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Figure 25: Top 10 Providers’ Market Share Against Overall Provider Growth for Therapy Supports, January 2021 to December 2023

60,000	11.3%	11.4%	11.1%	11.0%	10.9%
50,000		10%
49,503
46,326
40,660
36,001

Source: NDIS internal administrative data

Figure 26: Top 10 Providers’ Market Share by Remoteness for Therapy Supports, January 2021 to December 2023

50%	49%	48%
35%	37%	34%
11%	12%	11%

Source: NDIS internal administrative data

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The increase in unregistered providers is common for all areas

Table 18 highlights a decrease in the number of registered therapy support providers in non-remote areas, with a drop from 8,509 providers in the six months to 30 June 2021 to 7,326 in the six months to 31 December 2023. Conversely, unregistered providers have risen in all areas, growing from 27,528 to 45,543 in non-remote areas within the same periods (Table 19). This growth in unregistered providers contributes to the declining market power of the top ten providers which may signal increasing a less concentrated market. This is further explored in the market concentration section with the Herfindahl-Hirschman Index (HHI).

Table 18: Registered Providers by Remoteness for Therapy Supports, January 2021 to December 2023

Remoteness	January - June 2021	July - December 2021	January - June 2022	July - December 2022	January - June 2023	July - December 2023
Non-Remote	8,509	8,695	8,552	8,735	8,252	7,326
Remote	537	553	534	520	522	519
Very Remote	268	288	282	300	298	324
Total for Registered	8,552	8,745	8,595	8,778	8,302	7,392

Table 19: Unregistered Providers by Remoteness for Therapy Supports, January 2021 to December 2023

Remoteness	January - June 2021	July - December 2021	January - June 2022	July - December 2022	January - June 2023	July - December 2023
Non-Remote	27,528	31,964	34,090	37,940	41,938	45,543
Remote	407	511	583	660	775	944
Very Remote	169	209	250	299	346	427
Total for Unregistered	27,740	32,205	34,350	38,206	42,260	45,961

Source: NDIS internal administrative data

Note: The total for registered providers of therapy supports and total for unregistered providers of therapy supports does not align with the total number of therapy support providers. The reasons for this are: 1) One provider can provide multiple supports, being registered for some supports and unregistered for others (different registration groups) in the same period, so they are accounted for in both groups of providers; 2)

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Providers with unknown registration are captured in total amounts but not presented in this table as they make up a very small percentage of total payments; and 3) Some participant location details at the time of transaction were not available, so provider remoteness could not be determined.

Herfindahl-Hirschman Index - Increasing provider diversity signals less concentration in the therapy market

The Herfindahl-Hirschman Index (HHI) measures market concentration and offers insight into the competitive dynamics of therapy support providers within the NDIS from January 2021 to December 2023. A HHI below 1500 signals a concentrated market, and the observed decrease in the HHI during this timeframe indicates a growing level of concentration. This trend has correlated with the diminishing market share of the top ten providers, which has dropped to just under 11%, and the growth in the market share of unregistered providers, which has almost doubled from 18% to 35%.

Adjustments to the HHI have been made, assuming the total market is equivalent to the sum of payments made to providers for therapy supports, due to the absence of comprehensive financial data for the Australian market and individual providers’ financial statements. This approach offers a practical snapshot of the market’s competitive environment, as visually represented in Figure 27.

The adjusted HHI index has remained low for non-remote areas between the observation period of six months to June 2021 and six months to December 2023. The perceived lack of concentration of providers has been most pronounced in the very remote areas; however, this situation has improved over the observation period. This is one metric to assist the Agency understand the health of the therapy market, with this trend suggesting an increasing diversity in provider options and potential benefits for NDIS participants in the therapy market.

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Figure 27: Herfindahl-Hirschman Index for Therapy Supports, January 2021 to December 2023

Market concentration
More
January - June 2021
Remote

Source: NDIS internal administrative data

Note: Adjustments were made to HHI as the overall size of the Australian market and providers’ financial statements are unknown at the time of the analysis. Therefore, the NDIA assumed that the size of the market is equal to the total amount of payments made to providers for DSW-related supports.

Provider claiming analysis — Unregistered providers are more likely to be charging below price limits

Approximately 34% of services are paid under the published price limit, showing a slight decrease over recent periods across all providers. These claiming patterns are shown in Table 20 that distinguishes between services priced at the price limit for both provider types. This shows a consistent increase in the proportion of services billed at the price limit across all providers, with registered providers more likely to charge at the limit compared to unregistered ones.

While this trend is common to both registered and unregistered providers, unregistered providers more frequently offer services below the price limit (57% claimed at the price limit compared to registered providers’ 70% in the six months to December 2023). Compared to total claims, the share of payment claims by unregistered providers has almost doubled from 18% to 35% from the first half of 2021 to the end of 2023.

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Table 20: Claiming Patterns at Price Limit Analysis for Therapy Supports, January 2021 to December 2023

Claiming patterns – At price limit	January – June 2021	July – December 2021	January – June 2022	July – December 2022	January – June 2023	July – December 2023
Registered	64%	66%	68%	69%	70%	70%
Unregistered	41%	45%	49%	52%	56%	57%
All Providers	59%	61%	63%	64%	65%	66%

Source: NDIS internal administrative data

Note: All Providers above are inclusive of providers with the unknown registration status at the time of the transaction.

Business dynamism in the NDIS therapy support market

This section assesses the activity and change among providers in the therapy market. Business dynamism is gauged by the frequency of new providers joining and existing ones becoming inactive in the market, which serves as an indicator of the market’s overall health, and market competition.

To further assess the market dynamics, the NDIA reviewed the payment activities of registered providers over a three-year period from January 2021 to December 2023. ‘New activity’ is characterised by providers receiving payments in the half-year who did not receive payments in the preceding half-year. Conversely, ‘inactivity’ refers to providers not receiving payments in a half-year after having received payments in the previous one. Each provider’s activity is quantified as a percentage of the total payments within that half-year for new activity, or the prior half-year for inactivity. The NDIA recognises that this method does not perfectly measure market exits but provides the best estimation with the data available.

Despite a decrease in the number of registered therapy providers, they still accounted for 65% of total payments in the six months to 31 December 2023. This, in conjunction with the HHI findings, suggests that while the market is contracting in registered provider numbers, it continues to remain an important part of the therapy market.

Among registered therapy providers, 1,086 providers became inactive during this period; however, just under 840 providers of this group remained financially active by receiving payments for other services. Further analysis shows that 78% of these inactive therapy support providers had consistently received payments under $10,000 every six months, indicating that smaller providers could have contributed to the NDIS therapy market’s fluctuation.

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Figure 28 displays the change in registered provider activity between January 2021 to December 2023. Over the past three years, inactive registered providers in each half-year contributed to less than 0.4% of total payments. In contrast, registered providers with new activity in a half-year have contributed between 0.5% and 1.2% of total payments for that same period. The trend in the chart shows new providers receiving a smaller portion of total therapy support payments in 2023.

Figure 28: Registered Therapy Provider Activity Movements, January 2021 to December 2023

	January - June 2021	July - December 2021	January - June 2022	July - December 2022	January - June 2023	July - December 2023
New Activity as Percent of Total Half-Year Payments	1.2%	1.2%	0.7%	0.9%	0.5%	0.5%
Inactivity as Percent of Prior Total Half-Year Payments	0.2%	0.3%	0.4%	0.3%	0.3%	0.3%

Source: NDIS internal administrative data

Additional analysis reveals that inactive registered providers had relatively smaller claims averaging $3,129 in each half-year before becoming inactive, of which 88% receiving less than $5,000. This contrasts sharply with active registered providers who claimed an average of $139,542 each half-year. This difference in payments underscores the extent of market diversification and the relative financial weight of new versus established providers.

Figure 29 offers a more granular look at the number of participants supported by registered providers, showing a trend towards a larger client base in the period between January to June 2021 and July to December 2023. Despite a reduction in the number of registered therapy support providers over this period, the number of providers servicing more than 20 participants increased, with these providers receiving 96.2% of payments in July to December 2023.

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Figure 29: Registered Providers of Therapy Supports and Number of Participants that Claimed, January 2021 to December 2023

Participants	Number of Providers	Percentage
1 Participant	1459 (0.2%)	1412 (0.2%)
2-5 Participants	2076 (1.2%)	1486 (0.6%)
6-10 Participants	1093 (1.7%)	772 (0.9%)
11-20 Participants	1176 (3.7%)	843 (2.2%)
More than 20 Participants	2748 (93.2%)	2879 (96.2%)

Source: NDIS internal administrative data

Figure 30 shows the number of registered therapy providers receiving payments from January 2021 to December 2023.

Notably, 6,342 (48%) of 13,239 registered providers consistently received payments in all six half-year periods, which made up 94% of total payments. This data points to a common operating model adopted by large, registered providers which serves more participants.

Figure 30: Provider Continuity by Registration Status and Percentage of Total Payments. Registered Providers (Left) and Unregistered Providers (Right), January 2021 to December 2023

Number of Half Years with Payment	Registered Providers	Unregistered Providers
1	500	35,000
2	600	25,000
3	400	20,000
4	300	15,000
5	200	10,000
6	100	5,000

Source: NDIS internal administrative data

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Comparable government and funding schemes

The NDIA compared therapy price limits and arrangements across other comparable government schemes and funding. Overall, the analysis shows that NDIS price limits are broadly in line with other comparable schemes for most types of therapies.

The NDIA collaborated with 16 Commonwealth and State Schemes to obtain their therapy pricing. Responses from 13 schemes were received. For a complete overview of participating scheme, see section 2.4 Consultation overview.

To calculate the effective hourly price limit, NDIA sought information about the regulated length of therapy sessions (for example, the NDIS price limits for therapy are per hour). For comparability, the NDIA generally used standard or subsequent consultations where possible, noting that many schemes have differentiated items and/or pricing for initial consultations and standard/extended consultations.

The NDIA were able to calculate the effective hourly price where the length of a session was provided (for example, price per 20 minutes) or as an average session time, based on the observed length of sessions. In some cases, the length of a session was based on a minimum or maximum length (for example, price for at least 20 minutes). In these situations, some assumptions were made by the NDIA to calculate an hourly price, based on available information. If the length of a session (or an approximation) was not provided, the NDIA were unable to calculate the effective hourly price, and not able to directly compare prices, so these were excluded from the analysis.

As Figure 31 shows, the current NDIS price limits (shown as orange dots) are broadly within the range of the effective hourly rates paid by other schemes for the most common therapy supports, after considering duration of service. Information received indicates that over the past year, most schemes have increased prices for the therapy supports that they provide. Price changes vary by scheme and therapy support, but typically fall between 2% and 8%. This appears to have put NDIS into the middle range for some therapies, such as Audiologists, Counsellors, Exercise Physiologists and Psychologists, acknowledging ranges can be quite broad once scheme prices are turned into a comparable hourly price.

The main Medicare Benefits Schedule (MBS) items for allied health have a scheduled fee of $68.55 per 20 minutes session. This equates to an effective hourly rate of $205.65 which is higher than the NDIS hourly price limit. The Commonwealth funding (MBS benefit) for the hour is 85% ($174.80), but co-payments are common in the MBS and the scheduled fee is a better estimate of the total cost of the support.

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Figure 31: Comparison of NDIS price limits to other government schemes

[Image not converted to Markdown – check the source PDF page for the actual content]

This box and whisker chart shows the minimum value, first quartile, mean, median, third quartile and maximum value of a data set.

• The box contains the range of the middle half (50%) of the data.
• Mean is indicated by the cross (X) on the box.
• Horizontal line (middle line) of the box represents the median or middle number.
• The bottom line of the box represents the median of the bottom half or 1st quartile.
• The top line of the box represents the median of the top half or 3rd quartile.
• Whiskers are the lines extending from the ends of the box and these indicate variability outside the lower and upper quartiles, that is, the minimum and maximum values.

[Image not converted to Markdown – check the source PDF page for the actual content]

Source: NDIS calculations of comparable prices of other government funding schemes

Note: All NDIS price limits are shown in purple text. For some therapy supports, the NDIS has two different price limits. One price limit is for the eastern states (NSW, VIC, QLD, ACT) and the other is for all other states (WA, SA, TAS, NT).

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Private billing rates

This section analyses a data set of 1,791 private billing rates for several NDIS-related weekday in-room therapy services. The private billing dataset was compiled by the NDIA by scanning provider websites across Australia. Prices for weekend, initial consultations and telehealth consultations were excluded from the dataset, as well as some outliers⁴⁹.

The sample has been derived from the private billing analysis conducted in the 2021-22 Annual Pricing Review (4,014 in-scope observations). The NDIA tried to replicate the same sample during the 2022-23 Annual Pricing Review (2,857 in-scope observations). For reference to last year’s analysis, 1,167 observations dropped out of the last years sample of 2,857.

For greater representation in certain segments of the sample, observations were expanded in certain states (NSW, SA, NT and ACT) to ensure there was enough observations for significant results. This led to over 200 provider websites randomly sampled for relevant pricing, with many not having available or comparable pricing. In total, this provided a sample size of 1,791 observations for the 2023-24 period. The sample size is still considered sufficient for the purpose of pricing benchmarking. In the absence of a requirement to publish pricing or a database of comparable, time-based therapeutic sessions, these hinder the long-term viability of this sampling method. The NDIA intends to consider measures to improve this process in coming years.

The private billing rates were converted to effective hourly rates based on the length of consultation, for more direct comparison to the applicable NDIS price limit. About 30% of the sample included billing rates from non-metropolitan areas (considered as Modified Monash Model (MMM) areas 4 to 7).

⁴⁹ The study excluded outliers where the value of hourly rate was either greater than Quartile 3 +1.5Interquartile or was smaller than Quartile 1 – 1.5Interquartile.

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In the analysed sample of therapy services, the most frequently represented therapists were Physiotherapists, making up 20.5% of the dataset, followed by Psychologists at 15.4%, Clinical Psychologists at 10.1%, and Dietitians at 8.9%. For most therapy types, the dataset includes at least 80 observations, with the exceptions being Art Therapists (26 observations), Music Therapists (39 observations), and Social Workers (45 observations).

The diversity and overlap in pricing across different therapy types are illustrated in Figure 32, showing the range and commonalities in billing rates among the various services. There appears to be some multi-modal distributions for several types of therapies, where there is a cluster of prices in the sample around different price points.

Figure 32: Distribution of Private Billing Rates by Therapy Types

State	Counseling	Exercise Physiology	Art Therapy	Podiatry	Music Therapy	Dietetics	Occupational Therapy	Social Worker	Speech Pathology
	100	200	300	400

The distribution of sample observations geographically leaned more towards VIC, 34% of the sample, and QLD, with 27%, indicating an underrepresentation of therapists from NSW, which accounted for only 20%, compared to its share of the

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NDIS market (31% of total NDIS therapy claims in the six months to December 2023). The NT was the only state or territory with fewer than 30 observations (12).

Figure 33 shows the distribution of private billing rates across different states and territories, revealing substantial overlap and variance. From the analysis, certain states, and territories, including the NT and TAS, exhibited a variety of trends in pricing distribution.

Figure 33: Distribution of Private Billing Rates by State and Territory

State	VIC	NSW	QLD	NT	SA	TAS	ACT
WA
0	200	400	Dollars per hour

Table 21 shows an overview of the distribution statistics for the private billing rates sampled. On average, the effective hourly rate for therapists providing in-room services on weekdays was $195.6, with a median rate closely following at $194. The data set revealed a wide range of billing rates, from a minimum of $85 to a maximum of $396.

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Table 21: Summary Statistics of Private Billing Rate Sample, by Therapy Type

Type of Therapy	Count	Mean	Standard Deviation	Min	25th percentile	Median	75th percentile	Max	NDIS price limit
Art Therapy	26	$154.5	$30.6	$100.0	$135.0	$147.5	$178.8	$216.0	$193.99
Audiology	86	$194.5	$21.7	$156.7	$180.0	$190.0	$210.0	$240.0	$193.99
Counselling	161	$153.1	$41.2	$85.0	$120.0	$150.0	$179.5	$305.5	$156.16
Dietetics	165	$175.3	$51.2	$92.5	$132.0	$170.0	$200.0	$320.0	$193.99
Exercise Physiology	115	$154.1	$39.2	$93.3	$120.0	$159.0	$180.0	$265.3	$166.99
Music Therapy	39	$166.0	$36.7	$90.4	$120.0	$180.8	$194.0	$233.3	$193.99
Occupational Therapy	128	$181.0	$38.4	$93.3	$150.0	$194.0	$194.0	$291.0	$193.99
Physiotherapy	364	$202.7	$50.2	$90.0	$165.0	$200.0	$240.0	$324.0	$193.99/ $224.62**
Podiatry	86	$157.9	$46.8	$90.0	$120.0	$150.0	$180.0	$315.0	$193.99
Psychology	281	$228.6	$45.7	$120.0	$196.5	$228.0	$254.2	$380.0	$214.41*/$234.83**
Psychology - Clinical	179	$260.3	$39.6	$165.3	$230.0	$255.0	$284.4	$396.0	$214.41*/$234.83**
Social Worker	47	$184.8	$48.0	$90.0	$160.0	$180.0	$218.2	$270.0	$193.99
Speech Pathology	113	$192.7	$65.6	$95.0	$163.3	$193.3	$194.0	$380.0	$193.99
Total	1,791	$195.6	$56.0	$85.0	$158.0	$194.0	$230.0	$396.0	Varies

Note: * VIC, NSW, QLD, ACT. ** WA, SA, TAS, NT

Figure 34 and Figure 35 compare the average private billing rates for various therapy types to the current NDIS price limits. The findings indicate:

The average billing rates for clinical psychology and psychology in all states and territories exceed the NDIS price limits.

Therapies such as Speech Pathology, Audiology, Occupational Therapy, Dietetics, Social Work, Exercise Physiology, and Counselling have billing rates that are 90% or more of their NDIS price limits.

Conversely, Art Therapy (78.7%), Podiatry (81.4%), and Music Therapy (85.6%) show average billing rates that fall significantly below their NDIS price limits.

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Figure 34: Average Private Billing Rate Compared to the NDIS Price Limit (Dollar Value)

	NDIS price limit	Average private billing rate
Psychology - Clinical (WA, SA, TAS & NT)
Psychology - Clinical (NSW, VIC, QLD & ACT)
Psychology (WA, SA, TAS & NT)
Psychology (NSW, VIC, QLD & ACT)
Physiotherapy (WA, SA, TAS & NT)
Physiotherapy (NSW, VIC, QLD & ACT)
Audiology
Speech Pathology
Occupational Therapy
Music Therapy
Social Worker
Dietetics
Podiatry
Art Therapy
Exercise Physiology
Counselling

Figure 35: Average Private Billing Rate as a percentage of NDIS price limit

Mean private billing rate as a % of NDIS price limit

0%	25%	50%	75%	100%	125%	150%
Psychology - Clinical (NSW, VIC, QLD & ACT)
Psychology - Clinical (WA, SA, TAS & NT)
Psychology (NSW, VIC, QLD & ACT)
Psychology
Physiotherapy (NSW, VIC, QLD & ACT)
Audiology
Speech Pathology
Counselling
Physiotherapy (WA, SA, TAS & NT)
Social Worker
Occupational Therapy
Exercise Physiology
Dietitics
Music Therapy
Podiatry
Art Therapy

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Mean, Median and 75th percentile billing rates

Comparing the NDIS price limits with the mean, median, and 75th percentile billing rates for therapy types reveals important insights into the alignment between NDIS price limits and market-driven billing practices.

5.6.1 Psychology

The relevant NDIS price limits for Psychologists are set at $214.41 for VIC, NSW, QLD, and ACT (state grouping 1), and $234.83 for WA, SA, TAS, and NT (state grouping 2).

The statistical analysis shows that Psychologists have an average billing rate of $228.6, and Clinical Psychologists have a higher mean rate of $260.3. These amounts for this sample exceed the NDIS hourly price limits for Psychology supports, for both different state and territory groupings.

The median billings rates for Psychologists and Clinical Psychologists were at $228.0 and $255.0, respectively, which exceed the NDIS hourly price limits for Psychology supports, for most state and territory groupings.

The 75th percentile billing rates for psychologists and clinical psychologists are $254.2 and $284.4 respectively, indicating that a significant portion of billed appointments exceed the NDIS price limits.

This upper quartile of billing rates suggests that the private billing rates are frequently higher than the NDIS price limits. The benchmarking results indicate that the market rates for Psychology services, at the mean, medians and 75th percentile are now higher than the NDIS price limits.

5.6.2 Other therapy types

The following section discusses Audiology, Physiotherapy and Speech Pathology (selected due to sample being the next closest to the NDIS price limits). Note, $193.99 is the NDIS price limit for Audiology (national), Speech Pathology (national) and Physiotherapy (VIC, NSW, QLD, and ACT – state grouping 1). It is $224.62 for Physiotherapy in WA, SA, TAS, and NT (state grouping 2).

The means of private billing rates for Audiologists, Physiotherapy, and Speech Pathologists are $194.5, $202.7, and $192.7, respectively. For Physiotherapy, it has means of $197.0 and $220.9 for state groupings 1 and 2, respectively.

This is compared to the median billing rates for Audiology, Physiotherapy and Speech Pathology of $190.0, $200.0 and $193.3, respectively. For Physiotherapy, when considering the state groupings, the medians are $194.0 and $224.6 for state groupings 1 and 2, respectively.

At the 75th percentile, observed rates within the private market for these supports is $210.0 for Audiology, $240.0 for Physiotherapy, and $194.0 for Speech Pathology,

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Regressions

Regression analyses were undertaken to understand the relationship between therapy types, geographic regions, and billing rates, and to determine how these variables influence the price variability within the private therapy market. Table 22 details the results of the regression analysis. The dependent variable in all model regression models is the hourly private billing rate in dollars.

The analysis explores the similarities between some of the therapy groups. A series of Tukey’s range tests⁵⁰ were undertaken to group therapy types with similar means of private billing rates. The test found that Audiology, Dietetics, Occupational Therapy, Physiotherapy, Speech Pathology, and Social Work share comparable billing averages (Group 1); while Art Therapy, Counselling, Exercise Physiology, Music Therapy, and Podiatry share similar means. Group 3 comprises of both Psychology and Clinical Psychology, which are distinct but are considered together for analytical simplicity. These grouping forms the basis of Model 3, which will be explained further below.

Table 22: Statistical Models of Private Billing Rates

⁵⁰ A Tukey range test is a statistical tool used to compare the means of different groups to determine if they are significantly different from each other, while accounting for the fact that multiple comparisons are being made.

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Variable	(1)	(2)	(3)
Constant	180.6***	178.1***	192.5***
Art Therapy	-25.5**	-23.3**
Audiology	13.1*	20.4*
Counselling	-30.6**	-32.7**
Dietetics	-0.7	-2.9
Exercise Physiology	-29.5***	-27.6***
Music Therapy	-14.8**	-20.1**
Physiotherapy	23.8***	20.4***
Podiatry	-22.7***	-21.5***
Psychology	47.1***	47.6***
Psychology — Clinical	90.1***	78.3***
Social Work	5.1	4.7
Speech Pathology	23.2***	22.4***
Counselling, Exercise Physiology, Art & Music Therapy & Podiatry			-40.2***
All Psychology			46.7***
Regional		-11.4***	-12.57***
NSW		23.2***	22.9***
QLD		2.8	0.2
SA		12.3**	11.5**
WA		0.2	-0.4
Tas		2.4**	3.5**
ACT		22.6**	19.1**
NT		53.7**	52.1**
Adjusted R²	0.321	0.352	0.315
F Statistic	70.76	51.2	92.01
Observations	1,791	1,791	1,791

(* = p <0.05, ** = p < 0.01, *** = p<0.001)

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Note: The baseline (Constant) for Model 1 is Occupational Therapy. The baseline in Model 2 is Occupational Therapy in Metropolitan Victoria and in Model 3 it is Group 1 therapies (Audiology, Dietetics, Occupational Therapy, Physiotherapy, Speech Pathology, and Social Work) in Metropolitan Victoria.

Regression results of three specifications are presented in this section. The modelling begins with each therapy type as variables, (Model 1). The base (or omitted) variable is Occupational Therapy, meaning the constant coefficient reflects the mean Occupational Therapy private billing fee. The coefficients attached to each therapy type reflects the fee relative to Occupational Therapy (for example, the coefficient attached to Art Therapy is -25.5 and hence the average billing rate for Art Therapy is $155.1 (180.6 minus 25.5)).

Model 2 builds upon Model 1 by including state/territory and regional indicators, with Occupational Therapy, Metropolitan and Victoria being the base variables that reflect the coefficient on the constant term. Model 3 keeps the geographical indicators but replaces the individual therapy variables with the groupings found using the Tukey difference in means tests discussed previously.

Model 2 is preferred over Models 1 and 3 for its slightly higher explanatory power, with an adjusted R-squared⁵¹ of 0.352, indicating it explains 35.2% of the variations in private billing rates. The results suggest that the average hourly rate of $178 for Occupational Therapists in Metropolitan Victoria (Model 2), with Audiologists, Psychologists, Physiotherapists and Speech Pathologists appear to have exceeded the applicable NDIS price limits (statistically significant at 0.05 level).

A deep dive into the regression results revealed a meaningful statistical difference between both Clinical and Non-Clinical Psychology nation-wide. The results showed significant statistically difference consistent across applicable states and above its price limits. This adds significance to the previously discussed means, medians and 75^th percentiles comparisons between the different types of therapies.

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^{51 R-squared is a statistical measure that represents the proportion of the variance for a dependent variable that is explained by an independent variable or variables in a regression model.}

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The NDIA acknowledges that there are many uncaptured variables that would assist a greater explanation of private billing rates. This, however, is difficult to obtain through website scrapping alone.

Consultation feedback

The APR received 178 provider submissions, feedback from 13 professional bodies, one union, and 142 participants. A predominant theme was the suggested increase in the costs of delivering therapy support services, cited by approximately 87% of providers. These cost increases spanned across wages (including adjustments to meet Allied Health Awards and professional development), business expenses such as rent, utilities, office supplies, and insurance, as well as recruitment and retention challenges. The Ability Roundtable, incorporating an Allied Health Cost Model by Deloitte Access Economics, suggested a large difference, with a 12.9% variance between projected costs and the current NDIS Price Limit for major allied health disciplines. Professional bodies advocated for a price limit increase reflective of cumulative indexation since 2019 and suggested automatic indexation from 2025, claiming thin margins on which many small-scale therapy support businesses operate.

Regarding the provision of therapy and early childhood supports to both NDIS and non-NDIS participants, most providers catered to a mix of clients, with the proportion of NDIS participants ranging from 25% to nearly 100%. Despite the varied client base, appointment durations were often standardised, tailored to client needs rather than funding source, although complexities associated with NDIS participants sometimes necessitated longer sessions. Pricing approach varied, with most providers charging at the NDIS price limit, yet some reported differences in charges between NDIS and non-NDIS clients, attributed to the complexity of NDIS participants or additional administrative burdens. Unique costs associated with early childhood supports for NDIS participants were identified, including the need for team-based approaches, specialised skills, and extended appointments, which highlighted the complexity and intensity of services required. Professional bodies echoed these sentiments, emphasizing the need for specialised training and resources, particularly for providers catering to young children with disabilities.

See Appendix A for more details on common themes raised in submissions to the 2023-24 APR Consultation Paper.

Discussion

The Australian therapy market encompasses a wide array of services provided by allied health professionals, who are typically university-educated with specialised expertise in preventing, diagnosing, and treating various conditions and illnesses. While the NDIS forms an important part of this landscape, allied health services extend beyond NDIS funding. These services are also accessed through various other arrangements, including Medicare subsidies, private health insurance, where it

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is common for out-of-pocket payments to be made by the consumer, other government schemes, and the Department of Veterans Affairs (DVA).

In the 2022-23 financial year, 39% or approximately 10,389,000 individuals accessed allied health services52. For comparison, 379,296 participants, representing 59% of the total 646,449 Scheme participants in the six months to 31 December 2023, accessed allied health supports using NDIS funding.

The NDIS therapy provider market has continued to demonstrate strong growth (14% growth for the six-month comparison to 31 December 2023 to same period the previous year), with a notable trend away from registered providers to a diversified unregistered provider market. The proxies the NDIA has used as an overview for market health and competition include the HHI, provider entry, periods of activity and inactivity, and share of total NDIS therapy payments has suggested the market continues to mature and continues to meet increasing demand in most areas.

The NDIS therapy market operates in a manner that closely aligns with the characteristics of a deregulated, or private market, more so than other NDIS sub-markets. Despite its market-like behaviour, the NDIS therapy market includes regulatory mechanisms, specifically price limits, to assist participants receive value for money. These price limits are closely linked to the dynamics of the private market, ensuring that NDIS pricing remains competitive and reflective of current service costs.

Accordingly, other government schemes and the private billing market serve as suitable comparators to assess the appropriateness of the NDIS price limits. Feedback from consultations and discussions with various government funding schemes has indicated that, despite the relative smallness of users of the NDIS therapy market, it could act as a ‘price setter.’ Evidence of this may be seen in

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52 Australian Institute of Health and Welfare (2022), Australia’s health 2022: in brief, catalogue number AUS 241. Australia’s health series number 18, AIHW, Australian Government.

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private billing rates, where the median and 75th percentile rates pricing for certain therapies align closely with the corresponding NDIS price limits.

Although benchmarking NDIS price limits against other comparable government funding schemes may introduce certain inaccuracies, it remains an important process. This ensures that government funding mechanisms do not inadvertently compete against each other for therapy professionals. Key factors to consider when comparing NDIS to other schemes include:

• Risk assessment and pricing models: Some schemes often base pricing on risk assessments and pooled resources, which does not always reflect the costs of individualised support required by individuals, such as NDIS participants compared to the general population.

• Contractual and volume discounts: Prices in other government schemes may be influenced by contractual agreements or volume discounts that are not applicable in the context of the NDIS service delivery that can lead to lower benchmarks.

The 2023-24 APR analysis of other schemes showed that while some have increased their pricing or funding levels, NDIS price limits remain consistent with the majority of therapies provided across these schemes. It is important to note, that there is significant variation in therapy pricing and funding levels among different schemes. Additionally, certain therapies such as Audiology, Art Therapy, and Music Therapy, which are covered by the NDIS, are not typically funded by other insurance schemes, including private health.

The analysis of private billing rates offers a comprehensive view of the diverse range of therapy supports available to NDIS participants, reflecting market-driven costs influenced by direct service delivery, provider expertise and current demand. By gathering a broad dataset of private billing rates from provider websites and adjusting them to effective hourly rates, the NDIA ensures a fair comparison across different therapies and geographic areas. This standardisation is important for assessing whether NDIS price limits align with market rates, thereby maintaining fairness and relevance within the private therapy sector.

The analysis indicates that NDIS price limits generally match or exceed the rates for most therapies nationwide. However, regression analysis highlights statistically significant variances among therapies, which could correspond to differences among therapy professionals such as in qualifications, skills, and experience.

Examining the statistically significant differences and general market pricing metrics, including the mean, median, and 75th percentiles, showed that rates for Psychologists often met or exceeded the NDIS price limits. Additionally, when compared with other government schemes, the NDIS price limits for Psychologists are not at the higher end of the spectrum. This information together suggests there is stronger evidence supporting adjustment to NDIS price limits for Psychologists compared to other types of therapists.

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Recommendations

Review of the current price limits for Psychologists against private billing rates and other comparable government schemes, it is apparent that the current limits generally sit below the prevailing market rates. The mean billing rate for psychologists is $228.6, with clinical psychologists at a higher rate of $260.3, both exceeding the NDIS hourly limits. The difference is further highlighted at the 75th percentile billing rates, where a significant portion of billed services are charged at higher rates than current price limits. This gap between market rates and the current NDIS price limits suggests that the NDIA should increase the hourly price limits, with the proposal being to use an indexation methodology of 80/20 split between the Australian Bureau of Statistics (ABS) Wage Price Index (WPI) and ABS Consumer Price Index (CPI).

Recommendation 6

The NDIA should increase the price limits for supports delivered by a Psychologist on 1 July 2024 in line with the weighted movement over the previous twelve months in the ABS Wage Price Index (Australia, total hourly rates of pay excluding bonuses) and the ABS Consumer Price Index (All Groups, weighted average of eight capital cities) over the 12 months to the March Quarter immediately preceding the indexation date (with an 80/20 weighting).

Specifically, this should be for support line items: ‘Assessment Recommendation Therapy or Training – Psychologist (15_054_0128_1_3), ‘Early Childhood Supports – Psychologist (15_001_0118_1_3)’, and ‘Specialist Behaviour Intervention Support (11_022_0110_7_3).’

Review of the alignment of the NDIS price limits for other therapists against the private billing rates and other comparable schemes suggests a general compatibility between NDIS price limits and prevailing market rates. In general, for most therapists, mean and median billing rates closely mirror the NDIS hourly price limits, which are set at $193.99 in most regions, suggesting that the current price limits adequately reflect market norms. Even when considering some therapists which means, medians and 75th percentile billing rates exceed NDIS price limits, the frequency of such instances does not indicate a systemic pricing concern that hinders participants from accessing these services relative to other clientele.

Recommendation 7

The NDIA should not make any further structural adjustments to the pricing arrangements for therapy supports at this time and should not index the price limits for all other therapy-related supports on 1 July 2024.

Support Coordination

Context

Support coordination, funded by the NDIS, is important for supporting participants to utilise their NDIS plans and achieve their goals. Support coordinators assist participants by connecting them to NDIS funded and mainstream supports, tailoring services and supports to individual participant wishes and plan budgets. They are also instrumental in enhancing participants’ abilities to understand and navigate the NDIS, empowering them to make informed decisions. This includes monitoring plan budgets and the effectiveness of supports, ensuring they align with participants’ needs, preferences, and goals.

To be effective in their roles, support coordinators need an in-depth understanding of the service offerings within a participant’s local market, identifying providers who can meet their needs and preferences. This often involves sourcing alternative providers to ensure continuity of support.

Registration is not mandatory for support coordinators. However, registered support coordination providers in groups: 0106: Assistance in coordinating or managing life stages, transitions, or supports, and 0132: Specialised Support Coordination must adhere to the NDIS Practice Standards. These standards cover participant rights, provider governance, and conflict of interest management.

The NDIS has an established pricing framework to cater to varying levels of support coordination, from basic Support Connection to Specialist Support Coordination for participants with higher support needs. This framework aims to provide a balanced pricing model, facilitating quality support for participants. The three levels — support connection (level 1), coordination of supports (level 2), and Specialist Support Coordination (level 3) — reflect the spectrum of assistance participants might require, each with designated price limits (Table 23). Additional information on the Price Limits and Pricing Arrangements for support coordination can be found on the NDIS website.

This chapter reviews the appropriateness of the current pricing arrangements for Support Coordination.

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Table 23: NDIS Price Limits for Support Coordination Supports

Item Number	Item Name and Notes	Unit	Non-Remote	Remote	Very Remote
07_001_0106_8_3	Support Coordination Level 1: Support Connection	Hour	$74.63	$104.48	$111.95
07_002_0106_8_3	Support Coordination Level 2: Coordination of Supports	Hour	$100.14	$140.19	$150.21
07_004_0132_8_3	Support Coordination Level 3: Specialist Support Coordination	Hour	$190.54	$266.75	$285.80

6.2 The NDIS Review

The final report from the Independent NDIS Review addressed foundational aspects of the current support system, making recommendations on the need to introduce a new navigation function. It acknowledges the essential role of support coordination in aiding participants to manage and implement their NDIS plans effectively but also suggests inconsistencies in its delivery and effectiveness.

Due to the proposed reforms recommended by the NDIS Review, developing a support coordination specific cost model at this point of time involves significant risk of having an outdated pricing model while the sector is undergoing significant evolution. On balance, it is not recommended for the NDIA to develop a specific cost model for Level 2: Coordination of Supports and Level 3: Specialist Support Coordination (Recommendation 9 from the 2022-23 Annual Pricing Review) now. A stable and predictable pricing framework over the transition period is important to allow participants and providers to plan with greater certainty and minimise disruption.

6.3 Scheme Statistics

Table 24 and Figure 36 show that in the six-month period to December 2023, 8,823 unique providers delivered support coordination to 245,696 participants, which accounts for 38% of all active participants in the Scheme. This activity represents $531 million in payments, or 3% of the total scheme spend. This is an 18% increase from the same period in the previous year, which saw $451 million in payments.

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Table 24: Summary of Changes in Support Coordination Participants, Total Providers and Total Claims

Statistics	July – December 2022	July – December 2023	Percentage Change
Total number of NDIS participants	215,817	245,696	+14%
Total number of active providers	6,802	8,823	+30%
Total amount claimed	$451 million	$531 million	+18%

Figure 36: Number of Participants and Providers Claiming Support Coordination Supports, January 2021 to December 2023

[Image not converted to Markdown – check the source PDF page for the actual content]

6.4 Participants

From July to December 2023, 230,621 participants used Level 2: Coordination of Supports. There were 10,354 participants who used Level 3: Specialist Support Coordination and 19,064 participants who used other support coordination supports (Level 1: Support Connection and Psychosocial Recovery Coach supports). Figure 37 illustrates the distribution of participants using different levels of support coordination compared to the previous year.

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Figure 37: Participants Using Different Levels of Support Coordination Supports

	July-December 2023	July-December 2022
Support Coordination Level 3: Specialist Support Coordination, 10,354		Support Coordination Level 3: Specialist Support Coordination, 8,446
Other, 19,064		Other, 14,214

Source: NDIS internal administrative data

Providers

6.5.1 The number of providers continues to grow, especially unregistered providers

Figure 38 examines the growth of NDIS support coordination service providers between January 2021 and December 2023, showing differences in how fast different levels are expanding. The provider landscape has seen considerable growth, with the number of unique providers delivering Level 2 Support Coordination increasing from 3,445 to 7,799 over the period, an average six-month growth rate of 18%. The proportion of registered to unregistered providers has decreased from 79% to 42%, although registered providers still accounted for 82% of the total claims for these services in the six months to December 2023.

Notably, the number of providers for Level 2: Coordination of Supports has tripled over the observation period, showing a much faster growth rate compared to providers of Level 3: Specialist Support Coordination and other support coordination supports, which have grown at a slower pace.

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Figure 38: Number of Providers by Support Coordination Level, January 2021 to December 2023

	Support Coordination Level 2: Coordination of Supports	Support Coordination Level 3: Specialist Support Coordination	Other
January - June 2021	3,445	711	1,240
July - December 2021	4,305	875	1,867
January - June 2022	5,082	1,003	2,136
July - December 2022	6,006	1,154	2,771
January - June 2023	6,897	1,345	3,348
July - December 2023	7,799	1,565	3,840

Source: NDIS internal administrative data

6.5.2 The increasing number of unregistered providers has led to changes in market share

From January 2021 to December 2023, the market dynamics in the support coordination sector changed considerably. The period saw a 50% increase in the number of registered providers, alongside a four times increase in unregistered providers. During this time, the market share of unregistered providers grew from 75% to nearly 18%.

Concurrently, the market share held by the top ten providers diminished from 121% to 7% (Figure 39), a trend observed consistently across different geographical settings; non-remote, remote and very remote areas (shown in Figure 40, Table 25 and

Table 26). This decrease in concentration among the largest providers highlights the changing dynamics across the sector.

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Figure 39: Changes in Top Ten Provider Market Share Compared to Growth in Support Coordination Providers, January 2021 to December 2023

	2021	2022	2023
9	8,000	5,693	4,905
10	7,000	6,000	5,000

Figure 40: Top Ten Provider Market Share by Remoteness for Support Coordination Supports, January 2021 to December 2023

	Non-Remote	Remote	Very Remote
97%	50%	40%	30%
96%	48%	38%	28%
91%	40%	30%	20%

Note: the chart shows market share for both registered and unregistered providers.

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Table 25: Registered Providers by Remoteness for Support Coordination Supports,

January 2021 to December 2023

Remoteness	January – June 2021	July – December 2021	January – June 2022	July – December 2022	January – June 2023	July – December 2023
Non- remote	2,444	2,787	3,026	3,294	3,469	3,647
Remote	280	299	299	308	324	362
Very remote	168	182	175	187	199	212
Total for registered	2,467	2,810	3,044	3,332	3,503	3,686

Table 26: Unregistered Providers by Remoteness for Support Coordination Supports,

January 2021 to December 2023

Remoteness	January – June 2021	July – December 2021	January – June 2022	July – December 2022	January – June 2023	July – December 2023
Non- remote	1,437	2,147	2,712	3,472	4,366	5,242
Remote	36	71	85	121	160	197
Very remote	23	35	47	69	80	98
Total for unregistered	1,455	2,174	2,739	3,518	4,420	5,300

Source: NDIS internal administrative data

Please note a discrepancy in the total number of ‘active’ therapy providers, attributable to two factors: firstly, some providers offer a mix of registered and unregistered supports, leading to their classification in both categories. Secondly, a small fraction of providers with undetermined registration status contributes to total payment figures but is excluded from detailed tabulation, representing less than 1% of the overall financial transactions.

Market share reduction of leading providers shows signs of a less concentrated market

There are a number of indicators which can be used to assess whether there is healthy competition in a market. While no single measure is a perfect indicator of the level of competition, the Herfindahl-Hirschman Index (HHI) measures market concentration and offers some insight into the health of the support coordination sector. A HHI under 1,500 indicates a market with many competitors and a lack of dominance by any single provider, which typically results in more choices. Conversely, a rise in the HHI indicates a rise in market concentration, suggesting less competition among providers.

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In the period from January 2021 to December 2023, the adjusted HHI for support coordination in metro areas has been low is currently at 16, indicating a less concentrated market. This is contrast by a much higher adjusted HHI in the remote (250) and very remote areas (371) which is consistent with a prior expectation (Figure 41). Moreover, the adjusted HHI for very remote areas has been decreasing until six months to December 2022. Since then, the adjusted HHI for very remote areas has increased again but not back to the levels two to three years ago.

Figure 41: Herfindahl-Hirschman Index for Support Coordination Supports, January 2021 to December 2023

Market concentration
More
Less
January - June 2021
July - December 2021
January - June 2022
July - December 2022
January - June 2023
July - December 2023

Source: NDIS internal administrative data

6.5.4 The unregistered support coordination market appears to be structured differently

Submissions to the APR from registered support coordinators and peak bodies suggest differences in cost structures between registered and unregistered providers. It is claimed that registered providers face additional financial imposts stemming from the registration process and ongoing compliance obligations, expenses not shared by their unregistered counterparts. This difference in operational costs potentially influences pricing strategies, where registered providers may price their services at or near the NDIS price limit to offset costs associated with regulatory compliance.

Figure 42 and Figure 43 show the distribution of support coordination providers by registration and entity type for the six months to December 31, 2023. Figure 42 shows that registered providers are mostly companies providing significant NDIS

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supports, while Figure 43 shows that unregistered providers are mostly sole traders especially those with lower turnover.

Registered providers claimed 82% of the support coordination payments made to all providers. This demonstrates that registered providers, although representing a smaller proportion of the total providers count (5,300 unregistered providers to 3,686 registered providers), are responsible for the majority of payments in terms of service delivery.

Figure 42: Registered Providers of Support Coordination Supports by Entity Type and Total Payments, July to December 2023

	Sole Trader	Partnership	Company	Trust/Govt/Fund
Less than $50k	redacted	redacted	redacted	redacted
$50k < $250k	183	479	162	10
$250 < $500k	103	155	205	10
$500 < $1m	103	85	249	7
$1m +	redacted	redacted	redacted	redacted

Source: NDIS internal administrative data

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Figure 43: Unregistered Providers of Support Coordination Supports by Entity Type and Total Payments, July to December 2023

Less than $50k	$50k < $250k	$250 < $500k	$500 < $1m	$1m +
2,000	900	300	100	50

Source: NDIS internal administrative data

These above figures highlight a contrast in the type of markets across unregistered and registered support coordinators. That is the make-up of markets, payment wise, the unregistered support coordinator market seems to be dominated by smaller sole traders, compared to the registered support coordinator market that is predominantly larger companies.

Table 27 shows that approximately 13% of support coordination services were delivered at rates below the NDIS price limits. This trend has been driven by activities of unregistered providers, who are more likely to claim below the price limits. Unregistered providers have seen their share of total transactions increase from 2% in the six-month period from January to June 2021 to 12% in the six-month period from July to December 2023, underscoring their growing presence and competitive pricing strategies within the NDIS market.

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Table 27: Claiming Patterns at Price Limit Analysis for Support Coordination Supports, January 2021 to December 2023

Claiming patterns – At price limit	January – June 2021	July – December 2021	January – June 2022	July – December 2022	January – June 2023	July – December 2023
Registered	91%	93%	93%	92%	90%	89%
Unregistered	66%	72%	75%	74%	74%	72%
All Providers	91%	92%	92%	91%	89%	87%

Source: NDIS internal administrative data

Note: All Providers above are inclusive of providers with the unknown registration status at the time of the transaction.

Business dynamism in the NDIS support coordination market

This section examines the vitality and changes within the market for support coordination of registered providers. The analysis in this section focuses on registered providers as it reflects the majority of the payments (82% in the six months leading to December 2023)%°. Business dynamism refers to the rate at which new providers enter the market and existing providers exit. This is one of many indicators of the market’s health, competitiveness, and its capacity to innovate and meet participants needs.

53 Data analysis of registered provider payment activity by the NDIA includes payments made against Agency managed plans, which are attributed to registered providers, and payments for plan management services. Providers with an unclear status at the time of transaction or those providing an invalid ABN have been excluded from this analysis.

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Comparison of provider payments for “new” activity and inactivity

To further assess the market dynamics, the NDIA reviewed the payment activities of registered providers over a three-year period from January 2021 to December 2023. ‘New activity’ is characterised by providers receiving payments in the half-year who did not receive payments in the preceding half-year. Conversely, ‘inactivity’ refers to providers not receiving payments in a half-year after having received payments in the previous one. Each provider’s activity is quantified as a percentage of the total payments within that half-year for new activity, of the prior half-year for inactivity. The NDIA recognises that this method does not perfectly measure market exits but provides the best estimation with the data available.

The data indicate that over the three years, providers who became inactive in any half-year accounted for 0.4% to 0.6% of the total payments. On the other hand, providers with new activity in any half-year contributed to 1.1% to 2.2% of the total payments.

Figure 44 displays the change in registered provider activity between January 2021 to December 2023. Payments made to “new” active providers are consistently higher than payments made to providers in the six-month period before they became inactive.

Figure 44: Registered Support Coordination Provider Activity Movements, January 2021 to December 2023

	January - June 2021	July - December 2021	January - June 2022	July - December 2022	January - June 2023	July - December 2023
New Activity as Percent of Total Half-Year Payments	1.6%	2.2%	1.2%	1.5%	1.1%	1.8%
Inactivity as Percent of Prior Total Half-Year Payments	0.5%	0.4%	0.6%	0.5%	0.5%	0.6%

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Source: NDIS internal administrative data

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6.6.2 The number of providers continues to grow, driven by unregistered providers

Figure 45 illustrates a comparison of new support coordination provider volumes by registration type from January to July 2021 to July to December 2023. It shows a consistent trend where the growth of new unregistered providers outpaces that of registered ones throughout the observed period.

Figure 45: New Support Coordination Provider Counts, January 2021 to December 2023

	Registered	Unregistered
January - June 2021	919	473
July - December 2021	1,096	460
January - June 2022	1,136	378
July - December 2022	1,376	429
January - June 2023	1,634	346
July - December 2023	1,815	366

6.6.3 Registered providers show more payment stability than unregistered providers

Assessing the stability of support coordination providers there is a pronounced distinction between the registered and unregistered provider market. Figure 46 shows the number of half years with payments, with providers split up by registration status. It also shows the percentage of total support coordination payments for each grouping as a portion of total registered and unregistered payments combined. This figure shows that approximately 38% of registered providers have consistently been active across the last six half-year periods, receiving 78.3% of total payments in the six months to December 2023, indicating a high degree of payment stability. Conversely, only about 6% of unregistered providers have maintained the same level of payment activity, accounting for 3.3% of total payments.

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Figure 46: Provider Continuity by Registration Status and Percentage of Total Payments. Registered Providers (Left) and Unregistered Providers (Right), January 2021 to December 2023

[Image not converted to Markdown – check the source PDF page for the actual content]

Source: NDIS internal administrative data

6.6.4 Providers with uninterrupted payment history support more participants

A distribution analysis (Figure 47) categorises providers by the number of participants they support, and the proportion of services claimed. Over the timeframe from January 2021 to December 2023, segmented into six-month intervals, the profile of registered providers has remained consistent, suggesting a stability in the scale at which providers operate. In the six months leading to December 2023, 15% (558) of active registered providers were supporting a single participant. Meanwhile, 46% (1,702) of active registered providers were servicing more than 20 participants, contributing to 94% of the total payments to registered support coordination providers within this period.

Figure 47: Registered Providers of Support Coordination Supports and Number of Participants Claimed from, January 2021 to December 2023

[Image not converted to Markdown – check the source PDF page for the actual content]

Source: NDIS internal administrative data

January - June 2021

July - December 2023

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6.6.5 Providers who become inactive typically claimed less and supported fewer than participants

Inactive registered support coordination providers received an average of $6,438 in payments during the half-year before ceasing activity. A majority (78%) of these providers claimed less than $5,000 in the same timeframe. Conversely, active registered providers averaged $137,842 in payments per half-year, indicating that inactive providers were claiming for lower amounts on average relative to new and existing registered providers. The payments data also suggests a variance in participant distribution between providers who continued to be active and those who became inactive. Active registered providers over the last three years serviced an average of 74 participants while inactive registered providers serviced an average of 6 participants during the half-year period before becoming inactive.

6.7 Disability Intermediaries Australia Benchmarking Survey

Disability Intermediaries Australia (DIA) submitted a benchmarking survey to the Annual Pricing Review (APR), gathering data from 1,386 intermediary service providers, including both Plan Managers and Support Coordination providers, categorised as registered and unregistered. Among these, 865 submissions were from support coordination providers, with 91% identified as for-profit organisations and the remainder as not-for-profit. It was noted a 24% increase in smaller providers participating in the survey compared to the previous year.

The benchmarking survey highlights concerns regarding static NDIS price limits since July 1, 2020, which have reportedly led some providers to cease operations or deregister, primarily affecting Level 2 and Level 3 support coordination. Despite these challenges, the broader data presented in the report indicates a substantial and continuous growth in the support coordination market. From 2021 to 2023, the number of providers significantly increased from 2,637 to 8,823.

Regarding employment conditions, most staff, including those interacting directly with participants and their supervisors, are reported to be compensated according to the SCHADS Award, covering 92% and 91% of the workforce, respectively. The survey reported a 10% increase in losses and a 24% decrease in profits from the previous year among providers. It documented mean operational overhead costs per hour at $19.34 for Level 1, $38.17 for Level 2, and $90.70 fopysior Level 3 support coordination. This is suggested to 37.2%, 55.3% and 93.3% for Support Coordination Level 1, Level 2, and Level 3, respectively (operational overheads divided by cumulative cost per hour before operational overheads).

The survey also reported other additional employment-related expenses include a 17.5% annual leave loading, accrual of 76 hours of personal leave annually, and an increase in the superannuation guarantee from 10.5% to 11% for the 2023-24 financial year. The survey indicated that the diversity in organisational structures

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among service providers does not correspond to significant differences in cost structures.

Provider Consultation Feedback

The NDIA received 55 submissions from providers responding to the consultation questions regarding support coordination. Approximately 75% of submissions indicated significant changes in service delivery costs over the past year. Submissions highlight a discrepancy between rising operational expenses—such as audit costs, wages, rent, and fuel—and the static NDIS price limits for support coordination. Providers emphasise the financial strain from increased audit expenses and operational costs without corresponding price adjustments.

Concerns over sustainability and the viability of services underscore the discussions, with fears that the quality and diversity of support coordination services may dwindle, potentially undermining the NDIS’ goal of ensuring participant choice and control. Additionally, providers report a marked increase in the effort required to navigate NDIA regulatory processes. This, coupled with funding inadequacies and workforce instability, including high turnover and the added stress of billable Key Performance Indicators (KPIs), compounds the operational difficulties facing the sector.

Participant Consultation Feedback

Feedback from NDIS participants on their experiences with support coordination services reveals a wide spectrum of satisfaction. According to a survey, 63% of participants expressed satisfaction, appreciating their coordinators for effectively connecting them with suitable providers and enhancing their access to necessary services. These participants valued the coordinators’ ability to navigate the complexities of NDIS services. However, 22% of participants reported dissatisfaction, attributing their discontent to the high costs, frequent changes in coordinators, and a lack of responsiveness, which sometimes led them to consider changing providers.

Discussion

This chapter has explored the growth and evolving landscape of the support coordination market from July to December 2023, marked by a significant increase in both the number of providers and participants utilising support coordination services. Notably, the market has seen a substantial rise in unregistered providers, growing from 2,637 to 8,823 over the past three years. Despite this influx of new entrants, registered providers still accounted for 82% of total claims, highlighting their important role in the ecosystem even as the number of registered providers has declined.

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The market is undergoing a transformation towards less concentration, evidenced by unregistered providers gaining a greater market share and the top ten providers experiencing a reduction. This shift is further supported by data from the HHI, indicating a decrease in market concentration.

Provider submissions and participant feedback underscore the rising costs of service delivery and the challenges in maintaining service quality under the current financial model. Such feedback highlights the complex interplay between cost management and service quality, particularly for Level 2: Coordination of Supports and Level 3: Specialist Support Coordination. These levels are crucial for detailed planning, case management, and crisis resolution, requiring providers to possess extensive knowledge and the ability to integrate supports across various sectors.

Recommendations

It is considered reasonable that support coordination supports currently determined by the Disability Support Worker (DSW) Cost Model, continue to be done so, including any applicable changes that occur for DSW supports.

Recommendation 8

The NDIA should index the price limits for Level 1: Support Connection services and Psychosocial Recovery Coaches services in line with the indexation of supports determined by the Disability Support Worker Cost Model in recommendation 1 on 1 July 2024.

Analyses in the chapter highlight that whilst the market for support coordination continues to evolve, there is no evidence to suggest that supply is not meeting demand. In light of significant upcoming reforms recommended by the NDIS Review, which aim to enhance service integration and improve participant outcomes, there is a strong rationale to mitigate potential market disruptions during this transformative period. Any changes to pricing at this point in time would be up for further changes until the reforms in the intermediary sector settle. On balance, it is not recommended to change the price limits of Level 2 and Level 3 support coordinators to ease undue disruption.

Recommendation 9

In alignment with strategic outcomes from the NDIS Review and recognizing the current period of significant reform, it is recommended that the NDIA maintain existing price limits for Level 2: Coordination of Supports and Level 3: Specialist Support Coordination.

Short Notice Cancellation Policy

Context

The NDIS short-notice cancellation policy intends to allow providers to recover costs faced from participant cancellations where costs are incurred within a reasonable timeframe. The existing policy, while designed to ensure providers meet their legal obligations to workers without financial detriment, may not fully reflect the varied and fluid operational landscapes in which these services are delivered.

In July 2022, the NDIA updated its short notice cancellation policy from 2 days to 7 days, for applicable NDIS supports, in line with the Social, Community, Homecare and Disability Services Industry Award 2010 (SCHADS Award). The policy allows service providers to claim up to 100% of the agreed fee for a scheduled appointment if it is cancelled on short notice. Short notice is defined in two main scenarios: if the participant does not show up within a reasonable time for the scheduled support, or if the participant cancels with less than 7 days’ notice. Furthermore, for supports intended for a group, if a participant cancels and cannot be replaced, the provider may bill for the cancelled attendance at the agreed rate.

Providers can claim for these cancellations directly from the participant’s plan, provided several conditions are met. These include:

• The support item being eligible for short notice cancellation claims as per the NDIS Pricing Arrangements and Price Limits,
• The charges comply with these pricing arrangements and limits,
• There is a pre-existing agreement with the participant allowing for such claims; and
• The provider was unable to find alternative billable work for the staff involved.

Claims for short notice cancellations must be submitted using the ‘cancellation’ option in the NDIS Myplace portal, using the same support item used for the actual service delivery.

7.1.1 The short notice cancellation policy aligns with the SCHADS Award

The purpose of the NDIS short-notice cancellation policy is to balance the costs incurred to service providers and value-for-money for NDIS participants. This is to recognise the financial and operational impact of cancellations on service providers, ensuring they can recover costs when services are cancelled without sufficient notice. This policy is designed to encourage participants to provide timely notice of cancellations, where possible, allowing providers to manage their resources effectively.

Additionally, the NDIS short notice cancellation policy attempts to safeguard the potential flexible needs of participants by setting clear expectations around

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• cancellation notices. By stipulating a fair and transparent framework for cancellations, this policy aims to foster a cooperative relationship between participants and providers. It also introduces provisions for monitoring and addressing frequent cancellations, emphasising the service provider’s duty of care towards participants.

The Fair Work Commission’s (FWC’s) updated the client cancellation requirements impacting workers employed under the SCHADS Award from 1 July 2022. The SCHADS Award, specifically clause 25.5(f)(v-vi), outlines how employers are required to handle client cancellations of services if they occur within 7 days of the scheduled date, and applies only to employees under the SCHADS Award.

• Employers can choose to either reassign the employee to other tasks for the scheduled hours or cancel the shift entirely.

In the case of a client cancellation, the employer must compensate the employee for the planned hours or arrange make-up time, provided the employee was notified at least 12 hours before the start of their shift. Make-up time must be arranged within six weeks of the client cancellation and in consultation with the employee, potentially involving work in other areas of the business. This provision was designed to be flexible for both employer and employee, allowing for adjustments to work schedules while ensuring employees are fairly compensated for client cancellations.

In practice, providers may often be able to rearrange a worker’s shift in accordance with the SCHADS Award, even with less than 7 days’ notice. This capability can reduce the financial consequences resulting from a client’s cancellation.

• Nonetheless, there may be additional costs incurred for ‘make-up shifts’ under the SCHADS Award, such as at a higher rate than the original service rate, particularly if shifts are changed from daytime to evening/weekend work, potentially leading to financial loss for providers.

It is also important to note, the NDIS short-notice cancellation policy is also applicable to NDIS supports that are not necessarily delivered by DSWs, assumed to be covered by the SCHADS Award, so do not have the same legislative requirements.

There is no legislative requirement in similar care and support sectors, the Aged Care Award 2010, and Children Services Award 2010. Further, for providers of therapy supports, there is no apparent requirement for “client cancellations” under the Health Professionals and Support Services Award 2020. This is the minimum Award conditions for many types of therapists delivering NDIS supports.

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7.2 Scheme Statistics

7.2.1 The number of short notice cancellations claims has grown

Since the revision of the NDIS short notice cancellation policy from July 2022, there has been a significant increase in the number of claims and corresponding Scheme expenditure associated with short notice cancellations. From the financial year 2020-21 to 2022-23, Scheme expenditure has nearly doubled (97%), from around $60 million to just under $120 million. Figure 48 shows this increase on a half yearly basis, comparing the total expenditure on cancellation claims against the overall expenditure for all supports delivered by registered providers.

Figure 48: Scheme Expenditure of Cancellation Claims Compared to Total Scheme Expenditure from July 2020 to December 2023

	$80 m	0.40%
	$60 m	0.30%
	$40 m	0.20%
	$20 m	i i	0.10%
	$0 m	0.00%

July - January - July - January - July - January - July - December June December June December June December mm Cancellation Claims ($)

Source: NDIS internal administrative data ——Cancellation as a Percentage (%) of Total Claims

The NDIA also analysed Scheme data by Modified Monash Model areas (MMM) that revealed no significant difference in cancellation rates between metropolitan and remote/very remote locations. This finding suggests that geographical factors may not be major determinants of cancellations, and thus does not warrant a policy consideration focused on location.

Therapeutic supports account for more than one third of all cancellation claims Figure 49 breaks down the cancellation claims by the top 4 registration groups, with ‘0128: Therapeutic Supports’ and ‘0118: Early Childhood Supports’ together accounting for 37% of the total in the six months to December 2023. These two registration groups, generally with workers not covered by the SCHADS Award,

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contrast with other registration groups such as ‘0136: Group and Centre Based Activities’ and ‘0125: Participant in the Community, Social and Civic Activities’. The latter comprises 31% of cancellation claims and have workers under the SCHADS Award requirements.

Other supports spread across fifteen other registration groups represent 32% of claims, indicating cancellations are common across various NDIS services. Frequency of cancellation claims of other registration groups are also rising over the observed period at a less rapid rate.

Figure 49: Trend in Cancellation Claims by Top 4 Registration Groups from July 2020 to December 2023

	Group/Centre Activities (0136)	Early Childhood Supports (0118)	Participate Community (0125)	Therapeutic Supports (0128)
July - December 2020	$4 m	$9 m	$3 m	$6 m
January - June 2021	$5 m	$10 m	$5 m	$7 m
July - December 2021	$5 m	$10 m	$8 m	$7 m
January - June 2022	$6 m	$14 m	$9 m	$8 m
July - December 2022	$7 m	$15 m	$13 m	$9 m
January - June 2023	$8 m	$16 m	$14 m	$10 m
July - December 2023	$9 m	$18 m	$15 m	$11 m

Source: NDIS internal administrative data

Consultation Feedback

There is no single approach to cancellation policies within the NDIS markets

Since the NDIA implemented changes to the short notice cancellation policy, feedback from participants and stakeholders through ministerial correspondence and the public APR consultation has highlighted the diversity in cancellation policies offered by NDIS providers.

Feedback highlighted varied levels of understanding among participants, some of whom only discovered the provider’s cancellation policy after being charged for the cancelled appointment. From responses to the participant consultation form, 78% of participants were aware their provider had a cancellation policy, 45% noted that they have different cancellation rules for different types of services they receive, underscoring the complexity within the diverse NDIS marketplace.

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From respondents to the provider consultation paper, Figure 50 depicts suggested short-notice cancellation policies from respondents. Over half of the respondents for DSW (52%) and Support Coordination (53%) short-notice cancellation policy claimed they have a 7-day policy. Whereas 76% respondents delivering therapy supports reported they have a short-notice cancellation policy of less than 48 hours.

Figure 50: Provider Submission Responses to Short Notice Cancellation Policies

7 days	72 hours	48 hours
24 hours	9am day prior	2:30pm the day prior
2 hours

One respondent to the provider consultation paper claimed their cancellation policy is different between NDIS participants and non-NDIS participants due to what is allowable. This is discussed further in section 4 of this chapter.

“This is different to non-NDIS participants and I will explain why. We are unable to charge for cancellations under HCP, workcover or DVA so don’t charge those clients. Our private clients we can charge up to 100% of the appointment cost if they fail to attend or cancel late notice if there is not a reasonable explanation for the failure to attend.”

Suggested strategies to mitigate short notice cancellation impacts on NDIS participants

The sector’s varied strategies for managing short-notice cancellations reflect an adaptation to the complexities of service delivery. Providers’ approaches range from employing sliding scale fees, which accommodate the intricacies of rebooking, to absorbing cancellation costs in specific scenarios to reduce the financial impact on participants. Many respondents suggested the integration of telehealth and other alternatives signifies a shift toward more flexible service models designed to maintain continuity of supports and adapt to the evolving needs of participants.

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example, two providers suggested mitigation strategies to assist managing short notice cancellations by participants through telehealth and other methods:

“This policy applies to all services. Our policy still allows for management waiving fee, such if cancelled appointment is able to be filled from waitlist. We minimise late cancellations with reminder 48 hours prior to better allow refilling of provider timetables. We also offer Telehealth options for some services to reduce need to cancel.”“As an alternative to a short notice cancellation, we offer telehealth appointments, or offer non-face to face services (if required) such as resource development or report writing. If these strategies are accepted, the cancellation charge is not applied…. We support Participants to achieve attendance at their appointments by providing SMS and/or phone call and/or email reminders, and implement various appointment scheduling strategies (for example, scheduling consistent times to reduce change).“Experiences of providers offer insight into the practical applications and implications of these diverse cancellation policies. For instance, a provider of DSW supports shared their initial adoption of a seven-day cancellation policy, and the subsequent negative feedback from participants, leading to a decision to revert to a more flexible two-day notice period:

“Two clear business day cancellation policy … did introduce the seven-day cancellation policy when it was initially announced, however there was a lot of negativities and complaints from participants we support, who found it unreasonable that they were expected to know seven days in advance that they were not able to make it to a particular support. [Redacted] reverted back to two days after roughly four weeks of using the seven-day policy.“This narrative underscores the importance of provider flexibility and responsiveness to participant feedback in policy formulation.

Another perspective comes from a provider of Therapy supports who suggested the critical role of their cancellation policy in business sustainability and service reliability:

“Our cancellation policy has a notification period of 7 days and charges the full rate for NDIS participants … The NDIS cancellation policy as per the price guide, to which we adhere, has actually saved our business. Many families cancel often with little to no warning. Again, the area we provide services impacts this. The seven day policy, seems extreme however we would not be able to run our business at all without this in place.“7.3.3 Providers tailor their engagement with participants to prevent cancellationsProviders appear to actively customise their engagement with participants to mitigate cancellations, recognising the importance of adapting to each participant’s unique

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The individualised approach extends beyond just scheduling flexibility; it involves a comprehensive strategy to identify and overcome barriers to attendance. A Psychology Provider emphasises the importance of tailoring their approach to each participant’s specific circumstances, especially in cases of frequent cancellations, where effective communication with care managers or house managers become important:

We tailor our approach to each individual participant based on their living or travelling circumstances. In instances of frequent cancellations, we typically engage in communication with the care manager or house manager to address the situation effectively.

Similarly, an Occupational Therapy Provider discussed the role of technology and personalised communication in promoting appointment attendance. This includes through text message, phone calls and email reminders, alongside strategies like scheduling appointments at consistent times.

Tailored engagement extended to encouraging participants to explore alternative ways of benefiting from therapy services when attendance at a scheduled session is not feasible. One Therapy Provider suggested a range of alternatives, including switching to telehealth, offering non-client facing activities, or developing supportive program materials, all tailored to the participant.

7.3.4 Technology

The integration of technology and personalised communication strategies was suggested to play an important role in minimising cancellations. Providers have developed reminder systems through text, email, or phone calls as effective tools to ensure that participants are both aware of and prepared for their appointments. A Therapy Support Provider noted the importance of flexibility in scheduling, facilitated by technology, to meet the varying needs of participants:

We send reminder text messages, we work with scheduling to ensure we are able to provide flexible appointment times that suit the participant needs.

A common approach involves the use of technology and personalised communication to reduce the likelihood of cancellations. Reminder messages via text, email, or phone calls have been identified as effective tools ensuring participants are aware of and prepared for their appointments:

We have multiple reminders automated on software via email and SMS.

For mobile appointments, I privately SMS all clients if not meeting at homes to arrange locations. This minimizes no shows, but not short notice cancellations.

Similarly, a Physiotherapy Provider implemented an automated reminder system, enhancing the effectiveness of mobile appointments by directly messaging clients to

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confirm location and time. This helped reduced the likelihood of no-shows, though it still does not prevent short-notice cancellations.

Beyond the use of technology to issue reminders, providers have adopted person-centred strategies to delve into underlying causes of frequent cancellations. This approach involves close engagement with participants and their support networks, exploring reasons behind cancellations and adapting service delivery approaches accordingly. Options like telehealth or rescheduling for more convenient times are considered. The Australian Physiotherapy Association highlights telehealth as a prevalent alternative, alongside other solutions like home exercise programs or using the time for other billable non-face-to-face supports, indicating a versatile approach to maintaining service continuity despite cancellations:

“Telehealth is the most mentioned alternative to short notice cancellations; other alternatives include home exercise programs. Some respondents also mention using the time allocated for cancelled appointments for billable non –face-to-face supports such as administrative tasks or report writing, assistive technology trials, liaison with care team, updating a home program, etc.”.

These insights provide insight into effort among providers that use technology not only for logistical coordination but also to foster a deeper understanding and response to participant needs. This ensures that services remain participant-centred and adaptable to their evolving needs.

Providers can have flexibility in their scheduling systems

Some providers have developed flexible scheduling systems to manage cancellations effectively, showing a preference for reallocating appointment times or adjusting staff duties. This adaptability assists providers managing their own costs alongside continuity of supports for participants. For example, some providers emphasise their efforts to reassign cancelled time slots to other clients, thereby avoiding the need to charge for short-notice cancellations. However, they also acknowledge the challenges of this approach, particularly when cancellations occur with little or no notice:

“We try to reallocate the time to other clients where possible to avoid having to charge clients for short notice cancellations. However, this is not always possible.”.

Moreover, an Early Childhood Therapy Provider highlighted their business process aimed at filling cancelled spots to prevent costs being passed onto participants, indicating the operational challenges faced when attempting to manage cancellations on short notice.

In one-to-one support scenarios, face-to-face is generally the primary mode of service delivery. In the case of a short-notice cancellation, if no alternative appointments are available, providers claimed they needed to seek creative solutions to use the time effectively. A provider of DSW supports mentioned:

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We only provide one to one face to face support so there is no alternative available. Where we pay staff for a cancelled shift, we try to utilise their time by requesting them to undertake some online training. At least using that approach they are getting some additional professional development.

By reallocating resources and focusing on staff development, many providers described adopting a proactive approach to handling client cancellations.

7.3.6 Understanding reasons for cancellations

Short notice cancellations can occur for several reasons such as logistical challenges or sickness. Insights from 20% of participant respondents reveal a wide array of reasons needing appointment cancellations, such as sudden illness, hospitalisation, or caring for sick children, highlighting the unpredictable nature of individual circumstances.

One participant highlighted the difficulty of predicting illness. Particularly when individual circumstances could fluctuate often, suggesting an unreasonableness for some, such as parents of children with high support needs, who are unable to foresee their ability to attend appointments well in advance. This sentiment was echoed across various responses, emphasising the need for flexibility:

“For Physiotherapy, it is 7 working days or full price is charged. (Honestly, how do you know 7 days out if you are going to be sick?)”

Participants express frustration with the wide range of notice periods required by providers, from just a few hours to several days, adding to the complexity of managing appointments. Some respondents claimed to have faced charges for cancellations under situations they felt warranted exemption, like hospitalization, leading to a call for more empathetic practices from providers:

“No consideration EVER shown for sick child or family deaths etc. they say they understand and then turn around and bill you.”\nDespite these challenges, some participants suggested providers can show understanding and flexibility. A participant mentioned that the sole trading provider they engage does not charge for cancellations due to emergencies provided they are informed in time, highlighting the diverse approaches among providers:

“My solo provider doesn’t charge for cancellations due to sickness or emergencies even if I let her know that morning. She requires 48 hrs notice for cancellation if it’s due to change of plan or something I know about beforehand.”\n

7.3.7 Participants experiences with cancellation policies vary depending on their service provider

Navigating cancellation policies presents significant challenges for participants, who encounter a confusing variety of requirements differing widely among providers.

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Notice periods can range from as short as 24 hours to as long as two months, creating a complex situation for those relying on multiple services. One participant highlighted the issue, noting the broad range of notice requirements:

Can be anywhere from 2 weeks to 24 hrs and has to be in writing which is not good for some.

This variance underscores the difficulty for individuals, especially those managing complex circumstances, who may unexpectedly need to cancel due to sudden illness or emergencies but find themselves penalized for doing so.

The confusion of differing cancellation policies is further deepened with some policies suggested to differ based on the reason for cancellation as well. That is, planned versus unplanned absences are treated with distinct rules, a distinction that was claimed to be arbitrary and unfair to those affected. One participant claimed the stark differences in how cancellations can be handled:

Different rules for planned reasons to miss a session (eg holiday, medical appointment, etc) versus if I am sick (which has a much shorter notice period).

This perceived inconsistency is further complicated when participants and providers cancel under similar circumstances, yet the consequences are not the same. One participant expressed their concerns on this difference, as it can impact their NDIS funding:

It ranged from 2 weeks’ notice to 2 months’ notice to get my file ready to pass onto my next support or service provider. With current services, if I cancel the service less than 48 hours before the support worker is due, I pay the full amount, but if they cancel or don’t show up, that is supposed to be ok.

Some participants suggested an inability to seek clarification or negotiate terms of support. There was some perceived lack of transparency and flexibility from providers that exacerbated these challenges:

Eight hours for OT and psychologist. The OT only requires 24 hours for private patients and has not responded to my email enquiry questioning the reason for the difference for participants.

It was suggested that there is a need for a short notice cancellation policy that considers the unpredictable nature of participants’ lives and circumstances, ensuring participants are not unduly impacted for circumstances beyond their control. Moreover, improving communication and transparency around these policies could significantly alleviate the confusion and frustration suggested by many.

Discussion

Analyses on NDIA-related short-notice cancellation claims does have its limitations. While some insights can be observed from NDIS cancellation claim data, there are limitations that prevent a comprehensive deep dive. These are:

• Notice period: The NDIA system does not currently capture the advanced notice period provided by a participant for cancellation claims (i.e., one day before or 5 days before).

• Limited reasons: The NDIA system prompts providers to select a cancellation reason from a list though this is not an exhaustive list of potential reasons. However, a significant portion of cancellations claims (70%) are classified as “Not Defined” or “Other”. This lack of specificity makes it difficult to understand the true driver behind most cancellation claims in the NDIS.

• No free-text field: The system does not offer a free-text field for providers to explain cancellation reasons beyond the predefined options.

Due to the lack of current NDIS administrative data for analysis, it is more reasonable to consider analysis of the marketplace and current practices for this policy.

Market analysis and efficiencies

This section examines cancellation policies across various government schemes in Australia, focusing on their similarities and differences with the NDIS.

Aged Care: A mature market with different practices

The most comparable sector for DSW supports is Aged Care, specifically the Home Care Package program within Aged Care. Home Care providers must be registered

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with the Australian Aged Care Quality and Safety Commission™ and can charge additional fees beyond hourly rates, such as care management and package management fees®.

Thus, providers delivering this program have more flexibility in setting prices, allowing them to potentially absorb some costs associated with cancellations. This is reflected in a sampling of Home Care Package providers cancellation policies, acknowledging this sample is not representative of the entire aged care sector. From a sample of 50 randomly selected Home Care Package providers that listed clear cancellation policies, 96% (48 providers) did not charge for cancellations if given more than 2 business days’ notice (Table 28). Most providers charged the full fee if the cancellation was within the notice period.

Table 28: Review of 50 Aged Care Providers Delivering Home Care Package Supports Cancellation Notice Periods

Required Notice to avoid cancellation charges	24 Hours or Day Prior	2 business days or less	More than 2 business days
Number of providers with this policy	41	7	2
Percentage of providers	82%	14%	4%

Other Government Funding Schemes

Table 29 compares cancellation policies against other government schemes, such as Medicare and Department of Veterans Affairs (DVA). Many other Government Schemes offer limited or no ability for providers to claim for cancellations. While

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some, like Medicare allow participant charges for non-attendance, this approach may not be feasible for NDIS participants due to the NDIS required to cover the reasonable and necessary support needs of participants and considering reasonable costs associated with service delivery.

However, it is important to note that unlike the NDIS, these schemes generally do not prohibit providers from charging cancellation fees directly to participants.

Table 29: Comparison of Other Comparable Government Funding Schemes and their Cancellation Policies

Scheme	Cancellations
Medicare	Will not pay
DVA	Will not pay
TAC	Will not pay unless fee schedule has specific items
ComCare	Will not pay (except for Medical Practitioners)
RTWSA	Will not pay (except for Medical Practitioners)
VOCAT	Will pay for no-shows by clients
Worksafe Vic	Will not pay (except for Medical Practitioners)
WorkCover Qld	Will not pay (except for Medical Practitioners)

As part of the APR’s Therapy Analysis, the NDIA received responses from 13 Commonwealth and State Schemes on their therapy pricing and arrangements such as cancellation policies. From these Scheme responses, only 2 of the 13 responses mentioned they allow for cancellation claims for some of their therapy supports. For further information on the schemes that participated, please refer to the Therapy Chapter of this report.

Market Cancellation Data through Website Scrapping

Following consultation feedback that suggested there was a segment of participants that were not be aware of their provider’s cancellation policy, the NDIA conducted a website analysis of 300 NDIS providers who claimed for a cancellation in 2022-23. These providers were randomly selected from 1,700 NDIS providers who made over $10,000 worth of claims for short-notice cancellation in Financial Year 2022-23. Noting, the NDIA does not mandate providers to publicly display their cancellation policies.

Findings from this sample of providers suggested a potential lack of transparency:

• Only 16% of providers had a clear cancellation policy directly accessible on their website. This means 84% had no explicit mention of their cancellation policy.

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• ∑ 12% offered downloadable terms and conditions, where only some included a clear cancellation clause.

Among the 49 providers with published policies:

• ∑ 80% did not claim up to the 7-day notice period, the majority of whom offered a 48-hour notice period.
• ∑ 16% had a 7-day cancellation policy.
• ∑ 4% differentiated policies between private clients and NDIS participants.

These findings suggest from the sample with published cancellation policies, there are many providers who offer a shorter notice period (48 hours) than the maximum allowable 7-day period. This supports a market that could potentially sustain a shorter notice period than the current NDIS short notice cancellation policy.

From this exercise, the NDIA consider there is a need for potential improved transparency regarding cancellation policies within the NDIS system. There is evidence from submissions to the APR that participants are only made aware of a provider’s cancellation policy after the fact. There is a need for clear cancellation policy that is not only balancing the needs of participants and costs of providers, but that is also communicated between both parties.

7.4.2 Provider practices

Use of Diverse Models and Technology

The NDIA operates in a diverse environment with a huge range of providers in terms of size, support coverage, access to technology, and levels of efficiency. This diversity has a clear impact on the application of cancellation policies and the management of scheduling and rostering systems.

Understanding rostering and scheduling

While related, it’s important to distinguish between rostering and scheduling:

• ∑ Rostering: assigning staff members to shifts.
• ∑ Scheduling: matches staff to specific participant appointments.

For therapeutic and nursing supports, a worker would be expected to deliver supports to multiple participants per shift. Cancellation of a participant’s appointment in these cases is unlikely to lead to a cancelled shift, as the other booked participants still require support. For supports of a longer duration, such as if a participant is receiving ongoing assistance throughout the day, a rostered shift might align with the scheduled support (i.e., supports delivered to participants with Supported Independent Living (SIL) supports).

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Mitigation strategies

Many respondents to the APR consultation suggested a range of mitigation strategies to limit the impact of cancellations for participants and their organisation. This included reminder messages to participants, options to change the appointment to telehealth or reallocating the time of the worker to other appropriate work or training.

Research strongly supports the use of reminders in reducing no-show or non-attendance for appointments56. While SMS is a common method, studies indicate no single notification method (SMS, Interactive Voice Response, phone, mail) holds a clear advantage over others.

The NDIA believes there are a range of mitigation strategies that could be applied to limit the need to claim for cancellations from NDIS participants. The NDIA acknowledges based on respondents to the APR that many providers do encourage and innovate with such practices to maximise participant support time and reduce business costs.

Understanding reasons for cancellations

Reasons for non-attendance can be varied, such as availability of transport, childcare, forgetting the appointment, or associated opportunity costs in attending, such as time and money. The previously mentioned studies also suggest that lead

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The time between bookings can be a good predictor of no-shows. Prior no-show history appears to be a good indicator of future cancellations. Other aspects of studies regarding reminders have focused on matters such as timing and content. One study showed a positive result from patients receiving messages related to the cost of their missed medical appointments to the institution.

However, there is a diverse needs and circumstances faced by NDIS participants. Some situations may be difficult to be foreseen well in advance, such as sudden illness. This is where the NDIA considers a need to have a potentially more flexible short notice cancellation policy where there may be a case for this, acknowledging the impact to the market.

Recommendations

The NDIA acknowledges providers’ right to recoup costs from cancellations impacting their operations but emphasises fairness for participants, providers, and taxpayers. While the current Cancellation Policy applies across all NDIS supports, this approach deviates from the original intent of the SCHADS Award (covering the cost of a support worker’s shift) and dynamics of other supports, such as the private therapy market (typically operating with 24–48-hour notice periods).

Through consultations with stakeholders, including service providers, participants, and peak bodies, it is clear to the NDIA there is a call for a short-notice cancellation policy that is sufficiently adaptable to meet the diverse realities of service delivery while ensuring access to supports for participants.

The NDIA needs to consider a balance in the short-notice cancellation policy for the market. One that allows providers sufficient ability to recover costs with incentives to work with the participants they are supporting to minimise the number of short notice cancellations that occur. Meanwhile, participants are afforded reasonable time to provide notice for cancellations considering unforeseen circumstances to minimise using NDIS funding to pay for supports they do not receive. This includes unexpected illness, urgent appointments, or changes in personal circumstances.

Providers delivering DSW-related supports may incur such costs when unable to redeploy employees to other work or set up a make-up shift for the employee. This is as these workers are generally under the SCHADS Award, which has a legislative requirement regarding client cancellations. This requirement is unique for employees engaged under the SCHADS Award in the care sector.

The NDIA considers that NDIS providers should generally be able to reschedule workers in line with the SCHADS Award to minimise the need to claim for cancellations from NDIS participants. However, this may not be able to be done in all situations (i.e., SIL supports).

It is important to note that providers who reschedule or find alternative work for their worker/employee should not claim for the short-notice cancellation from the

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The NDIA recognises the diversity of operational contexts in which providers operate, including potential costs that could be faced by providers to meet legislative requirements for their workers. It is important that the cancellation policy incentivises providers to minimise the cost of cancellations while also encouraging participants to provide as much notice as possible when cancelling services and supports.

Recommendation 10

The NDIA should retain the existing 7-day short notice cancellation policy for applicable supports determined by or derived from the Disability Support Worker Cost Model from 1 July 2024. Providers of Disability Support Worker supports must continue to make reasonable efforts to find alternative billable work for the staff involved.

For non-DSW related supports (non-SCHADS related), such as therapy services, there is no standardised legislative or Award requirement for client cancellations. This applies similarly to other comparable care and support services like Aged Care and Children’s Services. There are also limited cancellation policies in other Government funding schemes.

Through consultation and research conducted, it appears that the maximum of a 7-day policy may not be necessary for non-DSW supports. There is greater usage of a 2-day cancellation policy in the sector, particularly among therapy providers, which supports a potential for a shorter cancellation policy. 76% of provider respondents delivering therapy supports to NDIS participants suggest they already have a short-notice cancellation policy of 48 hours or less. This is also supported by website data analysis conducted by the NDIA, acknowledging the limited sample that had available data for analysis. The NDIA believes there are mechanisms and methods already being utilised by the sector to assist participants in limiting cancellations which could make the reduction in notice period feasible.

Recommendation 11

The NDIA should adjust the 7-day short-notice cancellation policy for non-Disability Support Worker-related supports to two clear business days from 1 July 2024.

Feedback from the Participant Consultation Paper

Context

The 2023-24 APR has an increased focus on participants to ensure that it includes the voices of both providers and participants. For the first time, the NDIA published a dedicated consultation paper to gather participants’ perspectives and sought participant feedback via an online form.

During the 2022-23 APR consultation process, the NDIA received 12 submissions from participants and their representatives. To improve the options available for participant engagement, the NDIA undertook a broader consultation campaign for the 2023-24 APR. This approach recognises that the NDIA puts participants at the centre of everything we do and that many of the ideas about how to make the NDIS better have come from the disability community.

The consultation questions asked participants about:

• How much they know about the current price limits.
• Their experiences in finding the best price for supports and services within these limits.
• How the price limits affect the quality of supports they receive.

The NDIA received 558 responses to the participant consultation questions, with most providing feedback through the online form.

This chapter summaries the feedback received from participants throughout the APR consultation process.

Overview of participant responses

The NDIA invited any participants, family members of participants, carers, and participant advocacy groups with an interest in NDIS pricing arrangements and price limits to make a submission to the APR. Consultation took place between 25 January and 17 March 2024. The participant consultation paper included a Plain English

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paper,°’ an accessible easy-read paper,°® and an online form. The NDIA received 546 responses to the online form, 10 responses to the Plain English paper and 2 responses to the easy read paper. The selection of respondents was not randomised and participants could choose which questions they responded to.

The NDIA promoted the participant consultation options through several channels including:

• NDIA website
• NDIA news update
• NDIS social media
• NDIS newsletter
• Participant First newsletter.°9

There are over 640,000 NDIS participants across the Scheme. The number of participants who responded to the survey represents less than 1% of all participants. Despite this, the responses provide important insights into participant experiences with pricing.

Table 30 shows the proportion of participants who responded to the consultation questions and how they choose to manage their NDIS funding. It includes a comparison to Agency data on how total Scheme participants manage their funding. Over 85% of participants who responded were self-managed or plan-managed, and a small number were Agency-managed participants. 8% of respondents were mixed-

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57 Plain English presents information in a way that helps others to understand the message the first time they read or hear it.

58 Easy Read combines text with layout and imagery to simplify and explain information.

59 Participant First offers an opportunity for participants, families, carers and people within the disability community to share their views about the best ways to improve the NDIS through completing surveys, joining focus groups or taking part in interviews

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managed and 2% reported that they were not sure how they manage their NDIS funding.

Table 30: Online Form Participant Respondents and How They Manage Their Funding

Ways to manage funding	Description	Percentage of survey respondents	Percentage of NDIS participants
Plan-managed	The NDIA provides funding in the participant’s plan to pay for a Plan Manager who pays providers, helps keep track off funds and takes care of financial reporting for the participant.	52%	62%
Self-managed	The NDIA provides the participant with funding so they can access the supports that will best help them pursue their goals.	34%	29%
Agency managed	The NDIA pays providers on the participant’s behalf.	4%	9%
Mix managed	The participant can choose a combination of the three options above. For example, they may choose to self-manage one part of the plan and have the rest managed by the NDIA.	8%	Not available

Source: Participant responses to online form; NDIS, NDIS Quarterly report to disability ministers 31 December 2023, p 49.

Note: 2% of respondents reported that they were not sure how they manage their NDIS funding.

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8.3 Participant awareness and perception of prices

8.3.1 Participants were asked about their awareness of prices

The NDIA is responsible for empowering participants to exercise choice and control. A key component of empowerment for participants is having access to information and tools to make an informed decision about the services they use, including the prices for those services. For this reason, the NDIA asked participants about their awareness of prices.

A high proportion of participants who responded to the online form reported that they are aware of prices and how to access information about NDIS price limits:

• 94% of participants reported that they know the price they pay for NDIS services and supports.
• 90% reported that they are familiar with the NDIS Pricing Arrangements and Price Limits (PAPL). This document assists participants and disability support providers in understanding how price controls for supports and services work in the NDIS.

8.3.2 Participants were asked if they pay the same price as a person who is

not an NDIS participant

The NDIA asked participants whether they pay the same prices for their services and supports as people who are not NDIS participants. Around 26% of participants reported that they pay the same price as non-NDIS participants, while 41% reported that they do not, and around 33% were not sure.

Participants who said that they do not pay the same price, were then asked to provide examples of the different prices their provider charges.

Most participants who reported that they do not pay the same price as non-NDIS participants provided examples of the prices they pay being higher:

“I go to the OT, on a sign it states $95 first consultation, $90 thereafter. I am charged $193.99 because I am on NDIS.”

“If I tell a cleaning provider that it is NDIS they charge me about 40% more supposedly for administration. If I pay direct and claim reimbursement it is about 40% cheaper per hour.”

“At a previous Physiotherapy clinic I was paying $105 for a 45 minute appointment, when they found out I was self-managed with NDIS for physiotherapy their price went to the full $193.99 and they stated they needed extra time to write notes and it was more complex to treat someone on the NDIS - yet for 6 months prior they had been treating me for the same issue.”

A relatively small number of participants provided examples of the prices they pay being lower than non-NDIS participants:

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“Services are cheaper if I am using NDIS. As a result, my provider is thinking of no longer treating NDIS clients.”“I pay less than someone who is privately charged for similar supports.”“

8.3.3 Feedback on whether prices are reasonable was mixed

The NDIA often receives feedback from participants through Ministerial Correspondence and other channels about concerns about pricing. To better understand participant views on and experiences with pricing, participants were asked whether they consider prices are reasonable. Participants were then asked to explain why they chose this answer.

Participant views varied considerably on whether the prices they pay for their services and supports are reasonable. About 42% of respondents reported that they agree or strongly agree that prices are reasonable, while 51% reported that they disagree or strongly disagree and 7% were not sure.

Figure 51 shows that agency-managed participants were slightly more likely to agree that prices are reasonable, while self-managed participants were slightly more likely to disagree that prices are reasonable. Overall, there was relatively little difference in perceptions of reasonableness across the different types of funding management for participants.

Figure 51: Summary of Online Form Participant Responses on Whether Their Prices are Reasonable

	Agency-managed	Plan-managed	Self-managed	Mix managed
agree/strongly agree	40%	35%	25%	15%
disagree/strongly disagree	60%	70%	80%	90%
I’m not sure	10%	5%	5%	5%

Source: NDIA analysis of submissions

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Participants who agree that prices are reasonable often stated that they are able to shop around and negotiate prices. For example:

• “I live in a very rural town. I pay the best prices I can for the services I need. I pay below the NDIS price caps but only because I plan manage my funding.”
• “I am charged much less than the NDIS price guide and the same rate as non-participants.”
• “I am self-managed so set a reasonable rate that is below the maximum rate.”
• “I am self-managed, have the capacity to shop around, negotiate and choose not to support providers who overcharge or use the NDIS price guide to set their prices.”

Participants who disagree that prices are reasonable often reported that they have different views about the reasonableness of prices, depending on the specific service or support. For example:

• “Some prices are reasonable and others aren’t.”
• “I think the maximum price for some services is far to generous. For example to employ a support worker day time weekday to help me access community and social activities can cost about $65 per hour. I think $65 is far too much for unskilled work to drive me to an event, wait and drive me home afterwards.”

Many participants also reported that they consider extra charges for travel or administrative activities to be unnecessary or too expensive:

• “The price would be reasonable if travel and paperwork were included, not charged separately.”
• “$200/hour (near enough) for allied health services + travel on top seems excessive.”
• “Providers charge ridiculous amounts of money. Everything is charged, even note writing 15 minutes after every therapy.”

How participants manage their funding and engage with providers on pricing

Many participants choose to self-manage or plan-manage to have more flexibility and control

The NDIA asked participants how they manage their NDIS funding for core supports and therapy supports and why they chose to manage their funding this way. Over 85% of participants who responded to the online form plan-manage or self-manage their NDIS funding. A key theme from participants who self-manage or plan-manage their NDIS funding is that they state they have choice and flexibility to negotiate reasonable prices from providers that meet their needs. At least 20 participants reported that they prefer to have the flexibility to use unregistered providers.

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Comments from participants who self-manage include:

Full control over who I employ or hire, much better value for money, ability to negotiate rates and conditions.

Because I can stretch my funding further in core supports by still paying a fair price, but I’m not governed by a “price guide”. My support workers are privately hired by me.

Comments from participants who plan-manage include:

To ensure that I have choice and control over providers but have the insurance that all my invoices are paid on time and I have guidance around my budget.

I can determine who I want and the price paid is fair and reasonable with some guidance from the plan manager.

Around a third of participants who are agency-managed suggested convenience as a reason for choosing to manage their funding this way, and four participants noted they prefer using registered providers. Three participants said that they agency-manage their funding because they would have difficulty with the other options.

8.4.2 Only 23% of participants say they discuss and agree on prices with their provider

Price regulation is in place for NDIS services and supports to ensure that participants get value for money in the supports that they receive. The NDIA sets price limits, which are the maximum prices that registered providers can charge NDIS participants for specific supports. Participants and providers can negotiate lower prices.

To understand whether providers give participants accurate information about the role of the price limits and the scope for negotiating prices, participants were asked how their provider sets prices for their services and supports:

• 38% said their provider tells them the NDIA decides what prices they have to charge.

• 30% said their provider has a price list with fixed prices to pay if buying services from them.

• 23% said they discuss the price with their provider and agree on the price they will pay.

• 9% were not sure.

Based on participant responses, it appears that participants are sometimes given incorrect information about the purpose of the price limits the NDIA sets. While providers are not required to charge at the price limits set by the NDIA, it appears that more than a third of participants have been told this is the case.

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Participants who discuss and agree on prices with their provider were much more likely to agree or strongly agree that prices are reasonable (71%). Participants who said their provider tells them the NDIA decides what prices they have to charge were much less likely to agree or strongly agree that prices are reasonable (20%).

The NDIA also asked participants how their provider tells them about price changes and policy changes for their services and supports. The most common reported method for communicating these changes was email, followed by letter, plan manager, SMS/text message and in-person.

Information and education for participants about the NDIS market

As discussed above, a key component of empowerment for participants is having access to information and tools to make a more informed decision about the services they use. The NDIA considers there is benefit in improving the tools available to participants to ensure they have access to accurate information about their rights as consumers.

Several participants described how they benefit from shopping around to find providers that best meet their needs and negotiating prices and service conditions that work for them. However, not all participants have been able to do this. Participants reported that some providers are not willing to negotiate and, in some cases, provide them with incorrect information about the role of the price limits. For example:

“All supports and services I come across that deal with mainly NDIS participants charge the maximum rate and they say that is the price that NDIS say they HAVE TO CHARGE, they don’t get that is the maximum rate and that NDIS really want them to charge less. A friend tried to negotiate with the same provider that I use and she told me that she thought it was rude of the participant to devalue her time.”

“Many support workers charge the top rate listed in the pricing arrangement and think that is what NDIS says they should be paid. Many of them don’t understand that it is a suggestion/ maximum price one can charge and they DO NOT allow negotiations.”

“As a self-managing participant I am supposed to be able to negotiate with providers. I am never given this opportunity. I am charged the highest amount possible. The idea of negotiation, particularly in areas where service providers are limited to a few, is just not realistic. Providers know there is an upper limit to what they can pay and they charge accordingly.”

Providers are allowed to charge up to the price limits. However, when providers do so, the NDIA considers that they should clearly communicate to participants that charging at the price limit is a business decision, not a requirement imposed by the NDIA. The PAPL states that “providers should not indicate in any way to participants

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that the prices that they charge are set by the NDIA“.60 Similarly, the PAPL notes that “the NDIA does not set the prices that providers charge”.61 When providers give incorrect information to participants about the role of the price limits, this may mislead participants and discourage them from attempting to negotiate prices for their services and supports in future.

For this reason, the NDIA considers it is important that participants are well equipped with accessible information about the price limits and their rights to negotiate with providers. A targeted capacity-building education campaign for both participants and providers about these rights, with relevant information published on the NDIS website in an accessible format could help to achieve this. Ultimately, timely and reliable information sharing will empower participants to make informed decisions and ease information asymmetries.

Multiple cross-agency initiatives have been established to improve outcomes for participants and to ensure that providers are doing the right thing:

• The Fraud Fusion Taskforce started in November 2022. It is a partnership between the NDIA, Services Australia and 14 other government agencies including the NDIS Quality and Safeguards Commission, the Australian Federal Police and the Australian Criminal Intelligence Commission. The Taskforce aims to improve how government agencies work together to quickly detect, resolve and prevent fraud, while reducing the impacts of fraud on NDIS participants.62
• The NDIS Provider and Worker Registration Taskforce will provide expert advice to Government on the best approach to overhaul the current

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60 NDIS Pricing Arrangements and Price Limits 2023-24, p 10. §1 NDIS, Explaining the NDIS Pricing Arrangements and Price Limits (PAPL), p 1. 62 NDIS, Fraud Fusion Taskforce, accessed 3 April 2024.

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registration system for providers, while maintaining choice and control for participants - as recommended by the NDIS Review.®

• The Fair Price Taskforce to crackdown on unfair price hikes for NDIS participants is now operational. The ACCC will chair the taskforce, together with the NDIS Quality and Safeguards Commission and the National Disability Insurance Agency. The NDIS Commission will tackle illegal overcharging of NDIS participants. The ACCC will focus on investigating and clamping down on misleading conduct, unfair contract terms and anti-competitive agreements that might impact NDIS participants, while supporting the taskforce’s work.®

Learnings from the participant consultation will be shared with the relevant taskforces to ensure that providers are giving correct information to participants about their rights and the role of the NDIS price limits.

8.6 How the NDIA has considered participant feedback throughout the APR

The NDIA has considered feedback from both participants and providers when making recommendations about the NDIS’s price control framework. The remaining chapters in this report include summaries of feedback received from participants and providers, and explain how we have considered this feedback when making recommendations. Two key areas that participants were consulted on include:

• Support coordination - The NDIA also asked participants about their experiences with support coordination, including their level of satisfaction with their support coordinator. Participant responses to these questions are discussed in Chapter 6.

®3 NDIS, New Taskforce to help improve NDIS registration, accessed 3 April 2024.

® Ministers for the Department of Social Services, Cracking down on overcharging of NDIS participants, 24 March 2024.

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• Cancellation policies - To better understand participant experiences with provider cancellation policies, the NDIA asked participants about their awareness of cancellation policies, as well as how these policies vary across their services supports. Chapter 7 discusses participant feedback on these issues in more detail and recommendations resulting from that feedback.

Appendix A - Feedback from the Provider Consultation Paper

Overview

The 2023-24 APR consultation commenced on 25 January 2024. Provider submissions closed AEST 11:59pm on 10 March 2024 and participant submissions closed AEST 11:59pm on 17 March 2024. The Provider and Participant Consultation Papers included a series of guiding questions.

A total of 912 submissions were received in response to the consultation papers. Of these, 559 submissions were in response to the Participant Consultation. Participant submissions are discussed in detail in Chapter 3.

The remaining 353 submissions were in response to the Provider Consultation Paper and were received from a range of stakeholders:

• ∑ 258 from a range of provider organisations
• ∑ 60 from employees/workers
• ∑ 15 from professional associations
• ∑ 13 from provider peak bodies
• ∑ 4 from advocacy groups
• ∑ 2 from workers unions
• ∑ 1 from an educational institution

Market environment and influences: changing economic conditions, business risks and vacancies

Adapting to changing economic conditions

The Provider Consultation Paper sought to understand the segment of the care and support sector provider organisations operate in. It also undertook to inform the NDIA’s understanding of the impact of recent economic conditions (e.g., inflation and rising interest rates) on providers, the primary business risks faced by them and how these risks are being managed, as well as vacancy rates (as a proportion of total planned workforce).

Providers A total of 217 provider submissions responded to the questions about economic conditions, business risks and staff vacancies.

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Almost all providers reported increases in costs. Providers highlighted general increases in wage costs in a highly competitive labour market, as well increases in insurances, rent, travel costs, utilities, and other operating expenses. Several providers attributed these increasing costs to reduced profit margins, and expressed concern about their ongoing financial viability as NDIS providers. Many providers noted that the NDIS price limits have not increased for a number of years.

Providers reported a range of approaches to adapting their businesses in response to these changing economic conditions, including:

• increasing prices to the NDIS price limit for NDIS participants
• increasing prices for non-NDIS clients
• adapting billing practices e.g. charging NDIS participants for services previously not charged for, such as preparation and travel
• adapting the services they deliver e.g. limiting the geographic area(s) in which they operate, reducing the frequency and types of supports delivered, providing services differently (e.g. use of tele-health), through to ceasing to provide select services altogether
• pursuing efficiencies from organisational restructures or increasing expectations of billable hours (i.e. increased utilisation rates)
• reducing investment, by deferring capital expenditure
• absorbing cost increases e.g. through salary freezes
• operating at a loss and/or cross subsidising losses through other revenue streams.

One provider stated that:

“Inflation and rising interest rates have impacted my business by a 20% rise, and I have had to respond by increasing my client intake, working before and after school and longer than 10 hours days, since increasing the rate for therapy has NOT been an option.”

Provider peak bodies

Provider peak bodies raised similar themes about challenging economic conditions where costs have increased, and profitability is reduced. Respondents noted that these challenges are likely to impact the quality of services offered by providers, with less investment in staff training and other quality-enhancing initiatives. It was also noted that many businesses are operating at a loss, which may lead to market exits.

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Professional bodies

Professional bodies also reported rising costs and financial pressures. It was noted that some providers who previously charged below the NDIS price limits, are now increasing their prices up to the price limits. Professional bodies reported instances where providers are considering moving to self-managed participants so they can charge above the price limits to cover their costs. A professional body reported that many providers are conscious of the impact of a challenging economic environment on participants and have sought to minimise any price increases by bearing the cost themselves.

9.2.2 Primary business risks

Providers

Financial sustainability was identified as the primary business risk by 64% of provider responses. This was raised when responding to questions about changing economic conditions.

Providers also raised challenges with staff recruitment and retention as a key business risk. Providers reported a shortage of practitioners, increasing wage costs and challenges with retaining staff due to competition from other sectors, as well as staff leaving to become unregistered sole-trader providers:

“The biggest risk to my business is that I will be unable to sustain a workforce to support NDIS participants due to the rise in expenses namely practitioner wages (including superannuation increases) and the cost to recruit quality candidates, whilst also holding onto quality employees.”

Providers also raised a wide range of other themes, including risks arising from the amount of time spent on NDIS administrative tasks, registration costs and uncertainty about ongoing reforms to the NDIS.

Provider peak bodies

Peak bodies raised concerns about the costs of NDIS registration and noted that some members report considering de-registering.

Professional bodies

Similarly, professional bodies also stated the administrative burden of NDIS registration as a business risk, as well as financial sustainability and uncertainty about broader changes within the NDIS. Professional burnout and delays in receiving payment for services relating to assistive technology were also raised as business risks.

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9.2.3 Staff Vacancies

Providers

Many provider submissions indicated they currently have vacancies. Reported vacancy rates varied considerably, ranging from less than 5% to more than 50%. High staff turnover was reported in many submissions, as well as broader challenges with recruitment and retention. Several providers reported an operating environment where staff leave to become independent/sole-trader providers or take up work in other sectors where they may receive higher wages. A number of providers reported increasing costs associated with salaries and wages to retain staff, or additional costs associated with recruitment (e.g., advertising and recruitment agency costs). For example:

“We have experienced a significant staffing shortage over the past 18 months. Our workforce operating across disability support and community aged care support has reduced from 70 staff to 50 staff over this time. Like many other industries the disability and aged care sector has been hit hard by staffing shortages, the impact of this has been harder still in rural areas where there is a smaller population to draw from and a lack of transport and housing to attract people from out of the area.”#### Professional bodiesProfessional bodies reported a wide range of vacancies among their members, ranging from no vacancies to up to 80%. It was also noted that in some cases, even though their members have vacancies, they have ceased recruiting due to difficulties with finding staff.

9.3 Disability Support Worker (DSW) Cost ModelThe Provider Consultation Paper sought stakeholder views on the DSW Cost Model assumptions about organisational overheads and operating costs. Providers were also asked about impacts of the 15% wage increase under the Aged Care Award that took effect from 30 June 2023. A total of 79 provider submissions, five provider peak bodies and one union organisation responded to questions about the DSW Cost Model.

9.3.1 Alignment of Disability Support Worker Cost Model assumptions with provider’s corporate and operational overheads#### ProvidersAlmost all provider submissions to the DSW questions noted that the assumptions in the DSW Cost Model do not reflect their actual costs. Only 2 of the 79 submissions from providers indicated that the model’s assumptions align with their costs.

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Provider submissions raised concerns about financial viability under the model’s costings, suggesting it does not reflect actual costs and requires providers to absorb cost increases.

The cost model does not fully account for the complete cost of a billable hour of support, considering base pay, shift loadings, leave entitlements, salary on costs, employee allowances, operational overheads (including supervision costs, utilisation costs, and workers’ compensation costs), corporate overheads, and margin.

Many providers reported that their operational and corporate overheads are generally higher than the percentage assumed in the DSW Cost Model. Key reported differences include:

• worker’s compensation rates and insurances
• costs associated with utilisation rates, a casualised workforce and in some cases, a reliance on agency staff
• general operational overhead percentages exceeding levels assumed in the DSW Cost Model
• quality and safeguarding activities, including registration and audit costs.

The one size fits all approach does not recognise the different living environments, diversity, and complexity of supports across participants in the scheme. The price limit is the same for a sole trader delivering in-home support as it is to for a shared 24/7 living arrangement irrespective of the number of people and their needs, and the complexity of support.

Provider peak bodies

Ability Roundtable provided its Financial and Workforce Benchmarking analysis, which was undertaken in conjunction with 63 DSW registered NDIS providers. A mix of for-profit and not-for-profit providers participated, from both metropolitan and regional areas.

For the organisations included in the benchmarking analysis:

• average profitability was reported at -2.1%.
• over 60% of respondents reported three years of consecutive losses since the 2021-22 financial year (data showed a median loss of 5.9% in 2021-22 and 4.9% in 2022-23).
• there is a 10.9% variance between the DSW Cost Model and actual reported costs to deliver support.

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“there is a growing gap between the NDIA DSW Cost Model assumptions and the actual cost of service provision”.

Other peak bodies reiterated that the DSW Cost model does not align with operational and organisational overheads, calling for increases in core supports delivered by DSW.

“Cost model does not take into account the funding nature with donations or reserves, complexity of services provided, provider organisation size or quality and safeguarding requirements.”

Unions

The Australian Services Union stated there needs to be clearer rules regarding pay and classifications, portable entitlements to paid and other types of leave and sufficient paid time in rosters for training. Similarly, the Health Services Union highlighted a lack of clarity in the current model for how the NDIS price limits for work performed before and after a sleepover.

9.3.2 Range of SCHADS Award classifications under which staff are employed and distribution of permanent full time, part time and casual employment

The Provider Consultation Paper asked about the range of SCHADS Award classifications under which provider organisations employ DSWs and how they are distributed across permanent full-time, permanent part-time and casual employment.

Providers reported a wide range of SCHADS Award classifications from Level 1 to Level 8. For example:

“We have SCHADS employees from level 2 through to level 6, with one manager at level 8.”

“In our organisation DSW are generally paid at level 2.4 or Level 3. Service coordinators at level 4.2.”

The proportion of reported DSWs employed casually ranged from 12% to 100%. About half of provider submissions reported that 70% or more of their DSW workforce is employed casually. Several providers responded that DSWs prefer to work casually, as they get paid more and have more flexibility, even if it is at the cost of paid leave.

Several responses highlighted the need for the cost model to reflect the actual costs related to shift work, leave loading and public holidays.

“Reasons cited for [DSWs preferencing casual employment conditions]: pursuit of higher salaries, more flexibility. This also comes with additional cost overheads associated with re-rostering required for a more transient workforce.”

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assumptions of the DSW cost model are based on a permanent worker in a highly casualised workforce.

9.3.3 Impacts of the Aged Care Award 15% wage increase from June 2023 on recruitment and retention of Disability Support Workers

Providers

Provider submissions reported mixed impacts from the 15% increase to the Aged Care award, with some providers describing no tangible impact and others experiencing significant workforce challenges. Many providers reported general challenges with finding suitable workers with the right skills and experience. Other providers reported that the Aged Care Award increase has put upward pressure on wages, with many of these providers reporting paying above-award wages to attract DSWs. It was reported that the upward pressure on wages contributes to existing workforce challenges with high turnover rates and associated recruitment costs, as well as competition from staff becoming independent DSWs.

The increased wage and subsequent increased appeal of the Aged Care sector has made it even more difficult to attract employees to the Disability sector. There are greater opportunities for them to gain Permanent F/T employment in the Aged Care sector.

Competitiveness in wages has notably increased since the 15% wage increase in Aged Care in July 2023.

65 In March 2024, it was announced that aged care workers will receive a further increase of between 18.2% and 28.5%, inclusive of the 15% already ordered, depending on their skill and qualification level.

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Therapy Supports

The Provider Consultation Paper asked several questions about providing therapy supports, including changes in the costs of delivering services and questions about the differences between providing therapy supports to NDIS and non-NDIS clients.

There were 178 provider submissions received relating to therapy supports, 13 from professional bodies, one from a union and a small number from provider peak bodies. Through the APR online form and Participant consultation paper, 142 participants also provided feedback on therapy supports.

Changes in the costs of delivering services

The Provider Consultation Paper asked providers about significant changes in the costs of delivering Therapy support services.

Providers

About 87% of provider submissions reported increases in the costs of delivering therapy supports and services. Providers noted increases in wage costs (including increasing staff wages, keeping up with Allied Health awards and professional development costs) and costs associated with recruitment and retention. Providers also reported increases in business expenses such as rent, utilities, office supplies, insurance, workers compensation premiums and travel expenses.

Provider peak bodies

Ability Roundtable responded to the consultation questions on therapy supports and included an updated Allied Health Cost Model for NDIS-funded services from Deloitte Access Economics. The model estimates the respective services costs of 13

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The model indicates that the current NDIS price limits are lower than the actual and projected costs of delivering therapy supports:

• There is a 12.9% difference between the projected fully loaded cost to deliver an hour of therapy supports and the current NDIA Price Limit for the 2024-25 financial year for the four major allied health disciplines.
• For Psychology Services, there is a 16.6% difference between the fully loaded cost to deliver an hour of Psychology supports, when compared to the current NDIA Price Limit for the 2024-25 financial year.

Professional bodies

Allied Health Professionals Australia submitted that the price limits for therapy should be raised to reflect cumulative indexation since 1 July 2019 and suggested that from 2025, price limits for therapy supports should be automatically indexed.

Allied Health Professions Australia described rising business costs (e.g. wage market rates, rent and utilities, supplies, fuel, consumables and equipment, travel, insurance and other operational expenses).

“Our members’ therapy support businesses tend to operate at a small scale, and they therefore have limited infrastructure and resources and operate on thin margins. There is little possibility of further ‘efficiencies’ within small and solo practices, without compromising on the amount or quality of service.”

Similarly, Australian Physiotherapy Association noted that its members find themselves struggling to balance the need to support their staff in a context of rising cost of living by increasing wages while trying to keep their own costs under control.

66 These participating provider organisations represent an equivalent of 18% revenue across the therapy supports market.

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9.4.2 NDIS providers offering support for early childhood supports and to non-NDIS clients – prices, appointment durations and fee-setting considerations

The Provider Consultation Paper asked providers if they offer therapy supports/early childhood supports to non-NDIS participants. Providers were asked about the proportion of NDIS participants and non-NDIS participants they service, the typical duration of appointments, and if there are variations in prices. Providers were also asked how they determine the hourly rate charged for NDIS participants and what factors they consider when setting different rates.

Providers

The majority of provider submissions responding to this topic reported providing therapy support services to NDIS clients and other segments of the care and support economy (such as private clients or other insurance schemes). The proportion of NDIS participants serviced by these participants ranged from 25% to almost 100%, with more than half of these providers having a client base that was 70% or more NDIS participants.67

Appointment durations reported by providers were in many cases the same for NDIS participants as non-NDIS clients. Many providers explain that appointment durations are tailored to the needs of a client, regardless of whether they are an NDIS participant or not. Other providers reported differences in appointment duration due to the complexity or reporting requirements for NDIS participants, and a small number of providers indicated that they billed NDIS participants for this non-face-to-face time.

“Our appointment length is determined in accordance with the principles of evidence-based practice, considering a client’s needs/goals, family commitments and research evidence as to the intensity and frequency of intervention. Therefore, there is no

67 Noting that some providers support only NDIS participants.

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distinction in appointment duration based on whether a client is an NDIS participant or private client.

“30 or 60 minutes non-NDIS. 60 minutes for NDIS clients who are usually more complex with multiple co-morbidities and increased liaison time with involved parties including other therapists, SC, equipment suppliers, builders etc.”

Provider submissions outlined a range of pricing practices. Most providers reported charging NDIS participants at the price limit, while a small number reported charging below the price limit.

Many of these providers charge non-NDIS participants the same fees as NDIS participants. Other providers reported a price difference between NDIS participants and non-NDIS clients, with some charging more for NDIS participants and some charging less. Reasons for charging different prices varied widely. For example, some providers reported:

• NDIS participant complexity or additional administrative costs associated with providing services to NDIS participants as a reason for charging NDIS participants more.

• The lack of change in NDIS therapy support price limits over the last five years as a reason for charging non-NDIS clients more than NDIS participants.

Professional bodies

Feedback from professional bodies relating to differences in appointment durations was mixed. For example, the Australian Psychological Society stated the median duration of psychological appointments for its members is 60 minutes for both NDIS participants and non-NDIS clients.

The Orthotics and Prosthetics in Australia noted that while some considerations for fee-setting are the same, there are also NDIS-specific aspects:

“The main difference is the report writing component for NDIS participants which is significantly more time burdensome and almost triple what is required by most non-NDIS clients.”

9.4.3 Unique costs in providing early childhood supports for NDIS participants

The Provider Consultation Paper asked providers about unique costs of providing early childhood supports for NDIS participants.

Providers

Providers outlined a range of unique costs of providing early childhood supports, with 85 (or 33%) of provider submissions responding to this question. Most providers

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This group of NDIS participants is described as more complex compared to other early childhood clients who are not eligible for supports under the NDIS.

When describing early childhood supports for NDIS participants as more intensive and requiring more time, the following additional activities and costs were noted:

• Collaboration and liaison as part of team-based approaches, with an appointed ‘Key Worker’
• Delivering supports in natural environments, such as at home or in school settings, which requires travel that can exceed established caps
• Specialist skills and professional development needs, often resulting in a need to pay higher salaries
• Mandatory reporting obligations, such as writing reports related to funding allocation decisions, risk assessments, reporting to the NDIS Safeguards Commission and making Child Safe notifications.

Professional bodies

Professional bodies noted similar costs of providing early childhood supports for NDIS participants. For example, the Australian Physiotherapy Association described liaison and communication with the care network, support to the family, the expertise and complexity required, extended appointments, the service environment and administrative load. Dieticians Australia also noted other unique considerations when providing early childhood supports, such as the requirement for specialized training materials and resources, and tools designed specifically for young children with disability:

68 Under the eight principles of best-practice early childhood intervention, a family works together with professionals to form a team around the child, communicating and sharing information, knowledge and skills. One main person, called a key worker, works with the family. NDIS, Early Childhood Approach — a guide for professionals, p 4.

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Many children with disability require specialised nutrition and dietetic support. The progression can be significantly prolonged, some requiring lifelong assistance. This necessitates a flexible and long-term funding approach, acknowledging complex feeding needs of each individual child.

9.5 Support Coordination

The Provider Consultation Paper asked support coordinators if there have been significant changes to the costs of delivering services over the past 12 months.

About 55 (or 21%) of providers made submissions relating to support coordination, as did a small number from provider peak bodies and professional bodies.

Providers

Most support coordination providers reported increases in the costs of delivering services. Common themes from those submissions include that operating costs have increased (such as wages and salaries, rent, fuel and insurance), while NDIS price limits for support coordination have been held constant for several years.

Many providers noted that they face difficulties in attracting and retaining suitable staff, reporting that there is pressure to increase wages to keep up with the rising cost of living and to remain competitive with comparable positions in similar industries. Several providers described doing work that is often unbilled but necessary, which they consider is not sufficiently accounted for in the current price limits for support coordination, including:

• activities related to onboarding new clients for support coordination (contacting the NDIA, accessing portals, understanding the client’s needs, executing service agreements and doing risk assessments).

• activities associated with transitioning to the new PACE portal.

• administrative activities when a participant dies.

Other providers noted that because the price limits have not kept pace with rising costs, their financial sustainability is under pressure.

Provider peak bodies

Peak bodies raised concerns about the current price limits constraining the quality of support coordination services and noted that the price limits have not increased in recent years. Peak bodies also raised concerns about the price limits not sufficiently accounting for the amount of non-face to face time support coordinators incur.

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Unions

The Health Services Union noted that the NDIS Review has recommended phasing out support coordination and introducing navigators. Until navigators are introduced, the Health Services Union suggests that transitional increases to support coordination price limits are critical to ensure support coordinator wages keep up with inflation and increased costs.

Cancellation Policies

The Provider Consultation Paper asked several questions about provider cancellation policies, including:

• What is your cancellation policy for NDIS participants? Is it different for non-NDIS clients? If so, why?
• How often do you face short-notice cancellations or no shows and on average and how frequently do you claim for these instances monthly? What approach does your organisation take when a participant has an unusually high frequency of cancellations?
• What service offering does your business have as an alternative to short notice cancellations?

Of the 353 provider submissions received, 121 (or 34%) responded to questions relating to cancellation policies, frequency of short-notice cancellations and alternative service offerings aimed at reducing cancellations.

Provider variances in cancellation policies for NDIS participants and non-NDIS clients

Providers Most provider submissions reported that they have no differences in their cancellation policies for NDIS and non-NDIS clients, with a small number of providers reporting that their cancellation policy is different. The majority of therapy support providers described adopting a 2-day cancellation policy rather than the 7-day policy. Providers noted that 48-hours is an industry standard across the Allied Health sectors, and that they do not want to lose clients by adopting a different policy. In general, there was wide variation in reported cancellation policies, with the most commonly cited cancellation policies being 2-hours, 24-hour or 72-hours.

“Our cancellation policy has a notification period of 48 hours and charges 90% of fee for NDIS participants. It is not different for non-NDIS participants, except in exceptional circumstances (family emergencies eg, hospitalisation, natural disasters, extreme weather events, significant financial hardship).”

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Provider peak bodies

Provider peak bodies reported favouring retention of the current 7-day cancellation policy arrangements. Peak bodies noted that under the current SCHADS Award, payment to employees is required for cancellations within 7 days. Peak bodies noted that providers try to find alternative work for the employee, but often this work is administrative and unbillable because existing billable services are usually already rostered to other employees.

Professional bodies

Provider professional bodies described the diversity of cancellation policies across the sector. A large peak body reported that a third of their members adopt a 24-hour or 48-hour cancellation policy. About 15% of their members stated they do not have a cancellation policy, as cancellations are very infrequent.

Unions

Submissions from Union organisations representing the DSW workforce suggested the 7-day cancellation policy helps ensure retention of the workforce and assists to increase participants’ choice of workers.

Frequency and average of short-notice cancellations and monthly claim averages

Providers

There was considerable variation in reported frequencies of short notice cancellations and monthly claim averages. It was noted that seasonal weather impacts the frequency of cancellations (e.g., the winter flu season brings a higher rate of cancellations).

Provider peak bodies

The Australian Psychological Society noted that cancellations by NDIS participants were relatively infrequent, with two-thirds of members reporting that they occurred in less than 10% of scheduled appointments. A further 29% noted that they occurred occasionally, between 10–30% of scheduled appointments. Other provider peak bodies also noted that short notice cancellations are relatively infrequent, with some reporting less than 10% frequency.

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9.6.3 Provider approaches for unusually high frequency of cancellations and alternative service offerings to reduce cancellations

Providers

Most providers reported that they try to provide participants with a range of different alternative service offerings when they need to cancel their appointment, such as telehealth, arranging a home visit or re-booking the appointment. Several providers also describe sending SMS text messages and appointment calendar reminders to participants the day before an appointment to help reduce the frequency of cancellations. In addition, most provider submissions acknowledged that the unique needs of each client need to be considered when determining a suitable alternative.

Alternatives MUST relate to the best practice for that family and child…switch to telehealth. In the early years, children getting sick is a regular reason for cancellations. Telehealth may not be an option…We offer other non-client facing activities in the same timeslot, development of program materials, complete upcoming service summaries and reports for funding reviews, create supporting therapy resources for the school or home or use the time to collaborate with other team members, teachers etc.

Professional bodies

Provider professional bodies stated their members offer telehealth services, phone services, or other non-face-to-face services as an alternative to charging a cancellation fee. These alternatives include using the cancelled appointment time to develop resources (e.g. visual aids and materials), write reports, reach out to the family to offer support, liaise with stakeholders and arrange meetings.

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National Disability Insurance Agency

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NDIA Board Meeting of 27 March 2024 - 6. Corporate Plan Key Activity 3: Improving participant experience and outcomes with a financially sustainable NDIS

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The contents of this document are OFFICIAL: SENSITIVE

Board meeting: 27 March 2024

Agenda Item: 6.2

Agenda Item: Annual Pricing Review updates & considerations Paper Type: For Discussion SLT Sponsor: David Gifford, Scheme Actuary Link to Corporate Plan: Key Activity 1: Improve participant experience and outcomes with a financially sustainable NDIS as the Annual Pricing Review process helps ensure a sustainable provider market to deliver supports to NDIS participants.

Purpose

To provide an update on key considerations within the Annual Pricing Review (APR) including concerns raised by stakeholders relating to the Disability Support Worker (DSW) Cost Model (the “Model”).

Recommendation

That the NDIA Board notes the APR considerations.

Background

3.1 The NDIS Review released their final report in December 2023. One of the recommendations from the NDIS Review is to transition the NDIS pricing functions to the Independent Hospital and Aged Care Pricing Authority (IHACPA). This transition is intended to increase transparency and independence of price setting, and to achieve better alignment with the broader care sector.

3.2 Furthermore, the recommendation for the Australian Government to lead a comprehensive review and refinement of the current Pricing and Payments Framework signals an anticipation of substantial structural reforms in the medium to long term.

3.3 The scope of this year’s APR is narrowed, aiming at addressing immediate market needs and ensuring the continuity of supports for participants. It recognises the broader reform initiatives recommended by the NDIS Review and Disability Royal Commission. The APR will focus on DSW supports, therapeutic supports, support coordination and the short-notice cancellation policy.

APR Update

4.1 The 2023-24 APR consultation commenced in January 2024. In addition to the provider focussed consultation paper (consistent with previous APRs), a participant focussed consultation paper has been released for the first time. As of 4 March 2024, the APR has received 710 submissions — a majority (508) coming from participants and representatives.

Therapy supports: Initial analyses indicate the number of active registered providers has decreased (a 16% reduction in the 6 months to December 2023 compared to a year ago), with a greater increase to active unregistered providers. Preliminary findings on the