level 1-3

The Level 1-3 high intensity support has led to some confusion in the past and the review has recommended that the new Price Guide clearly links the price limits to skills and experience of the support worker:

Level 1- Social and Community Services Employee level 2 (below the maximum pay point)

Level 2- Social and Community Services Employee level 2 (at the maximum pay point) or level 3

Level 3 – Social and Community Services Employee above level 3

The Price Guide 2020/2021 states that in general level 2 applies to most high intensity supports, however if the worker does not have the skills and experience then level 1 should be applied. In translation this means that if a less skilled and experienced worker provides support to a person who requires high intensity support, then this is still called high intensity support, however it is paid at standard support level. Or in short, if a provider employs less experienced staff and pays less salaries the NDIS will pay less for the support. We recommend that providers who charge at the higher levels should clearly communicate to their customers that they will be looked after by staff with a higher skills and experience.

Time of day, day of week

Providers of assistance with daily activities need to claim based on the time when the support is delivered to the participant. The new Price Guide clarifies definitions to assist providers determine the day of the week and the time of day during which the support was delivered. When a support for a participant crosses shift boundaries and the same worker delivers the support the worker may be paid the higher rate as determined in the Enterprise Bargaining Agreement or Industry Award. In this case, the higher of the relevant price limits applies to the entire support, however the provider must discuss this with the participant in advance.

Establishment fees

In the past only providers of daily personal activities could charge an establishment fee for new NDIS participants in their first plan. This has been extended and now providers of personal care, and participation supports including Specialist Supported Employment, can charge a once-off establishment fee if they are supplying a minimum of 20 hours per a month for three or more consecutive months. Each provider can only claim an establishment fee once across all plans. The establishment fee cannot be greater than an amount equal to ten times the hourly weekday price limits for a disability support worker and is set at $543.00 in 2020/21.

Group based activities

Group based activities in the community and in a centre will now have the same maximum price. This applies for group support under High Intensity Daily Personal Activities (104), Specialised supported employment (133) and Group and Centre Based Activities (136). Providers can charge an extra fee if the support is delivered in the centre to cover capital costs such as maintenance and refurbishments of the centre ($2.15/ per participant). Providers will also be able to claim for non-face-to-face supports as this will no longer be built into the price. This was set at seven minutes (or an additional 12%) for each participant in the previous group charges.

This is a major change as providers no longer use the various worker to participant ratio support items. To claim for a group service providers need to claim against the 1:1 support item by apportioning the time spent with the group among the members of the group. This will eliminate around 200 line items from the support catalogue, however it sounds like a logistical nightmare for providers who now have to apply three line items instead of one. The price guide states that in working out the fee for non-face to face supports it is not appropriate to charge all participants an average fee. This additional fee needs to be worked out for each participant, which appears challenging in the context of group supports. It will be even more challenging to calculate the cost of group support by group number and time spent in the group as CRM systems are currently not set up to calculate costs. The change could provide opportunities for ‘open group’ concepts in centres where participants can roam between groups to choose which activity they would rather do on the day.

Thankfully the NDIS has introduced some interim arrangements and providers will be able to use the old group prices (at the appropriate participant to staff ratio) for the next 12 months. Providers must use the same method for claiming across all group supports. The group rates have been indexed and can be found in the Support Catalogue 2020-21.

Introduction of programs of support

From 1 July 2020 providers are allowed to enter into service agreements for programs of support for assistance with social, economic and community participation, supports in employment, or any capacity building support. The program should work towards the achievement of a specified outcome and run no longer than 12 weeks. Providers must enter into service agreement with each participant who should be able to exit from the agreed program subject to an agreed notice period (maximum of 2 weeks’ notice). This means that participants need to pay if they cancel the attendance of a program, however if they leave the program providers will still be out of pocket. Providers cannot pre-claim for the program however can claim for each instance of support.  Programs of support are listed under group supports in new Price Guide and we assume that the group activity rates apply.

Line item updates

The New Price Guide has re-introduced the following support items: Self-Management Capacity Building, Skills Development and Training, Innovative Community Participation. These were missing from the draft published a few weeks ago.

Plan management

The price review found that capacity building and training in plan administration and financial management support does not function as intended. As of July, Support Coordinators and Plan Managers will be able to charge for travel and non-face to face supports to offer this support more effectively.

Geographic Classification

The pricing review recommends that the NDIA should adopt the Modified Monash Model (MMM) 2019 classification (as released by the Department of Health) to determine prices and travel time limits in remote and very remote areas. The classification in the current and new Price Guide is still based on the MMM 2015 model, plus some reclassified postcodes. The NDIS website announces that this change will be introduced in October 2020. Penneshaw in SA and Carnarvon and Kununurra in WA for example will change from regional (MMM5) to remote (MMM6). Other regions that are impacted are listed here. The review also recognised that higher prices in remote and very remote areas are unlikely to address thin markets and recommends the greater use of commissioning. We are curious and eager to learn how this will look in the future.

Telehealth

The Price Guide draft requested that services provided via telehealth use the price limit that applies to the location of the person delivering the support. The final Price Guide however allows participants in Remote and Very Remote areas to agree on the higher price limits if they are satisfied that the support provides value for money. The higher rate cannot be charged for Non-Face-to-Face Supports or report writing.

Therapy supports

The pricing review as well as the review of NDIS therapy pricing arrangements (2019) found that the NDIS price limits for therapy services seem high compared to other state compensable schemes and may be distorting the market for therapy services. The review recommends that prices for therapy supports should not be indexed in July 2020 and that the NDIA should conduct a comprehensive review as part of the Annual Pricing Review every two years to commence in July 2021.  Some capacity building supports were indexed. Support Coordination and Plan management were increased by 2.1%.

Provider travel

As of July the travel expenses of providers will no longer be regarded as a business overhead. The new Price Guide introduces 37 new line items to charge for Provider travel – non-labour costs. This can be charged in addition to the provider’s travel time and up to $0.85/km (for a vehicle that is not modified) or the costs of other forms of transports and associated costs (up to the full amount).

For example a provider delivering a group support in a centre can charge: provider travel – non-labour costs, provider travel (for the time of travel), support line item (appropriated for the number of participants and for the time of support), non-face to face time and centre capital costs. If the support is not delivered in a centre but involves an outing – the provider can charge for activity based transport instead of the centre capital cost. Thankfully the structure of the new Price Guide will make it much easier for providers to understand what can and cannot be charged for each support, however the quoting for services in advance will be challenging.

The new Price Guide also states that when a worker is travelling in a ‘region’ to provide services to more than one participant, the provider should apportion the travel time between participants (including the return journey if appropriate). The terminology ‘region’ is not explained and we anticipate that this is up to the provider to define regions of support.

Future NDIS Annual Pricing Reviews

The Annual Pricing Review recommends that future reviews should be conducted from July to December each year (commencing in 2021) with changes to take effect from the following July. A welcome change as this would give providers time to understand and review the impact of these changes, to adapt and plan accordingly.

More Price Guide changes

The New Price Guide 2020/21 introduces more changes and new supports that are not discussed in the Annual Price Review. These include

  • Assistive Technology Rental support to facilitate hospital discharge. Two new line items allow participants to rent any assistive technology they need to live at home for up to six months until their assessments and amended plan is in place. This is an interim arrangement until September 2020.
  • Psychosocial Recovery Coaches to offer added supports to participants with a psychosocial disability. This support is provided under the ‘Assistance in Coordinating or Managing Life Stages, Transitions and Supports (Support Coordination)’ registration. Psychosocial recovery coaches require at least a Certificate IV in Mental Health Peer Work or in Mental Health or equivalent training and a minimum two years of experience in mental health related work. Recovery coaches are different from support coordinators as they are expected to bring specialist knowledge and skills in psychosocial recovery and mental health in addition to service navigation. The NDIS will not fund support coordination if a participant receives funding for a recovery coach.
  • Individualised Living Options (ILO)

This is for support to give people access to alternative living arrangements including assistance with the exploration and design of living options (charged on an hourly rate) and funding for the support model (which is a quotable item). The support model funding also includes the costs for monitoring and redesign of the ILO. The NDIS is expected to publish additional information on ILO shortly.

  • Assistance from Live-in Carers is an alternative living support, however needs to be stated in the plan under line item 01_003_017_1_1. The Price Guide does not specify who can classify as a live-in carer. The Price Guide also lists supports for other living arrangements such as a host family or assistance in a shared living arrangement. These supports are also subject to quotation.
  • Supported Independent Living (SIL) will receive a major shakeup, including abandoning the quoting process. The new Price Guide sets hourly prices based on the time and day of the week, and if the person is receiving standard or high intensity support (one level only). The Price Guide does not differentiate between the sizes of the group homes nor specifies a maximum number of residents. The NDIA website states that the NDIA is conducting a review of SIL prices and that new SIL specific price limits will be included in an updated Price Guide later in 2020.

Existing plans containing agreed quotes will continue until the end of their 12 month term. For participant’s NDIS planning meetings, the provider should develop a roster of care to help the NDIA decide the type of supports to be included in the participant’s plan. The NDIA is also working to strengthen participant input into the SIL planning process.

  • Supports in Employment are designed to offer more flexibility to assist participants successfully engage in employment.

Five new line items offer opportunities to deliver support in employment with hourly price limits based on the day of the week and time of supports. Where the support is delivered to a group of participants the provider should claim the relevant fraction of the time for the support from each participant’s plan. ADE providers registered as Specialised Supported Employment providers can use the support items. Alternatively, ADE providers can choose to use the pre July ADE pricing arrangement for up to 18 months.

Employment providers will also be able to claim for transport of participants to and from community based supports and claim non-labour costs associated with provider travel.

For questions, comments or individualised Price Guide support for your organisation contact Ellen.

Dr Ellen Schuler 
Business Consultant
Email: eschuler@cbb.com.au
Phone: 1300 763 505