The New NDIS Price Guide. Mind. Blown.
Updated: Feb 19, 2020
That might sound a little over the top, and perhaps it is simply a reflection of a mindset which is the result of the challenges faced by providers in the early years of the NDIS. Years of financial uncertainty, lobbying and hope. Even with the announcements made in March this year, I was still sceptical about what would be revealed. When I read the price guide, I struggled to take it all in. Mind. Blown.
Top of my list was the fact that service providers now need to make a Temporary Transformation Payment (TTP)-decision. This is new, and providers have less than a week (as the price guide is effective from next week!) to decide whether to adopt the prices inclusive of the TTP, or the prices without. The TTP prices are 7.5% higher but come with some conditions. The result is that providers need to make a pricing decision, and while it may seem an easy decision (i.e. take the higher price), each provider should make a considered and informed decision. Key factors to be considered:
To what extent can the TTP compliance requirements be met?
What are the financial impacts of adopting (or not) the TTP?
What will be the response of our customers to the higher prices?
What are our competitors likely to do? Will our decision impact on market share?
Price increases are significant. Even without the TTP-election, the rates have increased significantly from 2018/19. For example, what is often considered the "base unit", the Assistance with Daily Living weekday, daytime (01_011_0107_1_1) has increased (in SA) from $49.02 an hour, to $52.85 (representing a 7.8% increase). If providers also elect TTP, then the increase is 15.9%.
There is now one price guide, across the country. The adoption of the Modified Monash Model to account for remoteness is a step forward. It is an established and evidence based geographical classification system, that should result in greater funding equity for regional and remote areas.
The new "no show" rules better reflect provider experiences, and will better compensate providers for the costs of planning, preparing and attending when the customer withdraws at late notice, or does not attend.
the TTP requirement to participate in an "Agency-approved market benchmark survey" should result in large data set to inform future price setting, and to the extent that data is released, assist providers in identifying opportunities for improvement.
There are some negatives too:
Why wouldn’t the TTP also be applicable to Supported Independent Living (SIL)? I know SIL is a quoted item, and I expect that this is the rationale. However, the SIL quote is heavily scrutinised by the NDIA and re-modelled and re-costed by them using the submitted Roster of Care. Unless the TTP allowance is including in these costings, many providers will have the largest proportion (in dollars) of their business not subject to the transformation payment. In my view, this undermines its intent.
The timing of the price guide release, 25 June 2019, is again, just too late. Financial budgets for FY19/20 have already been considered and approved by Boards. Board will now be asking for the impacts to be projected and for budgets to be re-submitted. Billing system need amendment to be updated for prices and any changes in billing methodologies. Customers also need to be advised on price changes. The reality of this is that many providers will not be able to implement in a 3-4 working day timeframe.
Strangely, group based activities have had pricing reduced. And the larger the group, the larger the reduction. For example, Group based activities in the community (weekday, daytime, standard needs, 1:5) has had the hourly rate reduced by more than 25% (04_141_0136_6_1). The National Disability Service has already raised this anomaly with the NDIS, and we will watch what develops. (UPDATE: This has now been corrected in Version 1.1 of the Price Guide, released 28 June 2019. This is great news for providers. The prices now better reflect increases in other areas of the price guide.)
That said, there is work to do:
Make your TTP decision,
Update your billing systems,
Advise your customers, and
Re-forecast your FY19/20 budget.