NDIS Pricing Update

Published 22 December 2018, revised 9 January 2019

The release in March 2018 of the National Disability Insurance Agency (NDIA) response to the Independent Pricing Review, undertaken by McKinsey & Company, raised significant concerns in the allied health sector about changes to the pricing of therapeutic supports.

Since then, the allied health professional associations have worked together closely to advocate with key stakeholders about our concerns and to undertake a broad range of collective and individual activities to constructively engage with the NDIA.

We’re pleased that this work has been effective, first leading to a delay in implementation of the tiered pricing recommendation and now to a new program of consultation and research activities by the NDIA. We acknowledge the work of the NDIA in revisiting many of the assumptions in the original report and their ongoing engagement with our sector.

Updated timeline and approach

The NDIA recently announced its new program of work to investigate the pricing of therapy supports, supported by extensive consultation with the sector as well as additional benchmarking work. We understand the NDIA has determined that a tiered structure based on complexity is not likely to meet the needs of participants and providers. Instead, the NDIA is now seeking to test a pricing structure that reflects the type of therapy service provided as well as geographic considerations.

The intention of this review is to recommend:

  • appropriate price control arrangements for therapy services in the NDIS;
  • options to encourage the development of innovative support offerings by providers of therapy services in the NDIS; and
  • market interventions, other than price limits, that may have positive impacts on the market for therapy services in the NDIS.

This review work has now commenced (December 2018) and aims to deliver recommendations to the NDIA’s Pricing Reference Group in early 2019 with the goal of developing and releasing a draft price list for therapy services in March 2019. The NDIA has indicated there is potential for this timeline to be extended subject to the progress and findings of the review.

Consultation with the allied health sector

The allied health professions met with an NDIA and McKinsey team on December 17th to provide detailed feedback about the challenges and costs associated with providing services under the National Disability Insurance Scheme (NDIS). This is part of a broad range of consultations being undertaken by the NDIA with key providers and peak associations.

The sector was represented by a diverse group of allied health providers including audiologists, dietitians, speech pathologists, music therapists, occupational therapists, orthotist/prosthetists and physiotherapists, all actively delivering services under the NDIS.

It is clear that the Agency are genuinely seeking to understand the challenges that providers are facing and the various cost drivers that impact the ultimate cost of services. Significant time was dedicated to discussing key current challenges including the impact of the new travel arrangements on many providers and the varying understanding about which services can and can’t be charged. There was strong recognition that many providers are still operating under the understanding that only direct, face-to-face services can be billed. It was also clear that many providers will choose not to charge some necessary non face-to-face activities such as reporting in cases where participant budgets are running low.

The consultation also allowed the group to provide extensive commentary and feedback about pricing differences that may arise across different professional groups, across different geographic regions, in different service delivery settings, and across different types of work activities. While in some cases there were differences in views on some of the ideas raised, it was clear that there is broad agreement across the sector about the costs of delivering services and challenges associated with working within the NDIS, in contrast with other schemes or patient cohorts.

As a group, we welcomed the assurance from the NDIA that the focus of this work was not cost reduction but rather to allow better classifying of activities to support understanding for participants and providers, as well as enabling better understanding of the specific therapies claiming under the NDIS. On that basis there was support for some changes to classification though also strong feedback that many of the pricing differences found in other schemes are based on historical reasons rather than genuine differences in the cost of delivering services.

As a sector we will closely monitor the pricing proposals to ensure that there is equity in any changes that are made. We do not support different pricing levels for different professions.

 Next steps

It is our understanding that the NDIA is not yet committed to any particular structural changes or approaches to pricing and is instead is seeking to understand therapy pricing within and outside the NDIS as well as to look at ways to improve the effectiveness of their systems.

We understand that as work progresses, the NDIA will begin to develop proposals and ideas for the future of therapy pricing and that the sector will have additional opportunities to provide feedback as that work is undertaken. We will continue to provide updates to members as work on therapy pricing continues.

 We very much welcomed the acknowledgement that the NDIA recognise that a large proportion of providers are struggling during this time of transition and that a healthy, sustainable Scheme is dependent on a strong, sustainable provider marketplace.