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NDIA Board meeting of 28 April 2023
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| Agenda Item: | 6. |
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| Agenda Item: | Annual Pricing Review 2022-23 |
| Paper Type: | For Noting |
| SLT Sponsor: | David Gifford, Scheme Actuary |
- Purpose
1.1 To provide the Board with feedback from public consultation on the Annual Pricing Review (APR) 2022-23 and to present key evidence and research findings of areas that are currently being reviewed.
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- Background and context
3.1. The 2022-23 APR approach was presented to the Board in November 2022 and March 2023. The Board agreed to adopt an overall minimalist approach given that the broader NDIS Review is running concurrently. The main areas being reviewed in the current APR are Disability Support Worker (DSW) related supports, therapy, support coordination, and plan management.
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4.4. In terms of therapy services, many respondents suggested it is difficult to handle increased costs as NDIS price limits have not changed since 2019. The biggest driver in therapy services being higher supply costs and wages. Some providers stated that NDIS participants are charged more than other clients due to the greater complexity in delivering services to NDIS participants, whereas others say they charge the same across both client cohorts.
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| Annual Pricing Review 2022-23 | 6.1 |
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| Committee deliberations relating to its statutory functions are confidential – see Committee Resolution of 28 August 2017 |
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5.3. Therapy supports
5.3.1. In the 6 months to 31 December 2022, 325,319 participants[^1] purchased therapy supports through their plans. These supports were delivered by 46,434 active providers, representing $1.6 billion in total payments. Compared to $1.3 billion paid in July to December 2021, therapy payments increased by 26% from a year ago.
5.3.2. The proportion of registered providers remains high, with 72% of therapy payments for July to December 2022 being claimed by registered providers.
5.3.3. The Jobs and Skills Australia (formerly known as National Skills Commission) projects employment growth for therapy to continue for the next 5 years. Aged and Disabled Carers is the 13th fastest growing occupation area, expected to grow by 28% to 2026. The top 4 fastest growing therapists are Audiologists and Speech Pathologists (34.7% growth, close to four times the projected rate of growth of the entire workforce), Podiatrists and Physiotherapists (31.8% and 28.7% growth).
5.3.4. The NDIA has engaged with 16 Commonwealth and State therapy Schemes to obtain their therapy pricing as comparisons to NDIS limits. Overall, NDIS prices are in line or at the higher end for most types of therapies. However, results this year indicate that many types of therapies have been indexed by other schemes over the past year by up to 5%.
5.3.5. Another key change from the previous year is for exercise physiologists. Preliminary data suggests that there have been some adjustments from other Schemes, and the NDIS rate for exercise physiologists is now less in comparison.
[^1] 57% of all active participants at 31 December 2022.
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| Annual Pricing Review 2022-23 | 6.3 |
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| Committee deliberations relating to its statutory functions are confidential – see Committee Resolution of 28 August 2017 |
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5.3.6. Comparison of private billing rates will be undertaken and provided to the May redacted: s22(1)(a)(ii) - irrelevant material Board meeting.
- Responsibility and next steps
6.1. Draft recommendations for DSW related supports, therapy, support coordination and plan management will be presented at the 25 May 2023 Board meeting for approval. Once approved, the recommendations will be published in the APR 2022-23 Report in June 2023 for a 1 July 2023 implementation. Communication materials will be developed to support the release of the recommendations in June 2023.
Attachment
Attachment A: Annual Pricing Review 2022-23 – Research and Analysis
[^1] Includes registered and unregistered providers.
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| Annual Pricing Review 2022-23 | 6.4 |
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| Committee deliberations relating to its statutory functions are confidential – see Committee Resolution of 28 August 2017 |
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- Therapy supports
3.1. Table 4 below shows that in the 6 months to 31 December 2022, 325,319 participants (57% of all active participants) purchased therapy supports through their plans. These service supports were delivered by 46,434 providers who received a payment during the period from July to December 2022. The number of providers who delivered therapy services and were paid in July to December 2021 was 40,744, indicating a 14% increase to provider numbers from a year ago (both registered and unregistered with the NDIS Quality & Safeguards Commission).
3.2. Table 4 also shows that expenditure on therapy supports during July to December 2022 equates to $1.6 billion, accounting for almost 10% of all expenditure by the NDIS during this six-month period. This compares to $1.3 billion paid in July to December 2021. Therapy payments increased by 26% from July to December 2021 to July to December 2022.
TABLE 4: Therapy statistics for July to December 2021 and July to December 2022
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3.3. The largest 5 types of therapy support during July to December 2022 based on total payments, were:
- Occupational Therapy ($281 million)
- Early Childhood ($248 million)
- Behaviour ($208 million)
- Physiotherapy ($167 million)
- Psychology ($139 million).
Payments for the top 5 supports amounted to $1.0 billion, comprising 64% of the total Scheme spend on therapy in the 6 months to 31 December 2022.
3.4. Exercise physiology is currently lower than most other types of therapies in the NDIS in Pricing Arrangement and Price Limits ($167 compared with $193.99). ComCare did not provide information for exercise physiologists in the last APR but have this year reported a pricing range from $96.47 to $216.70 depending on location. Moreover, the Medicare Benefit Scheme’s (MBS) effective hourly rate is around $198.00.
3.5. As detailed in Table 5, Jobs and Skills Australia (JSA, formerly known as National Skills Commission) projects employment growth of the entire Australian workforce for 5 years to November 2026 at 9.1%. The growth in the therapy space will continue over this period with therapists making up 4 of the 11 fastest growing occupations, those being Audiologists and Speech Pathologists (34.7%), Podiatrists (31.8%) and Physiotherapists (28.7%) between 2021 and 2026. Audiologists and Speech Pathologists are projected to grow close to four times the projected rate of growth of the entire Australian workforce over that period.
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3.6. As detailed in Figure 4, a comparison to other therapy schemes shows a general indexation of prices compared to the 2021-22 APR, across the following types of therapies:
- Audiologists
- Counsellors
- Dietitians
- Exercise Physiologists
- Occupational Therapists
- Physiotherapists
- Podiatrists
- Prosthetists
- Psychologists
- Social Workers
- Speech Therapists
- Therapy/Allied Health Assistants.
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DOCUMENT 9
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NDIA Board meeting of 3 March 2023
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| Agenda Item: | 6.4.2 |
|---|---|
| Agenda Item: | Annual Pricing Review 2022-23 |
| Paper Type: | For Decision |
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3.2. The APR last year was extensive.
- On 28 November 2022, the Board was presented a history of the APR and elements of the current context relevant to the 2022-23 APR approach. The most recent (2021-22) APR involved extensive consultation and resulted in an increase in prices for disability supports equating to 9% with no changes in nominal prices for therapy supports, support coordination or plan management.
- The 9% increase for disability supports included a 2% temporary loading to allow for the ongoing cost of COVID-19 to providers as well as some costs arising from changes to the Social, Community, Home Care and Disability Services Industry Award 2010 (SCHADS).
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| Annual Pricing Review | 6.4.2.1 |
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| Board deliberations relating to its statutory functions are confidential – see Board Resolution of 4 September 2017 |
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3.4. Against this backdrop, it is also important to consider other contextual factors when reviewing pricing limits and arrangements of disability supports and services.
- The Consumer Price Index (CPI) rose by 7.8% over the twelve months to the December 2022 quarter, the highest annual change in the last 10 years. Although there is no obligation to increase prices in line with CPI inflation, heightened costs of living pressures will increase expectations of prices increases at or close to CPI inflation, especially for therapy, support coordination and plan management supports, for which prices have not increased since July 2019.
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- 2022-23 APR approach
4.1. The 2022-23 APR approach was presented to the Board on 28 November 2022. The proposed approach includes the following components:
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| Annual Pricing Review | 6.4.2.2 |
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| Board deliberations relating to its statutory functions are confidential – see Board Resolution of 4 September 2017 |
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5.1.
5.2.
5.3. Since October last year, the Agency has had a collaborative relationship with the NDIS Review and will continue to do so during the 2022-23 APR cycle. The engagement on pricing matters has covered areas such as sustainability and AFSR projections, investment effectiveness, participant experience activities (for example, 3P and PACE), plan inflation and participation patterns. Specialist disability accommodation pricing and therapy pricing are two areas of particular interest, along with School Leaver Employment Supports pricing.
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6.2.
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| Annual Pricing Review | 6.4.2.3 |
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| Board deliberations relating to its statutory functions are confidential – see Board Resolution of 4 September 2017 |
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NDIS Annual Pricing Review – Terms of Reference
Scope of the Annual Pricing Review
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- In particular, the Annual Pricing Review will review the pricing arrangements and price limits:
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(c) for therapy supports to ensure participants receive value for money, while providers strive to improve quality of service and increase efficiency.
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