NDIA Accountability Project

Tasmania’s response to the NDIS Joint Standing Committee Inquiry – Market Readiness

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Tasmania s response to the NDIS Joint standing Committee | iy — Market

Table of Contents

INTFOCUCTION ……cecceceececeeceececseseenecerenenecseccessnsersesensastenseeaseasansaeens 3 Summary of key NDIS Market Issues - TaSmania………….::c0scese0e 3 The transition to a market based system for service providers….5 Participant readiness to navigate new Markets……….cccssessssseseeees 8

The development of the disability workforce to support the EMEFGiNg Market ………cccccceccececeususeeueeueuecesasseccucecaneeeesaceeurerates 10 The impact of pricing on the development of the market………. 11 The role of the NDIA as a market Steward …………ccccececeeeececeeeees 13

Market intervention options to address thin markets, including in remote IndigenOUS COMMUNITICS……………cceccseceeeereeecneeeeeseeeesans 14

The provision of housing options for people with disability, with particular reference to the impact of Specialist Disability Accommodation (SDA) supports on the disability housing market

The impact of the Quality and Safeguarding Framework on the development of the Market…………ccccscessecsersesseseuseerencuenesaneeesess 17

Provider of last resort arrangements, including for crisis ACCOM MOAATION……..00ccceececceceecaececcuteeceecuecetseruseesaeserseteeseesesanes 18

Tasmania’s response to the NDIS Joint Standing Committee Inquiry — Market Readiness

Introduction

Tasmania ts undertaking a state-wide age-based approach to transition to the full-scheme National Disability Insurance Scheme(NDIS) which commenced with the July 20 | 3-jJune 2016 NDIS trial for young people aged between |5 and 24 years of age.

From July 2016, the scheme was progressively made available to 12 to 14 year olds, 25 to 28 year olds, and 4-11 year olds, with the NDIS now being made available to 29-34 year olds from | January 2018. From | July 2018, the NDIS will be progressively made available to children aged 0 to 3 and adults aged 35 to 49, then to 50-64 year olds and by | July 2019, the NDIS will be available to all eligible Tasmanians.

A key consideration of Tasmania’s statewide rollout approach was to ensure that participant intake would be sustainable for the National Disability Insurance Agency (NDIA) providers and the Australian and Tasmanian Governments. Each year of the transition to full-scheme from 2016, the number of Tasmanians entering the NDIS was planned to double as new age cohorts entered every six months, meaning that:

  • |,139 Tasmanians participated in the NDIS trial;
  • |,059 people joined the NDIS in 2016-17;
  • an estimated 2,632 people are projected to become participants in 20! 7-| 8; and
  • an estimated 5,713 people are projected to become participants in 2018-19.

As at 3! December 2017, 2,931 Tasmanians had entered the NDIS. By July 2019, 10,600 Tasmanians are expected to be NDIS participants.

Summary of key NDIS Market Issues — Tasmania

  • Traditional providers of specialist disability services accustomed to block funding may lack the scale or operational capability to transition to the market based system.
  • Innovative payment solutions may need to be developed to enable smaller transport services to provide services to NDIS participants whose funds are managed through the NDIA.
  • Careful market design will be required in the delivery of school transport services to facilitate choice and control choice for participants, while enabling safe and reliable delivery at a sustainable price.
  • Tasmania’s relatively small and dispersed population means that providers find it challenging to provide viable services to regional areas.
  • The number of providers registering for NDIS in Tasmania is growing, but a shortage of providers in rural and North West regions of Tasmania is evident. Less than half of registered providers have commenced delivering services. Low plan utilisation rates are a possible indication of gaps in the range of supports sought by participants.
  • More detailed and more regular NDIA market data is required to assist providers to respond to likely participant demand. The NDIA has the most comprehensive market data, and through its Market Position Statements is best placed to assist providers and governments to identify and remedy workforce challenges.

Tasmania’s Response to the Joint Standing Committee Inquiry — Market Readiness

Tasmanian providers are raising concerns about NDIS capped pricing being inadequate to meet the costs of transition. Tasmania supports the recommendation of the Productivity Commission Report into NDIS Costs (October 2017) to establish an independent price regulator.

Any market intervention strategy developed to address thin markets should include a more flexible approach to pricing of supports, including direct commissioning, in order to ensure that supports are guaranteed, especially where participant safety is concerned and to ensure services are able to be delivered to participants living in rural and remote areas.

It would appear that current NDIS pricing for mental health services is insufficient to provide for service provision within a recovery framework, as is currently provided by the Tasmanian Goverment.

The Tasmanian Government supports the Productivity Commission’s recommendations (October 2017) concerning thin markets. Consideration should be given to direct commissioning in order to ensure that required supports are guaranteed.

It will be challenging to meet the workforce demands of full-scheme NDIS. The workforce required to support full-scheme NDIS in Tasmania is estimated to be almost double the 2016 levels.

Some participants may need more support and advice to navigate the complexity of the market system. The role of Local Area Coordinators (LAC) and Support Coordinators will be a critical component to the success of the new participant pathway.

Participants need more certainty about the availability of NDIS transport supports for social and recreational activity.

To encourage investment in Specialist Disability Accommodation (SDA), the NDIA should provide clearer information for potential SDA suppliers including in relation to SDA demand and supply.

Tasmania faces the challenge of assisting the sector to meet the requirements of the national Quality and Safeguarding Framework, while maintaining an effective service system. The quality assurance certification requirement, which will result in additional costs for Tasmanian disability providers proposing to deliver higher-rsk supports is of particular concern.

It may be difficult to find transport providers, especially in rural areas, that are willing and able to manage the transition to an NDIS regulatory framework and payments system.

It is critical to the provider of last resort approach that, particularly for people with high complex needs, but also in some cases for people in rural and regional areas:

  • There ts a single referral point for crisis situations.
  • There is the capacity for immediate supports to be commissioned in crisis situations.
  • There be maximum flexibility in plans to be able to respond to changing needs, including sufficient hours of support coordination.
  • the NDIA review the support coordination role and the level of experience and skill required to support and coordinate services.

Tasmania’s response to the NDIS Joint Standing Committee Inquiry — Market Readiness

The transition to a market based system for service providers

Specialist disability services

The introduction of the NDIS saw a move away from block funding organisations to delivering services under funding agreements, then to funds being provided to individual clients to purchase services from the market. Specialist disability service providers in Tasmania moved from receiving grant funding quarterly in advance to claiming for payments in arrears via invoice from the NDIA.

The move from block funding meant that providers had to adapt their business models to ensure they remained viable in a competitive market based system where providers are paid in arrears for services provided to individuals, while also delivering supports tailored to meet an individual’s needs and operating a more flexible service. In Tasmania a number of specialist disability service provider organisations have merged to address viability issues, expanded into other markets and/or diversified their service offerings.

Claims for payment from the NDIA are managed through an information technology system. The first year of transition to full scheme saw providers not receiving payment for services delivered due to difficulties with the payment system, further compounding the challenges for providers in Tasmania.

Tasmania’s age cohort-based transition means that funding agreements with providers are stepped down as clients transition to become NDIS participants. Providers have continued to receive grant payments for the services they are delivering to non-NDIS clients and have only been required to move to invoicing for part of the service. This has provided a financial buffer for organisations to maintain cash flow through transition. and assisted Tasmanian organisations to work through the NDIS payment issues.

As the Tasmanian Government steps down the funding agreements for providers of specialist disability services, it has become evident that a number of providers do not have the robust finance and business systems required for provision of NDIS services. As a consequence, they are experiencing difficulty in making claims to the NDIA for payment of services in a timely manner. Tasmania has concerns about the continuing viability of these providers as block funding decreases with the transition of people to the NDIS and then ultimately ceases.

The Tasmanian Government will continue to work closely with service providers and the NDIA to ensure there is a strong market at full-scheme with no gaps in service delivery for NDIS participants. This support includes access to NDIS Sector Development Fund (SDF) projects that support providers to further develop their business for full scheme NDIS.

A number of the historical providers have not made significant changes to the services they have provided under block funding. If they are to remain viable as the NDIS market matures and participants become informed consumers, they will have to adapt their services to ensure they are individually tailored and flexible to meet the needs of participants.

Tasmanian Government funded providers across other programs — particularly children and youth services and community care — have expanded their service offerings into the specialist disabiltty services area, with many registering as providers of services and attracting NDIS participants.

Home and Community Care services

Due to the age based transition, the NDIS has had a limited impact on Tasmanian Home and Community Care (HACC) service providers to date. HACC clients will become eligible to transition into the NDiS from | January 2019 when the 50 to 64 age cohort becomes eligible. Tasmanian HACC services have continued Tasmania’s Response to the Joint Standing Committee Inquiry — Market Readiness

to be delivered as in-kind and therefore are still funded under grant funding agreements. The Tasmanian HACC Program intends to start cashing out during 2018-19 financial year. This will be a period of upheaval for the sector as they adjust to the new business model and transition clients into the NDIS.

The Tasmanian Government is encouraging HACC service providers to engage with the NDIA and the Government to ensure they are aware of the changes that will happen as the NDIS transition is finalised. The Tasmanian Government has strongly encouraged HACC service providers to register as NDIS service providers. However, the Tasmanian HACC Program is often the minority funder compared to the Australian Government Aged Care Commonwealth Home Support Program and providers are strategically determining whether to engage with the NDIS or focus solely on aged care.

Tasmanian HACC service providers have a variety of business models, which will affect their ability to transition into a NDIS fee for service model. Tasmanian HACC service providers are often small regional organisations that have a low level of sophistication, use volunteers and/or may be reliant on the collection of HACC fees. The Tasmanian HACC Program does not have a unit cost for services and price is variable across all service providers. Historically, funding has been a contribution towards services rather than fully funding service provision and service providers have been able to charge additional Tasmanian HACC fees or access additional funding from other sources to compensate.

Transport Services

The Department of State Growth (State Growth) operates three programs which are involved in transition to the NDIS. These are:

  • Taxi subsidies under the Transport Access Scheme;
  • Specialist student transport (undertaken jointly with the Department of Education); and
  • Conveyance Allowance (in scope element of the program is only those students who are not geographically isolated).

As Conveyance Allowance is a subsidy paid to parents to assist with the cost of travel, there is no market for services which either exists or needs to be developed to enable this form of transport in the NDIS. Rather, it will be a matter for the participant to demonstrate that it is a reasonable and necessary support which is beyond ordinary parental responsibility.

NDIS participants receive transport supports in different ways depending on how the participant’s supports are managed. For many participants who self-manage, they receive cash and so can engage any transport service and pay the fare at the time of the journey or by such other means as they negotiate. For other NDIS participants who do not self-manage, there is a need for the participant to become an account customer of the transport service which processes claims for payment through the NDIA portal post- delivery. This is only possible for those transport services which are registered as service providers with the NDIA.

Self-managed participants represent no issue for the transport industry, as providers are accustomed to delivering service on this basis. However, for those participants who require invoicing through the portal, which is likely to be the case for the majority of NDIS participants in Tasmania, there may be limited transport service providers registered with the NDIA in smaller regions.

In larger Tasmanian centres, taxi radio dispatch networks are the registered provider. As a result, taxi operators under that network are able to provide taxi services to NDIS participants. A single registration may attach to a taxi fleet of more than 100 vehicles. However, the ability and willingness of transport services who are not affiliated with a network, or in regional areas, to become registered and invoice through the portal may be limited. Such an arrangement is more complicated for transport services than the taxi subsidy scheme operated by the Tasmanian Government.

That Taxi Subsidy Scheme provides taxi subsidies to eligible scherme members using a smart card which enables taxi fares to be subsidised at the time of the journey. The member is only required to pay the taxi operator the remaining amount of the fare. Many taxi operators are also able to participate in this subsidy

Tasmania’s response to the NDIS Joint Standing Committee Inquiry — Market Readiness

scheme through the facilitation of their taxi radio dispatch network. Claims are processed electronically through the EFTPOS network and funds are paid to the radio dispatch network for distribution to member taxi operators. Some dispatch networks also offer this transaction processing service to taxi operators who are not affiliated for booking purposes. This particularly benefits taxi operators in the smaller regions who do not have a local dispatch network.

A similar system could be very beneficial in the NDIS to encourage wider participation by transport service providers and maximise access to services while minimising the administrative burden on industry. This is important as many transport services are micro businesses with little ability to support administrative processes.

Specialist Student Transport

The delivery of specialist school transport occurs in two ways. In the main, the Tasmanian Government contracts for special needs school bus services. Historically, these services have been contracted over a 10-year period. Additionally, where there is regular demand, but the level is insufficient to warrant a bus, or where a student is not capable of catching a bus, taxi services are engaged annually for the duration of a school year. Coordination of student travel on each service, however delivered, including liaison with family on where pick up and drop off will occur, is undertaken by Government.

These services, whether using bus or taxi, are shared by a number of users in most instances as this makes it possible to deliver the service at a manageable cost per student. In the case of services delivered using buses, in many instances, the operator has no other work for the vehicle. The capital cost of vehicles which deliver these services means that a market-based system represents a significant threat to an operator’s business model unless a new market facilitation and coordination mechanism is developed.

The key difficulty with bus-based school transport is that it is a mass service. This is true for both mainstream and specialist school transport. Accordingly, providers are not geared to a market-based delivery system that targets individual students and the cost structures of the industry cannot produce sustainable prices for individual service delivery.

It is this lack of alignment between the business model of bus operators and the principle of choice and control which has caused some in the bus industry to call for state governments to retain responsibility for specialist student transport. However, this ignores a key tenet behind the establishment of the NDIS which is to have one centralised mechanism for assessing and delivering supports. Transport is not a key support of itself, but it is critical to accessing a wide range of other supports and activities including education. To fracture the support systems across levels of government in this way as suggested by some industry members has the potential to significantly undermine the benefits of the NDIS for school-age participants.

For this reason, the Tasmanian Government is leading work through the Senior Officials Working Group transport subgroup to help the NDIA develop a model by which transport might be delivered under the NDIS in a way that maximises choice and control for participants, but enables delivery at a sustainable price. It is expected that it will take a period of years to implement a solution which is nationally consistent as each jurisdiction currently provides student transport differently.

Tasmania’s Response to the Joint Standing Committee Inquiry — Market Readiness

Participant readiness to navigate new markets

Specialist disability services

The transition to full scheme NDIS in Tasmania is tracking well and many participants of the Scheme have greater choice and control over their supports than they did previously. Tasmania has had concems since the beginning of transition to full-scheme regarding the participant pathway, but recognises that the NDIA is working to address these concems and has participated in the development of the newly designed participant pathway. Tasmania looks forward to the new pathway being implemented in in a timely manner following its trial.

Many participants in Tasmania continue to find it difficult to navigate a system where they have choice and control over their supports, including the provider of their supports. As at 30 September 2017, 25 per cent of providers registered in Tasmania delivered 75 per cent of NDIS funded supports for the quarter. A contributing factor to this figure is that as they transition to the NDIS, participants are choosing to stay with, or move between known providers of specialist disability services. Anecdotal feedback from the mental health sector is that current consumers are reluctant to participate in the NDIS due to the level of administrative burden and challenges experienced in navigating the Scheme and associated service markets.

Participants require access to more information and capacity building to assist them in moving from block funded supports to a market based system and to ensure that participant choice is the main driver of the NDIS market in Tasmania. This includes more information and capacity building for participants to understand and, importantly, practice choice and control in action in regards to their NDIS package and purchasing of supports. Participants need better access to information about the NDIS funded supports, available providers and what they offer, as part of the planning pathway.

Participant choice is the main driver of a robust NDIS market in Tasmania. A critical component to the success of the new participant pathway will be the role of Local Area Coordinators (LAC) and Support Coordinators in supporting participants to have better understanding of their plans, including the choice of available providers. There has been a significant growth in the number of LACs and Support Coordinators required to support transition. It is vital that people recruited to LAC and Support Coordinator positions have the skills and specialist expertise required for the role, which is not always possible in smaller regions. Therefore, the NDIA, in its role as market steward, has to consider what strategies can be put in place to support their LACs and Support Coordinators so they are able to help participants, including those with highly complex needs, to navigate the system.

Transport Services

As noted above, in metropolitan areas the market for transport services is well established and usually competitive. For self-managed NDIS participants there will usually be choice of provider under these circumstances and selecting a provider will not require any new tasks to engage with that market. However, in smaller centres and regional areas, there is likely to be less competition.

In Tasmania, it is not unusual for there to be few passenger transport services in smaller locations. This is unlikely to cause difficulty in the case of self-managed participants unless they would prefer a different provider. However, if the operator in a single provider area is unable or unwilling to be a registered provider, then those participants who are not self-managing may have more difficulty engaging transport services.

Tasmania’s response to the NDIS Joint Standing Committee Inquiry — Market Readiness

A key issue for participants is the level of funding support they receive to access transport services. In Tasmania, to date, a number of participants have reported that they receive less transport supports through the NDIS than they feel are required to access services, supports and recreation. There is a strong perception that while transport for education and employment is reasonably well catered for under the NDIS, transport for recreational and social inclusion purposes is not well supported. This is despite NDIA transport funding arrangements which provide for transport to support community access.

The perception that transport supports are limited under the NDIS has led the Tasmania to defer transition from the state-based taxi subsidy scheme for NDIS participants until 30 June 2018.

It is not clear why the perception of a lack of transport support through the NDIS has arisen. It likely has a number of underlying causes including:

  • Only some supports are identified in NDIS participant plans as being for transport. This is despite NDIA advice that participants will often have access to ‘Core’ supports for a range of purposes including transport. Anecdotal evidence suggests that some participants may be unaware of this.
  • In order to access NDIS transport supports which are not provided as cash, the service provider must invoice through the NDIA portal. If there are no transport services registered as service providers with the NDIS in a particular area, the participant will not be able to access transport because of the funding mechanism.
  • Participant plans struck early in the transition period may not have been prepared with sufficient focus on transport supports and numerous participants needed to seek plan reviews. Some larger taxi service providers report that some participants seeking services have insufficient funds for the level of service they require.
  • It is possible that taxi drivers, aware that NDIS participants are still eligible for Tasmanian Government taxi subsidies which are easily administered, encourage participants to use their smart card in preference to registering with the NDIA to access NDIS transport supports through the portal. Unaware of the alternative, participants then receive only partial subsidy under the state scheme for their travel when NDIS funding may cover a higher proportion of the fare.

Specialist Student Transport

The principle of choice and control, which is essential to the NDIS, means that specialist school transport, when ultimately delivered under the NDIS, may potentially look unlike any equivalent mainstream service. Students using mainstream school transport services have the choice only to use or not use a centrally provided bus service. There is no choice of provider.

A feature of the current system in most jurisdictions is a central coordination role for access, route planning and quality and safety. The ability of participants to navigate any future system for specialist school transport using buses will need to be carefully considered in the design of a market facilitation and coordination mechanism. Early consultation has revealed a preference on the part of some parents for a service under the NDIS akin te a mainstream service to which parents may simply opt in on behalf of their child rather than selecting from an array of possible providers, and weighing up services and costs.

Tasmania’s Response to the Joint Standing Committee Inquiry - Market Readiness

The development of the disability workforce to support the emerging market

Specialist disability services

A Market Position Statement (MPS) for Tasmania was released by the NDIA on 18 July 2016. The MPS provides information for market stakeholders, and prospective providers, of the characteristics of the Tasmanian market, including supply and demand analysis. The MPS states that the Tasmanian market for disability supports was estimated to grow from 4,300 people accessing supports in 2014 to 10,600 in 2019. The workforce required to service this demand is estimated to grow from 1,750 to 2,150 full time equivalent (FTE) positions to 3,200 to 3,900 FTE in 2019.

The MPS notes the expected expansion required in Tasmania to ensure demand and supply needs are met, especially in rural and remote areas.

In February 2016, the Tasmanian Council of Social Services (TasCOSS), in collaboration with the University of New South Wales (UNSW), produced a State of the Sector Report on the Tasmanian social service sector. Pertinent findings in relation to the disability workforce and the emerging market include that one in five organisations in Tasmania have incomes under $150,000 and 30.4 per cent of organisations employ between one and five staff.

There is ongoing concern about the availability of an adequate supply of skilled and competent workers at full scheme NDIS in Tasmania. This is especially true in regional/rural/remote areas of Tasmania, which are known to be thin markets with service gaps; noting that Tasmania has 60 per cent of people living outside of the capital city. A growing concer is the supply of qualified allied health workers to meet the growing demand for NDIS funded therapeutic services, particularly where there are known thin markets.

The Tasmanian Government continues to work closely with the NDIA and National Disability Services Tasmania (NDST) to identify strategies to address this issue and increase workforce capability where there are known thin markets. This includes the Government providing SDF funds to NDST for projects that specifically address promoting the disability sector as a career of choice and increasing supply and availability of the allied health workforce in regional/rural and remote areas of Tasmania. The Tasmanian Government is investing more than $8 million over six years in skills development to increase the disability workforce in Tasmania.

As the transition to full scheme progresses, the NDIA has the most relevant market data. The release of an updated MPS with current workforce data and analysis of the status of the workforce in Tasmania |s essential for the Tasmanian Government to support the NDIA as market steward to develop the NDIS workforce and assist NDIS registered providers facing workforce challenges.

Transport Services

As noted above, many transport operators are micro businesses with little ability to support administrative processes. For this reason, many taxi operators align with taxi radio rooms for a range of business supports including the processing of subsidies under the Tasmanian taxi subsidy scheme.

NDIS participants currently represent only a small market for the passenger transport industry in Tasmania. However, that market will grow as transition continues to full scheme. Tasmania is transitioning to full

Tasmania’s response to the NDIS Joint Standing Committee Inquiry — Market Readiness

scheme by gradually bringing particular age cohorts into the NDIS. To 3! December 2017, persons aged 4- 28 have transitioned representing a mix of children and young adults. As remaining adult cohorts transition, this will significantly grow the proportion of the passenger transport market of NDIS participants.

With this in mind, some taxi radio rooms have invested significant effort in gearing up for the NDIS, particularly to provide services to those participants who are not self-managing. However, many small regional taxi businesses, those not affiliated with a dispatch network lack the scale to invest effort in this way and it is not clear how ride-sharing services will respond.

This is concerming given reports that some disability service provider organisations are likely to cease to provide assistance with travel [State of the Disability Sector Report 2017, National Disability Services, Centre for Applied Disability Research] which is likely to make participants more reliant on private transport services and community transport. If transport services more broadly are not engaged with the NDIS and helped to understand how to register and navigate the NDIA portal and supported to educate their drivers with administering delivery of transport to NDIS participants, any emerging gap in the market may not be filled.

Specialist Student Transport

Given the current uncertainty over any future model for specialist student transport in the NDIS, there is little scope for providers to develop their workforce. In fact, in the absence of any information about a delivery model or timing of transition to the NDIS, there is potential that the current workforce may be eroded.

The impact of pricing on the development of the market

Specialist disability services

The Tasmanian Government continues to receive concerns from the disability services sector about NDIS capped pricing. A recurrent theme from providers is that the price does not consider recruitment and training of staff and has unworkable assumptions about the amount of time management and staff spend on administrative tasks related to participants’ supports. Providers report that costs of overall overheads, particularly in relation to the transition to the NDIS, are not taken into account. The Tasmanian Govemment supports the recommendation of the Productivity Report into NDIS Costs (October 2017) to establish an independent price regulator.

In Tasmania, there have been instances where the Tasmanian Government has requested service providers from the North or Southem regions of Tasmania to intervene to deliver a NDIS service in the North West or North East regions where there has been market failure due to thin markets. This includes providers being asked to intervene and deliver supports to participants with highly complex needs due to gaps in expertise.

NDIS pricing does not take into account the cost to organisations to extend their service to participants in rural or remote areas, including administration cost to establish the service, travel expenses and, in some instances, accommodation expenses.

Tasmania suggests that any market intervention strategy developed to address thin markets and disruption to services, includes a more flexible approach to planning and pricing of supports for participants living in rural and remote areas of Tasmania.

Tasmania’s Response to the Joint Standing Committee Inquiry — Market Readiness

Such a strategy should include a more flexible approach to pricing, including direct commissioning, in order to ensure that supports are guaranteed, especially where participant safety is concemed. It should enable Pricing to be tailored to meet specific circumstances and make it more viable for NDIS registered providers to expand services to participants in rural and remote areas.

Tasmania notes that there will be a financial burden on providers to meet the requirements of the National Quality and Safeguards Frameworks and that this may impact on the viability of providers. Of particular concem are smaller providers, including those based in rural and remote areas of Tasmania. Further analysis in regards to the impact on providers and strategies to mitigate the risk to viability of small providers is required.

In relation to mental health, existing mental health service providers (for residential services and packages of care) provide their services within a recovery framework, where recovery is defined as “being able to create and live a meaningful and contributing life in a community of choice with or without the presence of mental health issues”.

Current pricing through the NDIS does not provide for service provision within a recovery framework. Tasmanian Government funding currently provided to relevant providers is higher in recognition of the resourcing involved to support service within a recovery framework. Comparable pricing (although comparison is challenging due to the variance of service models between the NDIS and a recovery framework) indicates that relevant mental health providers would receive less funding through the NDIS for delivery of services and as such the quality and intensity of service is likely to be decreased, reducing supports to the individual.

Early advice from providers that are funded by the Tasmanian Government and also by the NDIS indicates the NDIS pricing schedule is insufficient to provide recovery focused services. Prices appear to be set using a lower award level than that being used by providers operating in the mental health psychosocial rehabilitation field. The higher award level is necessary due to the higher skill and qualifications of staff working in the area, which is needed to assist consumers to develop the skills and confidence to undertake tasks of daily living instead of just providing it for them.

This has the potential to create a two tier system: the NDIS, which will fund services at a level that only allows “maintenance” at current level of functioning, leading to long term dependence; and the Tasmanian Government funded recovery focused rehabilitation services.

This is not necessarily a negative outcome for all NDIS particpants, as there are many consumers who have recovered to their highest level of functioning but still experience significant functional impairment and will require lifelong daily living assistance. However, for clients assessed under the criteria for early intervention, it is unlikely the pricing will allow sufficiently skilled providers to deliver the services required to develop the skills and capability of clients to exit the scheme and live independently.

Transport Services

Some passenger transport services are subject to pricing controls at jurisdictional level and it is not clear that there is any scope for price setting through the NDIS. However, of relevance is the level of transport supports which are provided to a participant under an assessment of what is reasonable and necessary.

There is no link between fares regulated by jurisdictions and the level of supports provided through NDIS plans. Accordingly, when regulated taxi fares are increased, there is no automatic flow through to plan funding levels.

The potential response of participants to inadequate funding or a fare increase may be to travel less. This may mean that the individual does not access health, education or personal services or recreational activities. It may also result in funding for other supports included in participant plans not being used. An assessment of reasonable and necessary support for transport which does not take adequate account of the cost of travel may restrict access to other supports also identified as reasonable and necessary.

Tasmania’s response to the NDIS Joint Standing Committee Inquiry — Market Readiness

Specialist Student Transport

Pricing in the specialist student transport market will be critical to how any future market facilitation and coordination mechanism operates. There is a clear tension between a model that delivers individual choice and control and financial sustainability. Mass transit does not offer choice and control other than the decision to use or not use a service. However, mass transit will typically be much more cost effective than a tailored service based on meeting the needs of an individual.

A market-based model which gives at least some level of choice and control and requires coordination to assist parents to match their child with the most appropriate service clearly involves additional steps on the current state-based bulk support model, which will need to be taken into account when assessing pricing. It is difficult to frame prices based on the current bulk delivery model used by the states and hope to translate that to a new, and as yet, unknown environment, but which will involve a higher degree of choice.

The role of the NDIA as a market steward

Specialist disability services

It is critical to the success of transition to full scheme NDIS in Tasmania that the Goverment and the NDIA work collaboratively on market stewardship activities and that there is clear coordination of the support provided to the market.

During the trial, the Tasmanian Government worked clasely with the NDIA at a national and local level on the development of the NDIS market in Tasmania. This included working jointly to support all of the Department of Health and Human Services (DHHS) funded specialist disability service providers to transition to the NDIS and to prepare and support people with disability, their family and carers to transition to the NDIS in line with the Tasmanian phasing schedule.

As discussed above, Tasmania recognises that it has an ongoing responsibility to address the challenges of developing a robust market to meet the demands of full scheme NDIS, including continuing to support provider and participant readiness.

Whilst at a local level the NDIA continues to work closely with Government on provider and participant readiness, at a national level, collaboration and engagement with government on communication and other market stewardship activities has been sporadic. There is also a concem that the NDIA is shifting responsibility to government for leading and coordinating stewardship activities as the market progresses and the NDIS market matures. Government clearly has a role here, but this should be the responsibility of the NDIA to coordinate.

It is important for the Tasmanian Government to continue to work closely with the NDIA to ensure a robust NDIS market at full scheme; this includes a suitably qualified workforce to support the market. As the final year for transition to full scheme approaches, clarification of the NDIA’s roles and responsibilities as market steward is required.

Transport Services

As discussed earlier, while in many areas there are effective, competitive markets for transport services, it is likely that the NDIA will need to address the lack of registered providers of transport services in smaller centres and regional areas. If a mechanism that reduces the administrative burden of payment of taxi fares

Tasmania’s Response to the Joint Standing Committee Inquiry — Market Readiness

on transport services were available, more providers may register. There are many examples across Australian jurisdictions in the form of taxi subsidy schemes which are electronically facilitated.

Specialist Student Transport

The NDIA will have a significant role as a market steward in order to develop a market facilitation and coordination mechanism for specialist school transport. It will be necessary for the NDIA to facilitate a new market unless it is to directly commission bulk supports as jurisdictions currently do.

Market intervention options to address thin markets, including in remote Indigenous communities

Specialist disability services

The number of providers registering for NDIS in Tasmania continues to grow. At the completion of tral on 30 June 2016 there were 167 NDIS registered providers in Tasmania, including all of the 87 DHHS funded providers. As at 30 September 2017, there were 821 providers registered for the NDIS in Tasmania. Market concentration continues to be high, with NDIS participants appearing to choose to stay, or move between, historical providers of government block funded supports known to them, the majority of which are based in the South or North of the State. Of the providers registered only around 48 per cent are active.

The Tasmanian Government has targeted NDIS SDF projects to build capacity of providers in regional and remote areas of Tasmania where there are thin markets with service gaps, and to encourage existing support providers in other regions to gain expertise and market knowledge to enter or expand into areas they may not have otherwise considered viable.

In early 2017, DHHS undertook an analysis on market indicators which identified a shortage of NDIS service providers in regions of Tasmania. The shortage of providers was particularly notable in rural and North West regions of Tasmania.

The analysis also identified that, for the State as a whole, plan utilisation averaged 64 per cent, with several support categories standing out as being underutilized at the time. Gaps in service are likely to be a contributing factor to the underutilisation of plans in rural and remote areas of Tasmania. September 2017 figures indicate that plan utilization had risen to around 70 per cent.

One of the key principles underlying the NDIS and a critical driver of the NDIS market is to give participants choice of provider. The shortage of providers in rural and remote areas of Tasmania, particularly the North West region, is especially concerning, as the MPS anticipates these regions to experience the largest growth in the number of people receiving supports. The gaps in services and the need to respond to thin markets in these regions becomes more evident as the Tasmanian Government progresses cashing out specialist disability programs to the NDIS.

Tasmania’s response to the NDIS Joint Standing Committee Inquiry — Market Readiness

The NDIA and the Tasmanian Government have agreed on market readiness working arrangements. A Tasmanian action plan attached to the arrangements, which has been in development since mid-2017, has not been progressed by the NDIA and is currently in draft format. The draft action plan recognises a role for NDIA as a market steward with the support of the Tasmanian Government to identify at risk submarkets and to ensure the supply of supports in limited or underperforming markets/submarkets.

The draft action plan also includes the development of a market intervention strategy to address thin markets and service disruption. As the final year of transition to full scheme approaches, it is vital to have a

market intervention plan in place which recognizes the roles and responsibilities of the Government and NDIA.

The Tasmanian Goverment supports the Productivity Commission’s recommendations (October 2017) conceming thin markets. Consideration should be given to direct commissioning in order to ensure that required supports are guaranteed,

The Tasmanian Government notes that the sector is awaiting an updated MPS for Tasmania, given Tasmania’s interim market position statement is now over |8 months old and does not provide data on market disaggregation by even broad segments or services (for example allied health, home care, behavioural support). The release of an updated, and more detailed MPS would assist the sector to better understand the NDIS market and assist providers to identify participant demand and areas for business growth.

Transport Services

Thin markets for private transport services occur in many smaller centres and regional areas of Tasmania. In these areas, community transport services, local networks and other substitutes typically play a role. It will be necessary for the NDIA to understand where these conditions exist and engage with other types of providers to ensure NDIS participants are not disadvantaged. Support for alternative models of transport, should not however, undermine providers of private transport services and result in a market which becomes unsustainable.

Specialist Student Transport

In thin markets for specialist student transport, it may be necessary for the NDIA to contemplate commissioning bulk supports as an exception where demand warrants it. This is likely to be the only way to secure a service which will be reliable to meet the ongoing, regular need of students to access education. In doing so, the NDIA should be seeking to identify opportunities which may deliver broader benefits.

For example, the NDIA might engage a maxi taxi operator to provide a bulk support by entering into a contract to transport a small number of students to school on a daily basis during school terms. For a taxi, with the potential for a diversified business model, a school contract may provide a foundational level of business viability to then sustain a regional taxi service which benefits other NDIS participants and the broader community.

Tasmania’s Response to the Joint Standing Committee Inquiry — Market Readiness

The provision of housing options for people with disability, with particular reference to the impact of Specialist Disability Accommodation (SDA) supports on the disability housing market

Housing Tasmania owns 80 percent of the existing Specialist Disability Accommodation (SDA) stock. Disability support providers or other community sector organisations own the remaining 20 per cent. Housing Tasmania is a registered SDA provider and will manage current housing stock during a transitional period while decisions for the long-term are made. A consultant is being engaged to analyse the existing portfolio and provide strategic guidance, which is expected to be determined later in 2018.

The move from the government block funded specialist disability accommodation to a market based system should mean that people with disability will be able to choose where they live, what type of accommodation best meets their needs and who they live with. In Tasmania, however, new participants not currently living in existing SDA-type accommodation may not be able to exercise their accommodation choice for some years due to the lack of SDA options. Participant choice will drive the market for SDA and investors are unlikely to be attracted to build SDA without any guaranteed retum on investment.

The NDIA discusses investors building innovative housing options that take account of the needs of people with disability who attract SDA funding. However, the SDA pricing and payment framework is complex and investors are unlikely to have experience of the NDIS and SDA. There needs to be more accessible information available that will provide potential investors with a clear understanding of the SDA and the obligations and responsibilities of SDA providers.

Roles for NDIA to consider as market steward for SDA include:

  • collecting and publishing localised data in relation to existing supply and current and projected demand for SDA;
  • basing the approval of new SDA on local demand; and
  • creating registers of SDA demand and supply and making those registers available to potential investors so they can identify where new supply is needed.

The most important role for the NDIA, in supporting vacancy management and the viability of SDA providers, will be to enable the development of a forum that allows participants to access information on available SDA properties and for SDA providers to identify potential tenants.

Tasmania’s response to the NDIS Joint Standing Committee Inquiry — Market Readiness

The impact of the Quality and Safeguarding Framework on the development of the market

Specialist disability services

The NDIS Quality and Safeguarding Framework (the Framework) is designed to ensure high quality supports and safe environments for all NDIS participants and to provide the regulatory policy to support the emerging market-based system. The national approach to the Framework is expected to reduce regulatory duplication, particularly for those providers working across jurisdictions or through mutual recognition of quality standards where appropriate, and support consistency for participants. A documented function of the NDIS Registrar will be to monitor, review and report on the effectiveness of the NDIS market of supports, including early indicators of risk of thin markets and market failures.

Although some alignment exists with current Tasmanian requirements, such as worker screening, the national Framework provides for increased market accountability whilst also containing a greater range of compliance powers, spanning from educative to regulatory responses, including the option to deregister.

The quality assurance certification requirement, however, will result in an increased financial and resource impost for the majority of Tasmanian Government funded disability providers proposing to deliver higher- risk supports and is of particular concern.

There is some uncertainty in relation to the availability of positive behaviour support practitioners to support the national consistent model, within a smaller jurisdiction like Tasmania. Currently these services are provided by govemment-based practitioners and it is not clear whether and at what point these practitioners will transition to the private market.

Tasmania also faces the challenge of assisting the sector to meet the requirements of the national Framework while maintaining an effective service system that minimises risk to the quality of, and access to, support for existing clients during the transitional period.

Transport Services

Transport services in most jurisdictions are extensively regulated. In Tasmania, drivers, operators and vehicles used to deliver passenger transport services are subject to a range of regulatory requirements, including Working with Children checks, National Police Checks and regular vehicle inspections. Arguably, the taxi sector does not require additional quality and safeguarding beyond those imposed at jurisdictional level. In many instances, participants using taxis will either be capable of independent travel or travel with a carer.

If additional quality and safeguards are required under the NDIS, it will be beyond the scope of jurisdictional regulators. Accordingly, there may be practical issues with implementation. Further, any imposition of additional requirements on taxi operators may thin the market of potential providers and so may serve to limit access to transport for participants. It will be a matter for the NDIA to carefully consider how it would ensure adequacy of supply if additional quality and safeguard requirements are to be introduced.

Tasmania’s Response to the Joint Standing Committee Inquiry — Market Readiness

Specialist Student Transport

As with taxis, bus services are regulated in Tasmania at the driver, operator and vehicle level. However, some quality and safeguards are likely to be required around the management of students boarding and disembarking, as students will typically travel without a carer and will require some controls such as handover protocols at bus stops.

Provider of last resort arrangements, including for crisis accommodation

Specialist disability services

Since 2010, the Tasmanian Government has funded the community sector to provide specialist disability services. Throughout trial, and in transition to full scheme NDIS, the role of the Tasmania Government Disability and Community Services (DCS) has been to step in to coordinate responses, intervening where there has been market failure or in crisis situations, to coordinate services to ensure continuity of supports and mitigate any risk for people with disability with highly complex needs. This role has primarily been a coordination and negotiation role that brings relevant parties together to broker a solution. Tasmania sees this function as needing to continue and believes that the NDIA is best positioned in full scheme NDIS to take on this coordination role through the contracts it has in place with LAC providers.

At this stage clients, families, providers and other government agencies require a single referral point for icefissues that require escalation — they are currently contacting DCS.

In November 2017, the Tasmanian Government participated in a consultation to inform the NDIA’s provider of last resort approach. The Tasmanian Government strongly recommended that it is critical to the approach that:

  • There is the capacity for immediate supports to be commissioned in crisis or last resort situations, particularly for people with high complex needs and those living in rural and remote areas.
  • Where it is identified that a person has highly complex needs, there be maximum flexibility in the plan to be able to respond to their changing needs, including sufficient hours of support coordination.
  • In developing the provider of last resort approach, the NDIA review the support coordination role and the level of experience and skill required to support and coordinate services for people with highly complex needs.

It is suggested that, once developed, the market intervention strategy include the NDIA collecting and reporting on instances where provider of last resort arrangements are used to assist the NDIA and government to determine the effectiveness of the market interventions.

Transport Services

In active passenger transport markets, such as in metropolitan areas, it is unlikely that provider of last resort arrangements should be required for self-managing participants. However, given the scope for there to be few transport operators registered as service providers in the NDIS in smaller centres, there may be a need to consider a provider of last resort in these cases.

Tasmania’s response to the NDIS Joint Standing Committee Inquiry — Market Readiness

Organisationally, it is likely that only community transport, some aged care facilities or disability care providers with their own vehicles would be able to assist participants with transport. However, the extent of any assistance may be restricted to spare capacity and whether transport of NDIS participants were consistent with any funding agreement to which a provider is subject. In situations where there is no local provider able to assist, consideration may need to be given to paying an allowance to a family member or associate to provide transport.

Specialist Student Transport

Given that accessible vehicles are often required to deliver specialist student transport, it may be difficult to secure a provider of last resort. In larger centres, wheelchair accessible taxis may be able to offer a solution. However, once again it is likely that consideration would need to be given to drawing on vehicles operated by community transport, aged and disability care providers or funding for a family member or associate. Another option may be to enable carpooling by families of students attending the same school.

Tasmania’s Response to the Joint Standing Committee Inquiry — Market Readiness

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