Submission 54 — Maurice Blackburn Lawyers — Market Readiness | External submission

Maurice Blackburn Pty Limited ABN 21 105 657 949

Level 10 456 Lonsdale Street Melbourne VIC 3000

PO Box 523 Melbourne VIC 3001

DX 466 Melbourne

T (03) 9605 2700 F (03) 9258 9600

22 February, 2018

The Secretary Joint Standing Committee on the National Disability Insurance Scheme PO Box 6100 Parliament House Canberra ACT 2600

By email: ndis.sen@aph.gov.au

Dear Sir/Madam,

We welcome the opportunity to provide feedback in relation to the NDIS Market Readiness inquiry.

Please do not hesitate to contact me and my colleagues on redacted or at redacted if we can further assist with the Committee’s important work.

Yours faithfully,

Rod Hodgson Principal MAURICE BLACKBURN Accredited Specialist Personal Injury Law

www.mauriceblackburn.com.au

SUBMISSION TO THE JOINT STANDING COMMITTEE ON THE NDIS ON MARKET READINESS

February 2018

Table of Contents

………………………………………………………………………………………………………………. Page

INTRODUCTION ……………………………………………………………………………………………. 2

OUR SUBMISSION ………………………………………………………………………………………… 2

COMMENTS SPECIFIC TO THE TERMS OF REFERENCE ………………………………… 3

    a. The transition to a market based system for service providers ...................... 3

    b. Participant readiness to navigate new markets ............................................. 5

    c. The development of the workforce to support the emerging market .............. 7

    d. The impact of pricing on the development of the market ............................... 8

    e. The role of the NDIA as a market steward ..................................................... 9

       f. Market intervention options to address thin markets, including in remote
         Indigenous communities ...................................................................... 10

    g. 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 ............................................ 11

    h. The impact of the Quality and Safeguarding Framework ............................. 12

         i. Provider of last resort arrangements, including for crisis accommodation ..... 12

         j. Any other related matters. ............................................................................ 13

                                          Page 1

Introduction

Maurice Blackburn Pty Ltd is a plaintiff law firm with 32 permanent offices and 29 visiting offices throughout all mainland States and Territories. The firm specialises in personal injuries, medical negligence, employment and industrial law, dust diseases, superannuation (particularly total and permanent disability claims), negligent financial and other advice, and consumer and commercial class actions.

Maurice Blackburn employs over 1000 staff, including approximately 330 lawyers who provide advice and assistance to thousands of clients each year. The advice services are often provided free of charge as it is firm policy in many areas to give the first consultation for free. The firm also has a substantial social justice practice.

Every day we work with Australians who have suffered severe and catastrophic injuries, assisting them to access justice, compensation and support as they attempt to rebuild their lives. We assist them in navigating the law, social insurance schemes and private sector insurance. We engage with their families, friends and carers – as well as service providers – as they rally to assist our clients.

Our Submission

Maurice Blackburn’s long and consistent commitment to contributing to discussions around the scheme’s design, trial sites and roll-out has informed our understanding of the directions we believe the scheme must head. The magnitude of the challenges facing the NDIS is difficult to overstate.

For this inquiry, Maurice Blackburn asked its staff to consult with scheme participants and service providers at the local level about their perceptions of the readiness of the market to cope with scheme roll-out. This submission reflects the outcomes of those consultations.

Maurice Blackburn has consistently advocated for a slowing of the roll-out to ensure market readiness. This may involve a complete cessation of the rollout on a regional basis for a period to enable the remedial work to be undertaken. Without a very significant recalibration of the rollout schedule, and major remedial work during that hiatus, the NDIS’s problems, and costs will escalate.

We have heard clear messages from local NDIS clients and service providers that a range of supports must be provided for organisations making the transition from block funding to the market based system. This must include support to ensure that service providers are able to maintain sufficient cash flow during the transition period to stay viable and continue to employ staff. Maurice Blackburn fears that failing to provide these supports will lead to organisations of all sizes actively seeking mergers, closure, or alternative business models to NDIS service provision.

Maurice Blackburn believes that the pricing model must reflect the true cost of service provision – especially in regional and remote communities. We believe that the main focus of pricing policy must shift from scheme sustainability, toward market development.

Page 2

Comments Specific to the Terms of Reference

a. The transition to a market based system for service providers

Maurice Blackburn is hearing consistent messages from our networks in relation to issues in the transition to a market based system for service providers. These messages can be divided into four clear streams – problems related to the constancy of funding; problems related to staffing; problems relating to service providers’ relationship with the NDIA; and problems relating to broader issues.

Problems related to the constancy of funding:

Service providers report facing enormous issues moving from block funding to a fee for service based model. Organisations are having difficulty maintaining funding while the transition occurs, but also in making the fee for service model profitable.
We are aware of reports from service providers where they are finding the transition too hard, and expressing an unwillingness to work under such strictures when they have other options open to them.
We are aware of organisations of all sizes which are seriously considering their short and medium term viability, and actively pursuing closure or merger options. These include small community operations, as well as large scale organisations which have received multi-million dollar / multi-year contracts in the past. With little in the way of retained savings, they simply cannot see how they can survive the funding shortfalls during the transition period.
Under the transition to the market based system, service providers are not finding it easier to (a) find enough work to make money on a fee for service basis; or (b) find enough qualified staff willing to work for a rate that allows the business to make a profit

(For further discussion on pricing issues, please refer to our response to Term of Reference D).
Concerns about viability are invariably felt organisation-wide, making staff retention virtually impossible.
The appearance of cost shifting from States to the NDIS (States removing funding for certain activities on the basis that it should be covered under NDIS funding) is acutely perceived by service providers. Regardless of the accuracy of the perception, it has become a reality in the eyes of service providers which are transitioning from block funding to an open marketplace.
Under previous funding regimes, larger providers were able to ‘juggle’ their cash flow according on the needs of the organisation and the needs of their clients. With the more prescriptive nature of NDIS funding, this flexibility has been removed.
Maurice Blackburn remains concerned that that the shift to a market based approach will favour the big companies over smaller community service providers. This is at odds with the goal of providing more flexible and tailored services.

Page 3

Problems relating to staffing:

Maurice Blackburn is aware that small, individual contractors – especially personal carers - are struggling with the transition to a market based approach. Direct engagement, in particular, is something that a lot of smaller providers are expressing concern about. Individual service providers are expressing concerns about the necessity of setting themselves up as a business, and the precarious nature of the consistency of work.
Maurice Blackburn is concerned that the transition to a market based system for service provision will not assist in the reduction of casualisation in the sector’s workforce – if anything, we believe it will exacerbate it. In our experience, most participants will only need between two and six hours of assistance per day, meaning carers will still have to pick up various bits of work in a piecemeal fashion.
We are aware of the proposed use of apps to find carers, but a risk remains that there is a large portion of the workforce that will not be comfortable in using such technologies.

(For further discussion on workforce development issues, please refer to our responses under Term of Reference C)

Problems relating to service providers’ relationship with the NDIA:

Maurice Blackburn has found that many service providers, formerly ambassadors for the scheme, have become deeply frustrated and angry about their interactions with the NDIA.
Many providers that we work with find the registration process a matter of great complexity. Additionally, one of Maurice Blackburn’s offices in regional Australia has noted that there has been no adequate information or guidance from the NDIA to advise local service providers on how best to structure their business in order to comply with the registration requirements.
The IT dysfunction within the NDIA is regarded by most service providers as inexcusable. We have heard many reports of difficulties using the provider portal.
Several service providers have found that responses to questions put to the NDIS differ from person to person. This is being interpreted in the field as the NDIA staff receiving inadequate training, or not having a strong understanding of the scheme.
One CEO of a community disability service provider in regional Australia likened his interactions with the NDIA to “trying to do a puzzle without having all the pieces”.

Problems relating to broader issues:

Service providers are reporting that the supports in the wider sector are stretched to the point of irrelevance. One service provider from a regional community reported that they had an initial consultation with the National Disability Services (NDS) to gain suggestions on how to improve their business systems to transition to the NDIA portal - but that no follow up was forthcoming.

Page 4

Maurice Blackburn has experienced widespread concern from board members of community service organisations that their charities lack ‘business nous’, and have no resources to develop it. Concepts such as scalability and return on investment are new to many in the sector, and industry support is negligible.
One provider has suggested that further training for LACs would help families to understand the possible supports available to them.
Maurice Blackburn has experienced a fear amongst service providers of raising concerns with NDIS leadership and industry regulators for fear of being blacklisted.

Our Submission

Maurice Blackburn agrees with the Recommendation 7.1 of the Productivity Commission’s review into the costs of the NDIS, that block funding should be considered as part of a range of approaches to alleviate short-term issues in transitional funding arrangements. This is especially pertinent for funded organisations with long and positive histories of service-delivery.
Maurice Blackburn would like to see a greater commitment to the resourcing of supports to service providers in helping them set up appropriate governance and business systems to enable them to thrive under the new regime. These supports could be supplied from both internal and to external sources that can help with these arrangements. Partnerships with local business groups in local communities, which could mentor local service providers in business acumen, could be worthwhile start.
Maurice Blackburn stresses the importance that the realistic costs of transition for organisations needs to be factored in and reimbursed.
Maurice Blackburn calls for special consideration for small enterprises and individual service providers when allocating assistance to make the transition to the market based system.

b. Participant readiness to navigate new markets

The most common piece of feedback we heard from participants in relation to the shift to a market based system is that they have enough trouble trying to source appropriate care and manage their disability and do not want to then be forced to effectively manage a small workforce.
Some scheme participants obviously enjoy the flexibility and independence that comes with an open, competitive market place, particularly in terms of direct engagement of personal care staff. However, even if it all goes according to plan, there is also a large number of participants who do not want the burden of having to find and engage services.
In our experience, the existence of a market placed system for service provision is not at the forefront of scheme participants’ minds. Whether supports are available through a market based system is less important than if the supports are available at all.

Page 5

Maurice Blackburn is aware of widespread concerns for participants about employment issues relating to the engagement of staff, such as insurance coverage, superannuation, and general HRM/IR issues.
Our experience is that clients and their families accept that flexibility needs to be part of the mix. There appears to be an understanding that this will involve acceptance of new people to deliver elements of the care and equipment provision.
We are concerned that there is still a widespread concern about the NDIA’s reliance on family members providing care in order to minimise the supports that the scheme has to fund. Even if this concern is more based on perception than reality, it is an important theme for the NDIA to take into account when considering the relationship between the participant and the market place.
Some participants have reported finding the process confusing due to there being so many different parties involved – NDIA, LACs, support coordinators etc. Our clients report that the process can seem overwhelming especially with different LACs and planners providing conflicting information at times. As one service provider put it: “It’s difficult to navigate new markets for participants who know what they require. There are many more families who are unsure of what is needed who are making do with insufficient plans”.
Some service providers are reporting that their clients are turning to them for help in navigating the NDIS maze. Aside from not being resourced to provide this service, providers are feeling that they don’t have the expertise to offer the help required.
Unrelated to market navigation, but reflective of the current client concerns in relation to the efficacy of the NDIA, Maurice Blackburn is hearing widespread concern about the appropriateness of planning sessions being conducted over the phone. We believe that such practices are not in line with the intentions of the scheme, not in the best interests of clients, fail to represent an adequate duty of care, and reflect the pressures associated with the timetable for scheme roll-out and inadequate and poorly skilled NDIS staffing arrangements.
Maurice Blackburn believes that the key to participant readiness to engage in the new marketplace lies simply in the existence of competition. The NDIA needs to ensure that an appropriate balance of large providers is in place; but also that small, more niche providers are also available and viable.

Our Submission:

Maurice Blackburn believes that appropriate assistance must be allocated to ensure that service providers are able to help educate their clients on navigating the new market based system.
Maurice Blackburn believes that NDIS clients must be given access to appropriate supports in relation to the direct employment of staff.

Page 6

c. The development of the workforce to support the emerging market

In addition to funding issues and the timetable for implementation, Maurice Blackburn believes that workforce infrastructure planning is a fundamental issue for the NDIS in terms of quality outcomes and sustainability. The Productivity Commission report which was the foundation for the scheme was woefully deficient in providing any workforce solutions. A high-quality, better skilled workforce is needed if the quality of support to individuals with complex needs is to improve.
Maurice Blackburn has long advocated that measures should be put in place to enhance skills training and capacity of the disability workforce.
Strategies to address the growing shortage of workers risk either reducing quality standards or increasing costs, or both. It is absolutely crucial that appropriate levels of funding are committed to this issue. It should not be permitted to bring a “lowest common denominator” approach to the provision of services to eligible individuals. There must be sufficient and properly qualified staff available Australia-wide. The risks in not adopting that approach are plain: I. Unscrupulous entities and individuals will enter the market, seeking to exploit the funds available; II. Unskilled and untrained people will be recruited to work with people with complex multifaceted needs; III. Those individuals will be highly vulnerable to exploitative conduct by their employing entity; IV. Participants will suffer detriment, or die as a consequence; and V. The intended benefits in increased workforce participation will be illusory.
The fears expressed above are being reflected in what we’re hearing from providers in the field. For example, we are aware that some professionals in regional communities are taking on complex clients without the experience or skills required, such as services providing assistive technology to families without having the training to provide sufficient and effective support.
We are also hearing differences between jurisdictions in relation to minimum experience/qualifications to provide certain services. For example, in some States new graduate speech pathologists are not able to provide services through NDIS. This confuses expectations of therapists across different States.
We are also concerned about reports of blurred lines of expectations of registered service providers and government services such as schools. This highlights the need for a whole of government approach, and the importance of role clarity in ensuring that scarce resources are being targeted effectively.
We are aware of valuable work that the Independent Advisory Council was doing in advocating for the prioritisation of those with lived experience of disability to be trained in service provision – especially in planning and community support roles. Maurice Blackburn would encourage investment in this area.
We remain particularly concerned about the potential for increased casualisation of the service provider workforce, and a growth in precarious employment in the absence of sufficient workforce planning. It is vital that the involvement of unions and worker advocacy bodies is encouraged.

Page 7

Maurice Blackburn has been consistent in our calls for the pace of roll-out to be slowed to allow the planned development of the supply side of the market to catch up to demand.

Our Submission:

Maurice Blackburn believes that the NDIS cannot abdicate responsibility for workforce development in the fledgling market. Until such time as the supply side is strong and resilient, it must accept responsibility for resourcing the development of a high-quality, skilled workforce.
Maurice Blackburn believes that the timetable for roll-out should be adjusted to ensure appropriate workforce development has occurred.

d. The impact of pricing on the development of the market

Maurice Blackburn understands the balancing act NDIA is trying to achieve between providing cost effective services, scheme sustainability and ensuring market supply.
We believe that the NDIA’s objective is to remain the price-setter. We have long argued that that objective, in a genuine marketplace, is in irreconcilable tension with the practicalities of the availability and cost of services being vastly different from region to region.
We believe that pricing policy must reflect the goal of becoming genuinely market based. If the price setter does not respect actual market dynamics, then market development will not occur and participants will not be able to access the services they require.
The following example from service providers in regional Queensland illustrates our central principle in relation to becoming genuinely market based:
- If there’s one care company servicing, for example Longreach, and their hourly rates are 20% more than the average rates for the five providers in Cairns; the NDIA should accept the market rate for Longreach, and not cap, restrict, mandate or prescribe maximum rates.
Maurice Blackburn notes the results of a recent survey conducted by National Disability Services of its member organisations¹:
- That 68% of organisations surveyed agreed with the statement: “We won’t be able to supply services at NDIS prices”
- That 50% of organisations surveyed agreed with the statement: “NDIS prices will reduce the quality of service”
- That the number one action identified by service providers in the survey: “Establish NDIS prices aligned with the actual cost of supply” (60%).

¹ “State of the Disability Sector 2017”. www.nds.org.au/news/state-of-the-disability-sector-report-2017-reflects-sector-under-pressure

Page 8

We have experienced widespread concern amongst service providers that inappropriate pricing will lead to higher rates of staff turnover. With turnover in the sector already sitting between 30 – 35% per annum, and likely to worsen under current conditions, employers are concerned that resourcing recruitment and training will be a real issue.
Maurice Blackburn is concerned about the potential for organisations to actively seek out the more lucrative areas of service provision under NDIS funding, even if this is not an area in which the organisation has experience or expertise, and abandoning those areas which are less well funded. We are aware of this happening in communities already, with service providers trying to sure up their cash flow during the transitional period.
Maurice Blackburn agrees with the Productivity Commission that price regulation of supports should be administered by a body with relevant capabilities and resources.
We further agree with the Productivity Commission’s statement that: “Prices should be set with market development as the primary focus”²
We believe that this is also (if not more) important in regional and remote communities. NDIA is compromised as a price regulator. It has a responsibility to reduce scheme costs, but also to stimulate a supply market. The pressure has been and remains on the former. It now needs to shift to the latter.
Maurice Blackburn believes that the transition of price setting to an independent body would remove that compromise.
We believe that future price setting should be genuinely market driven, transparent and evidence-based.

Our Submission:

Maurice Blackburn agrees with the stance of the Productivity Commission that, in the long term, price regulation must rest with an external body and not the NDIA.
Maurice Blackburn believes that pricing policy must reflect the goal of becoming genuinely market based.
Maurice Blackburn believes that, as a matter of priority, the primary focus for price setting shift to being market development.

e. The role of the NDIA as a market steward

Maurice Blackburn supports the Productivity Commission’s view that: “[jurisdictional difference] highlights the uncertainty around the roles and responsibilities of governments under the NDIS”³

² National Disability Insurance Scheme (NDIS) Costs. Productivity Commission Study Report Overview (2017), p 34. ³ National Disability Insurance Scheme (NDIS) Costs. Productivity Commission Study Report Overview (2017), p 40

Page 9

The core message we are receiving from service providers is that market stewardship must focus on stopping the cost shifting between jurisdictions. There is a clear need for clarity and consistency around jurisdictional boundaries, which will help foster a strong and vibrant market.
We believe that it is essential to have a coordinated suite of policies focusing on related areas such as disability care and support, health and aged care. This coordination across the whole of government is most likely to reduce overlapping responsibilities and inefficiency, and hence maximise the available resources that can be used to improve service delivery.
We look to COAG and the DRC to accept a leadership role in this.

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

Maurice Blackburn has long advocated that the shifting structure of the market plus the existing thin markets in regional and rural communities will require strong and specific intervention by the NDIA.
We believe that the options including leveraging established community organisations, using hub and spoke models and relying on other mainstream providers are all worthwhile considerations. But it needs to be done on the basis that staff are engaged and paid appropriately, engaged appropriately and that market rates can vary significantly between communities.
Maurice Blackburn agrees with the formal advice provided by the Independent Advisory Council to the NDIA in 2015, which notes that thin markets, including in remote communities, need to be propped up by interventions including:
- flexibility in planning,
- resourcing adequate transport,
- ensuring access to technology,
- empowering individuals and
- a strong LAC presence.⁴
Maurice Blackburn has been made aware that there are a number of indigenous communities where plans have been created for participants but there are no service providers to provide the services. In one case, a participant in a remote Queensland town has had a plan developed for $100,000 of care needs, including respite care. The closest appropriate respite care provider is 800 kilometres away.
Service providers that we work with report that transport support offered through the NDIS is seriously deficient for the regions. This takes two forms:
- Enabling clients to travel to access services, and
- Enabling service providers to send their staff to remote areas. In many cases, the cost they pay their staff per hour is currently greater than what is provided to the participant for that support through the NDIS.

⁴ Ref: (https://www.ndis.gov.au/about-us/governance/IAC/iac-reasonable-necessary-lifespan.html)

Page 10

Maurice Blackburn is concerned that in indigenous communities, there appears to be very little information being shared about the NDIS. It has been noted that in many aboriginal languages there is no word for disability, and that there is no formalised approach for education in those communities about what needs are required and available for those with disabilities. As a result, there is an expectation that the family will continue to support the participants without the need for the NDIA to get involved.

Our Submission:

Maurice Blackburn believes that the pricing of services in regional and remote communities should be aligned with the true cost of providing those services. This is especially pertinent in the areas of
- Staffing,
- Transport, and
- Access to technology
Maurice Blackburn suggests that the Committee satisfy itself that the provision of community education in relation to the NDIS in indigenous communities is adequate and culturally appropriate.

g. 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

Maurice Blackburn understands the importance of balancing the conflicting priorities of addressing the critical lack of housing stock appropriate for people with disabilities, with the recognition that, ideally, the choice of home is a function of independence.⁵
We are aware, through interactions between our regional offices and their clients, that this is especially acute in rural and remote communities.
We are particularly concerned that the lack of available housing stock is making it difficult for some people to transition from the hospital system back into appropriate housing.
There appears to be a stand-off between the health system and the NDIA, where reports have emerged of NDIS refusing to attend to a client’s housing needs until they are released from hospital, but the hospital refusing to release the patient because they have no adequate accommodation to go to.

(For further discussion of the issues relating to the health system as a provider of accommodation of last resort, please see our response to Term of Reference I)

Our Submission:

Maurice Blackburn believes that clear guidelines must be agreed between the health system and the NDIS in relation to accommodation requirements post-release.

⁵ See www.ndis.gov.au/about-us/governance/IAC/iac-advice-independence.html

Page 11

h. The impact of the Quality and Safeguarding Framework

No comments relating to this term of reference.

i. Provider of last resort arrangements, including for crisis accommodation

Maurice Blackburn is aware that historically, there has been an agreement that if no suitable accommodation could be found, people under 65 could be given accommodation in aged care facilities.
We draw the Committee’s attention to the matters raised in Box 1 (below).

Box 1: Hospitals as accommodation of last resort.

The legislation enabling the above arrangement was set up as a safety net or last resort type arrangement. The highest level of funding people can receive under the aged care legislation and instruments is around $79,000. So, pre NDIS, a lot of catastrophically injured people under 65 would end up in an aged care facility and that facility would receive around $79,000 in funding.

Importantly, the relevant Act states that the facility is to meet all the needs of the resident.

The NDIA has now taken a position that for those people who are unable find suitable accommodation and end up in aged care, the NDIS will only pay the $79,000 and will not fund any additional care type supports for that participant. So no additional assistance is provided for transfers, ADLs, self-care, community access, feeding etc.

NDIA appears to have determined that these participants fall under the cover of the aged care legislation, which states that the facility must supply all of that resident’s needs, so the NDIA can effectively ‘wipe their hands’ of everything else after funding the $79,000.

The problem is that the aged care facilities have been set up to care for elderly and frail, not the catastrophically injured. So, they are simply are not set up or adequately funded to care for complex clients. The facilities are then forced to remove services for other residents to pay for the additional care required by a catastrophically injured resident. Or, if they don’t supply all the participants’ needs, they risk losing their accreditation.

There is an enormous difference in the care needs of an elderly resident with mobility and cognitive issues, compared to those of a catastrophically injured person. The latter will need one-to-one support for any recreational activities, will need more assistance when it comes to hygiene, feeding (particularly PEG feeding), communication etc.
We are aware of examples of family members having to come into the facility to provide supports that the aged care staff couldn’t or wouldn’t provide.

Page 12

As one provider put it: “The NDIS is refusing to provide additional funding for these services and condemning these participants to a lower level of support. In effect, they are continuing the very problem the scheme was built to fix”.

The hypocrisy of this is that these people remain NDIS participants for everything else – they get the $79,000 for accommodation and then funding for equipment etc. So they are very much NDIS participants but are being discriminated against because of where they live entirely due to the lack of suitable accommodation available.

Maurice Blackburn notes that the inequitable treatment of NDIS participants as described above has yet to be tested in the NDIS’s external review process.

j. Any other related matters.

Maurice Blackburn has consistently advocated for a slowing of the roll-out to ensure market readiness. This may involve a complete cessation of the rollout on a regional basis for a period to enable the remedial work to be undertaken. Without a very significant recalibration of the rollout schedule, and major remedial work during that hiatus, the NDIS’s problems, and costs will escalate.
Our Regional Offices are aware of situations where planners are being directed to reduce participants’ benefits by at least 10% when reviewing the initial plan. There is a belief amongst service providers that planners are being rewarded for achieving such costs savings.

Page 13