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Update 03/06/2021: The NDIA have announced a further delay to implementing these changes. Group providers will now have an additional 12 months to transition to these new pricing arrangements. Providers can choose to use either the new pricing arrangements or continue using the existing price structure until 1 July 2022.
In the two weeks since the NDIA announced their new approach to group pricing, we have moved from being shocked, to suspicious, then angry, but we were always deeply confused. In our article last week, we described the threat this change presents to the viability of group supports, but in case you missed it, here’s the summary:
- Instead of claiming ratio-specific line items, providers now need to bill a portion of a single rate. This cuts base revenue by anywhere from 11-32%
- To make up the gap, providers need to track and claim every minute they spend providing non face-to-face support (after they’ve negotiated with all participants to claim it)
But here’s the clincher: in response to questions about what prompted the change, the NDIA’s explanation is: to simplify claiming and reduce providers’ administrative burden. Over the last two weeks, we’ve spoken to some of the sector’s most outcome-focused, innovative and agile group service providers and have heard a resounding message from many of them: we cannot survive this ‘NDIA assistance’.
Gaslighting is a form of psychological manipulation where someone makes you doubt your own sense of reality. Like when someone blatantly lies to you, says “you’re crazy”; or when you ask why your revenue has been slashed and the answer is “to assist you”.
So, in case you are in any doubt of your own perception of this change, here are the reasons this is bad NDIA policy at work:
Divide and conquer cost cutting
By separating non-F2F time from direct support, the NDIA have carved out a big slice of the budget and put it up for debate in planning meetings. With this approach, every hour of non-F2F time is subject to a reasonable and necessary determination, separate to the decision about the person’s direct support needs.
The NDIA’s cost model assumes that for every hour of support, a provider also delivers 7 minutes of non-F2F support. This means that a person accessing 30 hours of 1:3 support (around $600 a week) should also be funded for 3.5 hours of non-F2F (around $180 a week).
The onus will be on individuals and their supporters to understand and successfully make the case for both the direct and non-F2F funding needs. This clearly creates a risk of inequities in funding levels and is likely to lead to increased provider intervention in planning meetings, both perverse outcomes, to say the least.
Appalling timing
Setting aside for a moment the fact that this is not a journey we want to go on, let’s talk about its timing. What the NDIA is now asking of providers is essentially to convert many program and administrative staff to a billable hours model. Getting a team to accurately record increments of times against individuals requires significant investments in time and money across multiple areas:
- Education of staff on what parts of their roles are considered billable and how they will be expected to track time
- Negotiation with participants and families about the proposed costs and subsequent changes to service agreements and service bookings
- Changes to processes and organisational systems to capture and claim time
- Building an organisational culture that accepts and values this aspect of the work
This is simply not the kind of change that can be pulled off in the 3 weeks notice providers were given before 1 July and in the middle of a global pandemic. Australian Disability Enterprises have been given 18 months to adjust to a similar change. Why has this been foisted on group services without warning?
Inclusion diminished
The new Price Guide has also removed the “Community, Social and Recreational Activities” line item from Core, which was a non-price controlled item, described as:
Annual support to enable a participant to independently engage in community, social and recreational activities when costs of participation exceed an affordable level and without, the participant would be at risk of social isolation.
This line item was used by some participants and providers to agree to their own prices for supports that did not fit within the definitions of other supports or bridge access to more mainstream supports.
Initially, “Innovative Community Participation”, a similar line item under Increased Social & Community Participation was also removed but it has since been reinstated, meaning participants wanting to pursue a program under this line item will need to have their plan structured specifically to include funding in this category.
Which begs the question - is it possible the NDIA have forgotten Minister Robert’s announcement that core and capacity building budgets would become flexible from 1 July?
COVID innovation killed
Almost every provider we have spoken to in the last four months has innovated in some way. Many are finding new ways of delivering their supports remotely, often to a much wider audience than before. We have seen some fantastic programs pop up that integrate self-paced learning, moderated online forums and live group catch ups.
As it stands, with the “Community, Social and Recreational Activities” line item removed, the Price Guide has no mechanism to claim for a program that isn’t time-based. So, providers offering blended learning can only bill for a fraction of the sessions that are live, meaning that if 25 people show up, the revenue could be as low as $2 per person.
When priced appropriately, programs like these are a win for everyone, providing a cost-effective scalable support that could be accessed nationally. But with pricing arrangements as they stand, these programs will have little choice but to wind up. This will have a more dramatic impact in rural and specialist areas and other ‘thin markets’.
Update 15 July: Version 1.0.5 price guide has reinstated this support item
Survival of the fittest
The Annual Pricing Review makes constant reference to the performance of “the 25th percentile”, the most efficient 25% of providers (financially speaking) who participated in the Financial Benchmarking Study. Indeed, most of the proposed changes to the NDIA’s Disability Support Worker cost model (the basis for these pricing decisions) are based on the performance of this top quartile.
The NDIA are signalling to the market that they are not willing to adapt to meet the needs of the whole market, or even most of it. For providers not already in the 25th percentile, the message is: “up or out”.
For some providers, this will mean relinquishing their registration and providing support only to self managers, reducing the Quality & Safeguards Commission’s ability to oversee these supports as well as reducing choice for agency managed and plan managed participants, which make up nearly three quarters of the Scheme.
For others providers, this may mean discontinuing NDIS services, limiting their services to people with other funding sources or closing altogether. At a time when we should be growing a thriving market, the NDIS is actively fostering market failure.
Gaslighting cost cutting
We were surprised to read in the Annual Pricing Review that only 59.6% of eligible providers chose to claim the Temporary Transformation Payment (TTP) loading. But we were shocked to read the NDIA’s interpretation of this being a sign that many providers simply did not need the additional revenue. This ignores the fact that the NDIA did not put additional funding in participant plans for this loading and that providers and participants were put in the impossible position of having to “negotiate” who would lose out: the provider not accessing TTP or the participant risking overspending their budget.
This denial of responsibility around their decisions is more classic gaslighting behaviour. The NDIA’s own cost models continue to demonstrate that providers cannot survive under the current pricing structure and instead of setting reasonable prices or getting out of the way entirely, they set limits to participant budgets at one level and then create a convoluted set of loadings and fees that providers can supposedly claim without ever actually increasing participant budgets. This leaves providers, participants and families to “negotiate” who is going to not get their needs met. It’s a dishonest approach to cost cutting that aims to fatigue everyone into submission.
Good riddance groups?
There will certainly be a portion of the disability community who look at this imminent threat to the future of many group programs and think we are better off without them. But what is the alternative? The NDIA are hardly about to start funding all plans at 1:1 rates. We understand there are pressures to reduce the costs of the Scheme to keep it sustainable in the long term. But what the budget stands to gain here is not worth what the sector stands to lose.
As Ann Drieberg wrote last week, there are some pretty awesome group programs that will be wiped out by this approach - providers that see group supports not as a second-rate 1:1 support but as a valuable opportunity in its own right, focusing on social connection, community and teamwork. There are providers that see their group supports as a building block for the people they support to something greater: to freely given relationships, personal growth, greater opportunities and a damn good life.
The NDIA has the unenviable job of bringing this enormous social change in under budget and we fully understand how difficult that is. But providers and participants deserve a better, clearer, fairer approach to pricing and communications from the NDIA that don’t make us doubt our own reality. To present providers with an imminent threat to their existence and call it a gift is not OK. Do better, NDIA or at the very least, stop trying to convince us you are.
