Ministerial Brief for Noting

For: Minister for the National Disability Insurance Scheme

Support Coordination market reform

Key Issues:

On 5 July 2024, you met with Mr Dougie Herd, Executive Director of Community Connections to discuss his concerns regarding the current pricing arrangements for National Disability Insurance Scheme (NDIS) support coordinators. During the meeting you asked that the National Disability Insurance Agency (NDIA) investigate options and provide advice on the feasibility of a temporary loading for registered providers of level 2 and level 3 support coordination services. As foreshadowed in the release of the 2023-24 Annual Price Review (APR), and consistent with your request, the Agency is commissioning quality services for vulnerable participants. A key component we are now progressing is establishing a pilot of prequalified and quality providers. Finalisation of the pilot is subject to NDIS Board approval.

Recommendations:

That you:

Note that the NDIA is establishing a pre-qualified and high quality support coordinator panel with a 4.75% price increase for level 2 and level 3 support coordination.

Decision:

Noted / Please discuss

Media Considerations: Yes

On 10 July 2024, the NDIA received a media enquiry from news.com.au seeking a comment on the “…300 providers that have pulled of offering support coordinators following the APR pay freeze” citing that their businesses were no longer viable. The Agency is currently drafting an op-ed for you outlining the rationale for not increasing support coordination prices in response to media and public criticism.

Signed by Minister:

Signature ………………………………… Bill Shorten ……./……./2024

Minister comments

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FOI 24/25-0208 MB24-000472

Cleared by:

Penelope McKay, Deputy CEO Partners, Providers and Home and Living Group

Signature: ………………………………………

Date cleared:

Sensitivity: Yes

• Pricing and fees remain a sensitive issue for providers. • Providers which do not prequalify for the panel may feel the arrangements are inequitable.

Financial Impacts: No

• There will be no budget impact as participant plans will not be increased to reflect the higher price paid to panel support coordination providers. • There is significant underutilisation of support coordination in participant plans. For the 12 months to 31 March 2024, the total annualised budget for support coordination was $1.41 billion while total payments over the same period was $1.05 billion.

Regulatory Implications: No

Consultation: No

Attachments:

Attachment A: Summary of support coordination panel pilot

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Background:

Support Coordinators

Support coordination is a NDIS funded capacity building support which helps participants make the most of their NDIS plans and pursue their goals.
Support coordination plays a key role in assisting NDIS participants who may have complex support needs or have additional complexity in their circumstances that impacts their capacity for effective use of their NDIS plans.
The use of support coordination has been steadily increasing, with 46% of current NDIS participants utilising this support, and a 16% increase in payments for support coordination in the last year compared to the previous year.

Annual Pricing Review (APR) 2023-24

The NDIA conducts an APR each year using a combination of market data, research, public consultation, and industry engagement to inform changes to pricing arrangements and price limits. The 2023-24 APR recommended that level 1 support coordination services be indexed, whilst payments under levels 2 and 3 remain at the existing price limits. The primary reason for maintaining existing limits was to constrain the growth in the support coordination market prior to changes in the delivery model as the NDIS Review recommendations are considered and implemented.
The APR also found that 13% of support coordination services are being delivered below the current price limits and there is no evidence to suggest supply of services is not meeting demand.
In terms of quality of services, participant feedback from APR consultation found that 63% expressed satisfaction while 22% of participants reported dissatisfaction, attributing their discontent with high costs, frequent changes in coordinators, and a lack of responsiveness, which sometimes led them to consider changing providers.

Financial implications of a temporary loading increase

The agency has modelled the impact of applying a 3.75% indexation (i.e., National Minimum Wage increase for 23-24) to level two and three support coordination price limits.

Estimated impact of indexation	Financial Year 2024-25
Registered providers	+28m
Unregistered providers	+6m
Total	+34m

Estimates are based on increases to existing payments

Options to support quality providers in the support coordination market

The NDIA acknowledges the need to retain quality providers in the support coordination market. There is evidence to suggest emerging risks in the quality support coordination services. The number of unregistered providers in the market has grown rapidly, with the proportion of registered providers decreasing from 79% to 42% between January 2021 and December 2023. In addition, the unregistered support coordination market seems to be dominated by smaller providers and sole traders, compared to the registered support coordinator market that is predominantly larger companies.

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FOI 24/25-0208 MB24-000472 9. The NDIS Review recommended establishing Navigators which would take on some aspects of support coordination, such as level 1 support connection. If such a reform is implemented, there will continue to be a need for quality providers to support participants with more complex needs. 10. The NDIA Board approved a commissioning approach for quality services for vulnerable participants. This pre-qualified panel of quality support coordination providers is being piloted to improve the quality of support coordination services and retain quality providers in the market while future reforms are implemented (see attached for a summary of the recommended approach).

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Ministerial Brief

Office:	Minister for the National Disability Insurance Scheme
Subject:	Support Coordination Market Reform
PDR:	MB24-000472
Critical date:	N/A
History:	Nil.
Consultation:
Contact officer:	Penelope McKay
Deputy CEO
Partners, Providers and Home and Living Group
M: redacted
Comments:

Support Coordinator Panel Pilot

Summary

Establish a panel of support coordination providers who meet NDIA quality criteria. The pre-qualified panel will be able to charge an additional 1% for SC level 1 and 4.75% more for SC levels 2 and 3. Conditions of pre-qualification will include a requirement to provide services to participants referred to it from the NDIA. The providers included on the panel will be frozen for the first 12 months while the approach is piloted and evaluated. If successful, the approach can be expanded to allow additional participation on the panel.

Issues

While the supply of support coordination services continues to expand, providers of high-quality supports claim that the price is inadequate. The price for support coordination levels 2 and 3 have not been indexed for 5 years due to the overall health of the market (increasing levels of supply).

There is a risk of high-quality support coordination providers exiting from the market ahead of implementation of a new Navigator model.

The NDIA needs to have high quality and pre-qualified support coordination providers to whom vulnerable and complex participants can be referred, such as participants who are currently serviced by fraudulent support coordination providers.

Poor support coordination is a contributor to intra-plan inflation. Better quality support coordination is a critical element in improving management of plan budgets and improving outcomes for participants.

Approach

Seek expressions of interest to participate on a panel of prequalified providers that can charge a higher price for support coordination services based on:

Meeting a set of quality and integrity criteria; and
Adherence to conditions which ensure safe and appropriate supports for vulnerable participants.

Proposed criteria for participation on the panel include:

Are currently a registered provider (as at 1 July 2024)
Provide Level 2 and 3 support coordination supports (the focus of the pilot is on complex participants)
Capacity to demonstrate provision of safe and appropriate supports (no breaches recorded by the NDIS Quality and Safeguards Commission)
Integrity checks (Fraud Fusion Taskforce screening)
Capacity to deliver complex supports (offer nursing capability and/or psychosocial recovery coaching)
Stable operations (a minimum of three years operating in support coordination market)
Have a conflict of interest management plan that precludes them referring participants to themselves or related businesses except in exceptional circumstances and with the approval for the NDIA

FOI 24/25-0208

OFFICIAL: SENSITIVE

Able to demonstrate a commitment to providing quality support services, including through:
- i. improving service offerings to better meet participant needs by bundling demand
- ii. managing intra and inter plan inflation as participant objectives are met.
A demonstrated commitment to training and supervision of the workforce.

Conditions of registration:

Must commit to accepting referrals from the NDIA for vulnerable and or complex participants

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Price adjustment for panel providers

The NDIA is recommending a 1% increase to the current rate for support coordination levels 1, 2, and 3 for pre-qualified providers to reflect the obligations associated with participating on the panel.

A further 3.75% increase (total increase of 4.75%) above the current rate for SC levels 2 and 3 is recommended to provide indexation increases for support coordination levels 2 and 3. 3.75% has been chosen as it reflects the 2023-24 increase to the National Minimum Wage.

It is not recommended that these increases apply to the rural and remote loadings that apply for SC.

Budget impact

There is no direct budget impact associated with the pilot as it is not recommended that participants’ plans be increased (by 4.75% of their support coordination costs).

No adjustment to participant plans is recommended due to:

The complexity of the changes and the time required to implement these changes
It is anticipated that higher quality support coordination services will lead to reductions over time as supports are established and participant outcomes are achieved
Existing underutilisation of support coordination in plan budgets

The overall cost of the pilot will be dependent on the number of providers that qualify to participate. The NDIA considers the number of providers that will be able to reliably demonstrate they meet the quality and integrity criteria and commit to the conditions for participation will be limited.

Support coordinators contribute to inter and intra plan inflation. Improving the quality of support coordination should help reduce these pressures. Additionally, good quality support coordinators should be better able to stabilise complex participants in crisis situations and assist the participant to become more independent thus bringing down the costs of their SC and overall plan over time.

Risks

There is a risk the pilot will be criticised on the basis participants who use panel support coordinators will pay more for services if their plans are not increased by a corresponding amount. The implementation of the pilot will need to be supported by a communications campaign that reinforces the understanding that the higher costs are associated with achieving better outcomes from their plans overall through better support coordination.

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FOI 24/25-0208 ee

OFFICIAL: Sensitive MB24-000472

Ministerial Brief for Noting

For: Minister for the National Disability Insurance Scheme

Support Coordination market reform

Key Issues: On 5 July 2024, you met with Mr Dougie Herd, Executive Director of Community Connections to discuss his concerns regarding the current pricing arrangements for National Disability Insurance Scheme (NDIS) support coordinators. During the meeting you asked that the National Disability Insurance Agency (NDIA) investigate options and provide advice on the feasibility of a temporary loading for registered providers of level 2 and level 3 support coordination services. As foreshadowed in the release of the 2023-24 Annual Price Review (APR), and consistent with your request, the Agency is commissioning quality services for vulnerable participants. A key component we are now progressing is establishing a pilot of prequalified and quality providers. Finalisation of the pilot is subject to NDIS Board approval.

Recommendations: Decision: That you:

Note that the NDIA is establishing a pre- qualified and high quality support coordinator panel with a 4.75% price increase for level 2 and level 3 support coordination.

Media Considerations: Yes On 10 July 2024, the NDIA received a media enquiry from news.com.au seeking a comment on the “…300 providers that have pulled of offering support coordinators following the APR pay freeze” citing that their businesses were no longer viable. The Agency is currently drafting an op-ed for you outlining the rationale for not increasing support coordination prices in response to media and public criticism.

Signed by Minister: John… Bill Shorten 2% Fj2024

Signature Minister comments: does aMif- Dougre Hed flay. fest we nthe. far ot wha ley mtttay ww ty jon “Te Heo, kn ews p Bar (1 (ky Hus gapoviruchle ndat weeh.

OFFICIAL: Sensitive

Cleared by:

Penelope McKay, Deputy CEO Partners, Providers and Home and Living Group

Signature:

Date cleared:

Sensitivity: Yes

Pricing and fees remain a sensitive issue for providers.
Providers which do not prequalify for the panel may feel the arrangements are inequitable.

Financial Impacts: No

There will be no budget impact as participant plans will not be increased to reflect the higher price paid to panel support coordination providers.
There is significant underutilisation of support coordination in participant plans. For the 12 months to 31 March 2024, the total annualised budget for support coordination was $1.41 billion while total payments over the same period was $1.05 billion.

Regulatory Implications: No

Consultation: No

Attachments:

Attachment A: Summary of support coordination panel pilot

Background:

Support Coordinators

Support coordination is a NDIS funded capacity building support which helps participants make the most of their NDIS plans and pursue their goals.
Support coordination plays a key role in assisting NDIS participants who may have complex support needs or have additional complexity in their circumstances that impacts their capacity for effective use of their NDIS plans.
The use of support coordination has been steadily increasing, with 46% of current NDIS participants utilising this support, and a 16% increase in payments for support coordination in the last year compared to the previous year.

Annual Pricing Review (APR) 2023-24

The NDIA conducts an APR each year using a combination of market data, research, public consultation, and industry engagement to inform changes to pricing arrangements and price limits. The 2023-24 APR recommended that level 1 support coordination services be indexed, whilst payments under levels 2 and 3 remain at the existing price limits. The primary reason for maintaining existing limits was to constrain the growth in the support coordination market prior to changes in the delivery model as the NDIS Review recommendations are considered and implemented.
The APR also found that 13% of support coordination services are being delivered below the current price limits and there is no evidence to suggest supply of services is not meeting demand.
In terms of quality of services, participant feedback from APR consultation found that 63% expressed satisfaction while 22% of participants reported dissatisfaction, attributing their discontent with high costs, frequent changes in coordinators, and a lack of responsiveness, which sometimes led them to consider changing providers.

Financial implications of a temporary loading increase

The agency has modelled the impact of applying a 3.75% indexation (i.e., National Minimum Wage increase for 23-24) to level two and three support coordination price limits.

Estimated impact of indexation
Financial Year 2024-25 Registered providers +28m Unregistered providers +6m Total +34m

Estimates are based on increases to existing payments

Options to support quality providers in the support coordination market

The NDIA acknowledges the need to retain quality providers in the support coordination market. There is evidence to suggest emerging risks in the quality support coordination services. The number of unregistered providers in the market has grown rapidly, with the proportion of registered providers decreasing from 79% to 42% between January 2021 and December 2023. In addition, the unregistered support coordination market seems to be dominated by smaller providers and sole traders, compared to the registered support coordinator market that is predominantly larger companies.

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OFFICIAL: Sensitive

The NDIS Review recommended establishing Navigators which would take on some aspects of support coordination, such as level 1 support connection. If such a reform is implemented, there will continue to be a need for quality providers to support participants with more complex needs.
The NDIA Board approved a commissioning approach for quality services for vulnerable participants. This pre-qualified panel of quality support coordination providers is being piloted to improve the quality of support coordination services and retain quality providers in the market while future reforms are implemented (see attached for a summary of the recommended approach).

OFFICIAL: Sensitive

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