The taskforce on fair pricing

In late 2023, the NDIS Commission announced a new taskforce. Yes, another taskforce. One must wonder if part of the reason the Scheme is under financial pressure is because of all the business cards being printed for all these taskforces.

This taskforce is now active and is centered around fair pricing (also called differential pricing). For years, NDIS Minister Bill Shorten has promised to clamp down on providers charging higher rates to NDIS participants than people not on the NDIS. The Minister calls this an NDIS tax. The government has committed $6.7million to the taskforce over the next four years.

This taskforce is not to be confused with the Fraud Fusion Taskforce, which involves Australian Federal Police and Australian Criminal Intelligence Commission (among others) and is targeting fraudulent activity of a criminal nature. The fair pricing taskforce is not looking at intentionally criminal or fraudulent activity, but at the pricing strategies of providers and whether they unfairly overcharge NDIS participants.

Why do we need to crack down on ‘unfair pricing’?

On the surface, the purpose of this taskforce is to stop people being exploited and unfairly treated just because they have an NDIS Plan. But, of course, it’s also about the knock-on effect overcharging has on Scheme sustainability.

Let’s be real: the NDIS tax exists. We’ve all heard stories of NDIS participants being charged much more for a product or service. For example, a provider charging $150 for something that is available in Bunnings for $50.

There are also lots of providers doing the best job they can, and still making a financial loss. We know unfair pricing happens. But, from what I’ve seen, this isn’t the case for the majority of participant-provider relationships across the country. It’s expensive to deliver NDIS services, with significant additional business, service, compliance and quality costs.

Who is on the taskforce?

There are three parts of the Commonwealth Government coming together on this taskforce:

• The taskforce is chaired by Australian Competition and Consumer Commission (ACCC) - the regulator for consumer rights. As part of the taskforce, they will investigate and clamp down on misleading conduct, unfair contract terms and anti-competitive agreements.
• NDIS Commission - will focus on the overcharging of participants and taking regulatory action against providers when required.
• NDIA – will make changes to the Scheme’s operations and pricing.

One thing that has always confused me about the narrative of the NDIS tax is that the ACCC already has, and has always had, regulatory oversight of fair and transparent pricing. In fact, there are already ACCC guidelines for providing goods and services to consumers with disability, and statutory consumer rights apply to everyone. So hopefully one of the outcomes of this taskforce is more targeted guidance for providers and participants about their rights and responsibilities.

What can the taskforce do?

If the Commission finds examples of differential pricing, providers can be subject to the usual Commission compliance actions. Depending on the severity, this can include provider education, additional orders and oversight, through to banning orders, fines and criminal charges.

We’ve also heard of providers being ordered to pay money back into the person’s NDIS Plan when the price was deemed to be unclear or unfair. The NDIA is also encouraging Plan Managers to raise instances where providers are “unable, or unwilling, to explain their pricing, particularly in the context of a higher price being charged.” Although the NDIS Guide to Plan Management hasn’t changed to reflect this.

There is also a capacity building element to the taskforce - supporting participants to understand and execute their consumer rights.

Changes to the Code of Conduct

Around the same time as the announcement of this taskforce, the NDIS Commission beefed the Provider Guidance on the Code of Conduct. Kylie covered this in her article 'Changes to the Code of Conduct'.  The Code of Conduct applies to registered and unregistered providers. The changes said that the requirement to act with ‘honesty, integrity and transparency’ includes in pricing goods (although the Code of Conduct only refers to goods, the Commission website talks about goods and services). The Commission expects an ‘objectively sufficient justification’ if providers charge a higher price to NDIS participants. If anyone can point me to anything that has ‘objectively sufficient justification’ then please do. It’s a pretty high bar to meet.

What can providers do?

There a few things providers can do:

• Review and revise all client-facing documents, like Service Agreements, to ensure they are clear and accessible. Easy Read Service Agreements are often a good solution.
• Have a method for documenting any conversations with participants about changes in what will be billed for.
• Do some back-end work to create a justification for what you charge.
• Compare your prices to other providers.
• Attend one of our workshops on fraud and fair pricing! 

I’ll crash tackle the elephant in the room: the vast majority of providers charge the NDIS price cap because the true costs of delivering supports are actually higher than what they can bill. There are many compliance, quality, administration and operational loads that come with delivering NDIS supports.

Of course, if you are a provider that intentionally makes your agreements opaque so you can slide in extra costs, or artificially inflates service costs, then expect compliance action. That’s not an acceptable pricing approach in any sector.

The way I see it: reducing disparity is fine. Saving participants, and the Scheme, money is excellent. Anyone with a concern about pricing should engage with the taskforce. But a fair price is much more ambiguous than a simple narrative about ‘the NDIS tax.’

Recently I heard Minister Shorten say that “sometimes it seems like the system exists to service the Price Guide” rather than the other way around. which accurately sums up how complex NDIS pricing is. One of the most important functions of the taskforce will be how it informs and influences broader NDIA pricing strategies.