NDIS Price Review Is ‘Disappointing’

Australia’s peak body for disability providers has said NDIS prices are continuing to fall short despite a price increase announcement.

On Monday the National Disability Insurance Agency (NDIA) released its 2017 to 2018 pricing review, announcing price increases in three key areas.

There will be a 4.5 per cent increase to the supports categorised under “daily activity and community participation”, a 2.1 per cent increase for capital related support and a 1.94 per cent increase for capacity building support.

There will be no price increase to therapy services.

In a letter to service providers NDIA CEO David Bowen said the review took into account perspectives and data from a wide range of sources including 82 providers, submissions by providers and participants to the Productivity Commission, benchmarks from other sectors, and the Wage Price Index, Consumer Price Index, and the Fair Work Ombudsman among others.

Bowen said that although the price increase would be effective from 1 July, the NDIA had decided to undertake an independent pricing review.

“Given the wide range of other issues raised in the FY 2017-18 Price Review, the Participant and Provider workshops, and the Productivity Commission submissions, the NDIA is immediately implementing an Independent Pricing Review which will be undertaken by McKinsey & Company,” Bowen said.

“Better understanding the wide range of issues that have been raised is critical to creating a strong, innovative and viable market, which will eventually lend itself to price deregulation.

“More specifically, it is integral to generating an improved outcomes focus for participants; allowing them to exercise greater choice and control; and attracting more providers to offer a broader array of quality, innovative services in local markets where demand exists.

“Moreover, getting this balance right is aligned with and essential to scheme’s sustainability.”

National Disability Services CEO Ken Baker said that while he welcomed the independent review the results of the current review were “disappointing.”

“[The] statement announced price increases which will enable some services to keep pace with inflation, with lesser increases for others and no increase at all for therapy services,” Baker said.

“These pricing decisions effectively ignore evidence provided to a price review earlier this year which promised to test the assumptions that underlie the hourly rate.”

Baker said two-thirds of providers had reported to the NDS that they were “worried” they wouldn’t be able to provide NDIS services at the current prices.

He said as a result of low prices, half of the providers were concerned they would be “forced” to employ less skilled and experienced staff and lower their supervision ratios.

“Today’s announcement of 2017-18 prices won’t allay those concerns,” Baker said.

He said the NDIS prices were not where they needed to be to ensure the highest-quality services for people with disability.

Baker said he welcomed the announcement for an independent review.

“Decisions about prices must be based on evidence independently collected. We are pleased this review will look at the case for bringing forward price deregulation, the problematic pricing of respite centres and emergency responses, regional differences in costs, complexity of supports and the need for an adequate profit to enable investment in growth,” Baker said.

Shadow minister for families and social services Jenny Macklin said she disputed the need for another review.

“Disability service providers don’t want more endless reviews – they want the Turnbull government to make decisions about the pricing of the NDIS,” Macklin said.

“Providers need certainty around pricing so they can get on with the job of delivering supports to people with disability.”