Pricing Arrangement Reference Group | 29 November 2023 | Item 3.1

Annual Pricing Review 2023-24

Matters for Discussion

Chair: Kee Hiaujoo, Branch Manager, Economics and Pricing

1. Purpose

1.1. To seek feedback from the Pricing Arrangements Reference Group (PARG) on the Annual Pricing Review (APR) 2023-24 Provider (Attachment A) and Participant (Attachment B) Consultation papers and the research plan (Attachment C).

2. Recommendations

2.1. That PARG DISCUSS the draft APR 2023-24 consultation papers and Research Plan.

3. Context and update since the approval of the 2023-24 APR Terms of Reference

3.1. The NDIA Board approved the APR Terms of Reference (ToR) on 24 October 2023 with a minor revision to note the increased focus on participants. Following approval, the Economics and Pricing Branch actively engaged with internal stakeholders across the NDIA to enhance our understanding and approach towards developing the consultation papers and related questions.

3.2. The final NDIS Review report was submitted to the Disability Reform Ministers on 3 November 2023. It is anticipated that the final report will be publicly available following the December 2023 National Cabinet meeting. The Australian Government will consider the recommendations from the Review.

3.3. The Royal Commission released its final report on 29 September 2023. The report made 222 recommendations for reform. The Australian Government is reviewing these recommendations and has established a Commonwealth Disability Royal Commission taskforce to guide the Governments response.

4. Proposed 2023-24 APR Provider Consultation Paper

4.1. The 2023-24 APR Provider Consultation Paper are designed to understand how organisations and providers in the care and support sector are adapting to recent economic conditions, identify primary business risks, and gauge the impact of the NDIS price arrangements and price limits on their operations. Additionally, it aims to explore the costs associated with governance and compliance within the NDIS, as well as unique challenges and cost factors for therapy and early childhood support providers.

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Pricing Interdepartmental Committee | 29 November 2023 | Item 3.1

Attachments

• Attachment A: 2023-24 Annual Pricing Review Provider Consultation paper
• Attachment B: 2023-24 Annual Pricing Review Participant Consultation paper
• Attachment C: 2023-24 Annual Pricing Review Research Plan

Disclosure Log

Document: ndis.gov.au

Title:

2023–24 Annual Pricing Review Provider Consultation Paper

Date:** December 2023*

This document was released under the Freedom of Information Act (FOI), which allows access and disclosure in accordance with Australia’s laws.

Disclosure Log

Acknowledgement

The NDIA acknowledges the Aboriginal and Torres Strait Islander people of this nation and the Traditional Custodians of the lands across which our Agency conducts our business. We pay our respects to the custodians of the land on which we work as well as their ancestors and Elders, past present emerging.

Copyright and Use of Material in This Document

Copyright material document with exception third party owned protected by NDISA. The material except logos trademarks third party licensed Creative Commons Attribution Non Commercial No Derivatives (CC BY NC ND) licence version International You may share copy redistribute document format must acknowledge owner reproduced material using ‘©National Disabiliy InsurancceAgency’ you not use for commercial purposes Reproduction any contained subject CC BY NC ND conditions available Creative Commons Australia site legal code is full The National Disability Insurance Agency expects that will benefit people disability information document Terms We Use | Meaning ABS Australian Bureau Statistics APR Annual Pricing Review CPI Consumer Price Index DSW Disability Support Worker FWC Fair Work Commission NDIA or Agency National Disability Insurance Scheme NDIS or Scheme National Disability Insurance Scheme Quality Safeguards Commission SCHADS Award Social Community Home Care &Disability Services Industry Award 2010 SIL Supported Independent Living WPI Wage Price Index ndis.gov.au XX December 23|AnnualPriceReview Pageof

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Disclosure Log

Purpose of this Consultation Paper

The National Disability Insurance Agency (NDIA or Agency) administers the National Disability Insurance Scheme (NDIS or Scheme), which was established to:

• support people with disability to pursue their goals.
• help them to realise their full potential.
• assist them to participate in and contribute to society.
• empower them to exercise choice and control over their lives and futures. Every NDIS participant has an individual plan that lists their goals, desired outcomes, supports they will use and funding received. Providers are a main contact point for participants delivering supports services helping to achieve these plans’ objectives through diverse competitive suppliers meeting structural changes created within consumer-driven markets as market stewards NDIA ensures efficient sustainable marketplace maintaining expanding supply high-quality disabilities driving efficiency innovation supporting transition longer-term more deregulated approach regulation applies all supported managed self-managed does not apply.

Disclosure Log

The current Pricing Arrangements and Price Limits are set in accordance with the NDIS Pricing Strategy, • The key principles underlying these arrangements include:

• Providing value-for-money outcomes.
• Delivering fair participant experiences that align across all regions within Australia’s vast geography;
• Supporting sustainable market growth through a balanced approach between supply-side incentives and demand-driven strategies;
• Promoting high-quality innovative supports while ensuring financial sustainability.

Disclosure Log

The NDIA is seeking feedback on changes that have occurred since the last APR only. High level findings from the 2022–23 APR are summarised in this paper. Any information you consider confidential should be clearly marked and identified accordingly; otherwise will remain undisclosed without notice or legal compulsion.

Disclosure Log

A snapshot of the National Disability Insurance Scheme

The NDIS has been in operation for ten years. As of 30 September 2023, the scheme includes $63{\textit{e}}5$ participants, an increase from twelve months earlier.* DuringtheSeptember quarter,$ frac{{}^{}}{{}{-}{\textit{s}}}{}^{‘${}$+{s}\times_{{}}{-}{{{}}-{\textit{n}}}-$$+$-$-${\textit{i}}${}${\textit{l}}${$i$s}s$t$r$q$a$n$d$q$l$i$m$p$k$h$,participants entered theScheme.$Total payments increasedby ${}^{’}${}$%from $ frac{{}^{}}{{}{-}{\textit{k}}}{}^{’${}$+{k}\times_{{}}{-}{{{}}-{\textit{j}}}-$$]+$-$-${\textit{o}}}${}{$l$x$b+i+l$l$c+h$.inSeptember 2022quarter to extrm{ extrm{ extrm{ extrm{ extrm{ extrm{ extrm{ extrm{ extrm{ extrm{ extrm{ extrm{ extrm{ extrm{ extrm{ extrm{ extrm{ extrm{ extrm{ extrm{10.1 billion in September $2023$ quarter.

The average payment forthe*12 months ending** frac{{}^{}}{{}{-}{\textit{s}}}{}^{‘${}$+{s}\times_{{}}{-}{{{}}-{\textit{n}}}-$$+$-$-${\textit{i}}${}${\textit{l}}${$i$s}s$t$r$q$a$n$d$q$l$i$m$p$k$h.$for all participants has increased from $ frac{{}^{}}{{}{-}{\textit{k}}}{}^{’${}$+{k}\times_{{}}{-}{{{}}-{\textit{j}}}-$$]+$-$-${\textit{o}}}${}{$l$x$b+i+l$l$c+h$.in 2023(an increase of ${9}.6%). The medianpayment per participanthasincreased by 2.{8}% over the same period.*It is also observed thataverage payments are almost nine times higher forthose insupported Independent Living (SIL) than those notinsiloverthelast twelve monthsto **$ frac{{}^{}}{{}{-}{\textit{x}}}{}^{’${}$+{x}\times_{{}}{-}{{{}}-{\textit{y}}}-$}-${\textit{z}}$_{ extrm{ extrm{ extrm{ extrm{ extrm{ extrm{ extrm{ extrm{ extrm{ extrm{ extrm{ extrm{ extrm{ extrm{ extrm{ extrm{ extrm{ extrm{ extrm{ extrm{s}}

Averagepaymentsarealmostfour timesthigherforadults compared with children. Overthe past four years, theproportionof participants under15 yearsof age has increasedfrom $40% to* $ frac{{}^{}}{{}{-}{\textit{k}}}{}^{‘${}$+{k}\times_{{}}{-}{{{}}-{\textit{j}}>-$$+$-$-${\textit{o}}}${}{$l$x$b+i+l$l$c+h$.and the proportion ofparticipants inSILintheschemehasdecreased from 6.{2}%to *$ frac{{}^{}}{{}{-}{\textit{x}}}{}^{’${}$+{x}\times_{{}}{-}{{{}}-{\textit{y}}}-$}-${\textit{z}}$_{ extrm{ extrm{ extrm{ extrm{ extrm{ extrm{ extrm{ extrm{ extrm{ extrm{ extrm{ extrm{ extrm{ extrm{ extrm{ extrm{ extrm{ extrm{ extrms}}}

All figures ins this section are from NDIA.* (23). NDIS Report todisability ministers for Q4 Y10 FullReport, ** frac{{}^{}}{{}{-}{\textit{s}}}{}^{‘${}$+{s}\times_{{}}{-}{{{}}-{\textit{n}}>}$$]+$-$-${\textit{i}}${}${\textit{l}}${$i$s}s$t$r$q$a$n$d$q$l$i$m$p$k$h$. ndis.gov.au XX December $25/01967 FOI 24/25-2242 | Page ${ }^{’}${}$+${p}\times{{}}{-}{{{}}-{\textit{k}}>-$$+$-$-${\textit{o}}}${}{$l$x$b+i+l$l$c+h$.

Disclosure Log

Scope of the 2023–24 Annual Pricing Review

The APR will examine, through engagement with participants, providers and community and government stakeholders and targeted research, whether the Scheme’s existing price control framework (pricing arrangements and price limits) continue to be appropriate or if modification is required. In particular, the APR will review the pricing arrangements and price limits: a) that apply to supports delivered by disability support worker (DSW) by updating the NDIS Cost Model for Disability Support Workers; b) for therapy supports to ensure participants receive value for money, while providers strive to improve quality of services and increase efficiency, with a particular emphasis on pricing benchmarks;c)for plan management to encourage innovation, improve quality of service andensure value for money;d) fors upport coordination to promote service quality and value for money,with afocusonparticipants experiences when utilisingsupport coordinatorstooversee theirsupports;e) in relation totheNDIS cancellation policywhich changed from two days toseven daysin line withe Social Community Home CareandDisabilityServices(SCHADS )Award The analysiswill examinethe impact onparticipan ts choice anda ndcontrol;

Contextual Factors

The scope of last year’s APR reflected work underway: NDIS Review and Royal Commission into Violence Abuse Neglect Exploitation People With Disability.

The NDIS Review

Minister for NDIS Government Services Hon Bill Shorten MP announced in October . The final report delivered November . It publicly available at time publication consultation paper.

The Royal Commission Into Violence Abuse Neglect And Exploitation Of People with Disability DRC

Final Report Released September Recommendations For Reform Full Report Found On Royal Commissions Website A Commonwealth Disability Royal Commission Taskforce Established To Coordinate Australian Governments Response Royal Commission Setting Priorities Providing Advice Bringing Together All Affected Portfolios Unified Effort.

Market Environment Influences

The Australian Economy

Australian economy continued to experience above average price increases essential goods services including housing groceries utilities petrol Consumer Price Index CPI increased percent twelve months September Annual services inflation marked most significant increase since June easing first two years September Services Inflation influenced increasing business costs such as insurance premiums rents cost labour noting other service related industries contributed elevated levels holiday travel financial services Amid inflationary pressure, economic experienced declining domestic demand slower global growth Unemployment rate was 37% october

Disclosure Log

The Gross Domestic Product (GDP) grew by 3.4% in 2022/***23, surpassing the pre-pandemic average growth rate of ***26%. The Australian Bureau Statistics (ABS`) attributes this growth post-COVID-19 lockdowns.

Wage Price Index measures wage in Australia labour market. seasonally adjusted WPI increased year-on-year September quarter with largest contributing industry being health care and social assistance sector where its WPI grew over same period.

Commonwealth Treasury projects real GDP growth for -23/-24 be `.5%, a that falls below preceding -year average . This forecasted slowdown is attributable to range challenging economic dynamics, including high inflation trend increasing interest rates decline domestic demand slow down global expansion. also forecasts slight increase unemployment reaching June which despite remains low historical standards Inflation expected stabilise 2023-24 align Reserve Bank Australia’s RBA target per cent by -. Concurrently Treasury projects an increase wages anticipated reach June , and resurgence positive starting early .

Australia’s population increased March predominantly driven migration Net Overseas Migration adding individuals A notable percentage these migrants are working age crucial disability services sector.

Providers growing market

References:

[³] ABS (2023) Labour Force, [⁴] ABS National Accounts: National Income Expenditure Product., Wage Price Index,

Disclosure Log

The provider market continues to grow. As of September 2023, there were **174,**275 active providers, with *8,*877 providing support to Agency-managed participants and 173,*546 supporting plan-managed participants.¹ⁱ There were 13,,***223 active registered providers as of december thirty ninth two thousand twenty three ,of which five hundred * sixty nine ,or four percent ,were active in quarter .There were six eleven comma sixty eight zero unregistered providers .Of which forty seven point twelve or fifteen per cent, were active first time in a quarter. It should be noted that sum total numbers will not reconcile with some ABNs are listed both registered and unregistered .

Disclosure Log

The NDIA utilises the Disability Support Worker Cost Model (Cost Model) to set price limits for supports offered by DSWs. This model calculates the complete cost of an hour’s support, factoring in components such as base pay based on the SCHADS Award entitlements overhead and margins. The NDIA has noted stakeholder feedback regarding DSW-related supports to the APR particularly concerning changes made with regard to the DSW Cost Model. A recurring theme within these comments includes a request from stakeholders seeking greater clarity around some assumptions related specifically towards the DSW Cost Model. Additional information about NDIS DSW Cost Models can be found here. Providers delivering those services, but not limited thereto typically fall into one or more registration groups:

• 0104 – High Intensity Daily Personal Activities
• 0107 -Daily Personal Activities
• 0115 Assistance With Daily Life Tasks In A Group Or Shared Living Arrangement
• 0125 Participation Community Social And Civic Activities

•   0133 Specialised Supported Employment

•   0136 Group Centre Based Activities.

In September quarter year ended 2023 DSW Supports were utilised by participants representing all active participants This marks increase from same quarter in . Moreover providers offered received payments showing increased from September The overall expenditure for these services reached $6.4 billion (representing of scheme expenditure) an increase from the $5 million in that September Following last APR SCHADS Award minimum wage increases Superannuation Guarantee and introduction paid family domestic violence leave implemented on July Consultation questions: The APR is seeking views stakeholder following questions Do assumption align with your organisations overheads operating costs If not specify discrepancies supporting evidence NDIA would like insights areas

Agency. Insurance Disability National the by 1982 Act Information of Freedom the under released was

Agency. Insurance Disability National the by 1982 Act Information of Freedom the under released was

Agency. Insurance Disability National the by 1982 Act Information of Freedom the under released was

Agency. Insurance Disability National the by 1982 Act Information of Freedom the under released was

Agency. Insurance Disability National the by 1982 Act Information of Freedom the under released was

Agency. Insurance Disability National the by 1982 Act Information of Freedom the under released was

Agency. Insurance Disability National the by 1982 Act Information of Freedom the under released was

2023-24 Annual Pricing Review

Participant Consultation Paper

December 2023

Acknowledgement

The NDIA acknowledges the Aboriginal and Torres Strait Islander people of this nation and the Traditional Custodians of the lands across which our Agency conducts our business. We pay our respects to the custodians of the land on which we work as well as their ancestors and Elders, past, present and emerging.

Copyright and use of this document

Copyright in the material in this document, with the exception of third-party material, is owned and protected by the National Disability Insurance Agency.

The material in this document, with the exception of logos, trademarks, third party material and other content as specified is licensed under Creative Commons Attribution Non-Commercial No Derivatives (CC BY NC ND) licence, version 4.0 International. You may share, copy and redistribute the document in any format. You must acknowledge the National Disability Insurance Agency as the owner of all intellectual property rights in the reproduced material by using ‘© National Disability Insurance Agency 2023’ and you must not use the material for commercial purposes.

Reproduction of any material contained in this document is subject to the CC BY NC ND licence conditions available on the Creative Commons Australia site, as is the full legal code for this material.

The National Disability Insurance Agency expects that you will only use the information in this document to benefit people with disability.

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Contents

• 2023–24 Annual Pricing Review
  • Page: 1
• Participant Consultation Paper
  • Contents: 3
    • What is the purpose of this consultation paper? 4
    • Why your feedback is important. 4
    • 2023-24 APR topics. 5
    • Important dates for the Annual Pricing Review. 6
    • How to use this consultation paper. 6
    • Consultation questions. 7
    • Conclusion. 8
    • How to send us your feedback. 10
• National Disability Insurance Agency
  • Page: 11

1. What is the purpose of this consultation paper

The role of the National Disability Insurance Agency (NDIA) is to implement the National Disability Insurance Scheme (NDIS), which will support a better life for hundreds of thousands of Australians with a significant and permanent disability and their families and carers. The Scheme helps people with disabilities achieve their goals, participate in society, and have control over their lives.

Providers offer supports and services that NDIS participants need to reach their goals. The NDIA regularly reviews its pricing rules and other market aspects to make sure they are still right. This Annual Pricing Review (APR) is part of that process.

The NDIA, as the market steward, works to create a good and lasting market with a variety of suppliers. The NDIA’s goals include giving NDIS participants more choice and control, ensuring a supply of quality supports, encouraging market efficiency and innovation, and smoothly moving the NDIS to a more flexible, outcome-focused system.

2. Why your feedback is important

The NDIA highly values your feedback as a NDIS participant. Your input is essential to us, especially as we review and set our price limits for services and supports. Your first hand experience and insights can help us ensure that our prices limits are fair, realistic and reflect the quality of care you receive.

Your feedback highlights aspects of the supports you receive that we might not see from our perspective. You can tell us how our pricing arrangements impact you and the quality of supports you receive. This will help us to understand if NDIA funded supports are available to you when needed and genuinely beneficial to you when provided.

By sharing your thoughts, you play an important role in shaping the NDIA funded supports you use. Your involvement in this process means that the supports you receive are not just provided to you but are created with you. This empowers you and respects your right to have a say in the supports and services you receive.

3. 2023-24 APR topics

The Annual Pricing Review (APR) will look closely at the current pricing arrangements and price limits of disability supports and services in the Scheme. This includes talking to NDIS Participants, service providers, community members and government officials.

Specifically, the scope of the APR this year include:

a) Disability support worker supports;

b) Therapy supports;

c) Plan management;

d) Support coordination;

e) The NDIS cancellation policy;

f) Provider travel when supports are cancelled.

Agency. Insurance Disability National the by 1982 Act Information of Freedom the under released was

Agency. Insurance Disability National the by 1982 Act Information of Freedom the under released was

Agency. Insurance Disability National the by 1982 Act Information of Freedom the under released was

share what we learn from the APR with the NDIA Board and include it in the APR report, which we will release by June 2024. The final decisions about pricing will be announced in June 2024, after the Fair Work Commission’s decision on the minimum wage around early to mid-June. These new price limits will start from 1 July 2024.

To find out more about this consultation and how to give your feedback please visit the NDIS Annual Pricing Review page. You can also get more details about this year’s review in the APR 2023-24 Terms of Reference here.

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