Issue Prices

NDIS Issues Register, March 2017

Issue
Prices

Aligning prices with the actual cost of supply is by far the highest ranked issue impacting on providers’ capacity to supply services in 2017.¹ The National Disability Insurance Scheme (NDIS) needs to be delivered within a $22B budget, but it can’t be delivered at the current pricing. Inadequate pricing threatens to erode quality of service and generate market failure. No one wants this to happen.

There are warning signals that suggest the gap between demand and supply will grow if providers cease the provision of supports which they believe are under-priced. This is highlighted in the intermediate evaluation report on the NDIS, conducted by the National Institute of Labour Studies (NILS), and explored in greater depth in NDS’s 2016 State of the Sector report.

In response to providers’ concerns about inadequate prices for personal support and community participation during the trial, the 2014 NDIA-NDS Joint Pricing Project developed a Reasonable Cost Model (RCM). The NDIA lifted prices in July 2014 but these were less than the prices which the model generated. The Agency did however accept National Disability Services’ (NDS) recommendations for a cancellation fee, costing of travel outside the hourly price and the introduction of an establishment fee.

In the subsequent two years, NDS negotiated full indexation and a delay in the transition to the ‘efficient price’, while assumptions underpinning the RCM were tested. This saw increases to the hourly price for one-to-one support by 3.9% in NSW, Victoria, Queensland and Tasmania and 1.9% in other states and territories.
Prices for most other supports increased by 2% in 2016/17. Increases for other supports to note include:

• 
  the monthly fee for financial intermediary services rose from $31.49 to $96.25,
  
• 
  supported independent living prices in all areas were increased by 3.9%, and
  
• 
  remote and very remote loadings increased slightly to 18% and 23%.
  

The announcement that prices were deregulated for participants who were self-managing their plans was welcomed and NDS continues to encourage the NDIA to extend this flexibility to other participants.

Unfortunately progress on other important pricing matters stalled. Despite interest from the National Disability Insurance Agency (NDIA) in participants with complex support needs, a higher price level has not been established. NDS has also made the case to introduce a weekend and public holiday rate for Short Term Accommodation.

Some providers would like to utilise therapy assistants for a portion of the total therapy budget to maximise value for money, but providers advise it isn’t viable - the current price ($40.92) is below the one-to-one support price ($42.79 in VIC/NSW/QLD/TAS & $43.58 in WA/SA/ACT/NT).

What NDS is seeking

• 
  Use of the assumptions underpinning the RCM to set the price for personal support and community participation
  
• 
  A mechanism established for setting group prices
  
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  Prices set that reflect the complexity of support (based on the skills required)
  
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  Prices for short term accommodation that reflect increased costs on weekends and public holidays
  
• 
  Review of the therapy assistant price
  
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  Prices that reflect jurisdictional and geographical difference
  
• 
  An improved cancellation policy
  
• 
  Extension of price deregulation
  

Status

• 
  The NDIA has released information about the review of NDIS prices for the next financial year. NDS summarised the review process and timeline and highlighted some concerns in a NDS News Update.
  
• 
  NDS launched the Industry Barometer which will provide benchmarking products to service providers that contribute data.
  
• 
  NDS continues to make the case for an increase in the higher intensity rate and the introduction of an additional higher rate for personal support and community participation and has compiled evidence from providers to use in ongoing negotiations.
  
• 
  The intermediate report on the evaluation of the NDIS, conducted by the National Institute of Labour Studies (NILS), highlights the risk that the gap between demand and supply will grow if providers cease the provision of supports which they believe are under-priced. This risk is explored in greater depth in NDS’s 2016 State of the Sector report.
  
• 
  The recent Australian National Audit Office (ANAO) report proposes that the NDIA role in price setting and price regulation is a conflict of interest and should be investigated by the Productivity Commission in its review of scheme costs – summarised in a NDS news update.
  
• 
  The 2016-17 NDIS price guide (effective 1 July) has been released - summarised in a NDS news update.
  
• 
  The Specialist Disability Accommodation Decision (SDA) Paper has been released and outlines prices for capital costs in addition to the supported living prices outlined in the NDIS price guide - summarised in a NDS news update.
  
• 
  NDS has been invited to represent the sector on the steering committee of the NDIA Financial Benchmarking project. 
  
• 
  Price deregulation was introduced to self-managing participants as of July 2016.
  
• 
  The NDIA continues to encourage a small number of participants in groups for community participation as reflected in the 1:2 and 1:3 staff participant ratios.
  

Issue
Planning

There is enormous pressure on the National Disability Insurance Scheme (NDIS) to accelerate the development, approval and activation of plans as the scheme expands. Expanding the NDIS from approximately 30,000 active participants in trial to approximately 460,000 at full scheme (typically with each subject to annual review) using the current approach to planning would over-stretch the National Disability Insurance Agency’s (NDIA) capacity.

Under pressure, the Agency is currently approving 450 plans per day, and in 2018-19 it will need to approve 850 plans and review 1,100 plans per day. Experience so far shows that the quality of planning by the NDIA remains inconsistent.

While the NDIA needs to determine eligibility and set individual budgets, life planning and coordination would be more appropriately done outside government. The local knowledge, practical experience and connections necessary for effective life planning and are mostly found in community-based organisations. NDS is pleased the NDIAs Partners in the Community program has outsourced some functions to non-government organisations.

The NDIA has implemented a range of strategies to improve the quality of planning including staff training, internal ‘virtual’ planning expertise task cards and reference packages. However providers continue to report the following concerns:

• 
  people are being contacted via telephone for initial information and later informed that this information was used to develop their plan,
  
• 
  participants’ are not given the opportunity to review plans before they are finalised
  
• 
  first plans are often missing essential support items such as supported independent living (SIL) and equipment,
  
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  providers lack of opportunity to provide feedback during a first plan/plan review often results in support gaps, and
  
• 
  the delay in funding for quotable items (in some cases taking months).
  

What NDS is seeking

• 
  State/territory governments to provide the NDIA with a list of supports that existing clients currently receive.
  
• 
  Adequate support coordination funding in plans, particularly for participants with complex needs.
  
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  Clear explanations of plan content to people with disability and their families to ensure they understand the types and level of support they can purchase.
  
• 
  Timely response and funding allocation for quotes and plan reviews.
  
• 
  An alert function to help providers track when a plan has been reviewed.*
  
• 
  A reporting function for providers to identify participant plan review dates.*
  

Status

• 
  NDS continue to be concerned about the quality of plans that are being developed and regularly monitor this.
  
• 
  Bruce Bonyhady, the outgoing Chairman of the NDIA, has acknowledged that the quality of plans is one of several challenges facing the Agency in implementing the NDIS.
  
• 
  The NDIA has indicated they are trying to streamline the quoting (administrative) process.
  
• 
  The NDIA has introduced contingency funding for people with Motor Neurone Disease to minimise the need for a review due
  
• 
  The NDIA developed a Reference Package for people with Multiple Sclerosis.
  
• 
  The NDIA has outlined the key roles of LACs and the arrangements in each state and distinguished the roles of planners, Local Area Coordinators (LAC) and Early Childhood Early Intervention (ECEI) Partners.
  
• 
  From 1 July 2016, the NDIA implemented a streamlined planning process to assist with bringing a large number of people into the scheme. The guided planning process (called First Plan) intends to enable rapid entry to the scheme, with planners using set questions and allocating individual budgets using reference packages as benchmarks.  
  
• 
  Despite the NDIA encouraging participants to share their plans with providers, this is not common practice and requires a form to be manually filled in and sent to the Agency by the participant. NDS is working with the NDIA to simplify the process of sharing plans.
  
• 
  The NDIA is agreeing to longer term plans for some participants. The guarantee remains in place that plans may be reviewed at any time the participant’s circumstances change significantly.
  

* Also noted in the NDIA Portal Issue