Have you ever experienced a situation where a service provider suddenly raises their fees after a person has been accepted onto the NDIS? If so, keep reading...
In December 2023, an amendment was made to the code of conduct regarding the supply of goods, specifically excluding services. This change emphasised that no NDIS participant should face higher charges compared to non-participants, unless there's a reasonable justification. This justification might include the higher costs associated with delivering services under the NDIS.
Now, let's delve into the concept of "sharp practice" a bit further. This term refers to sly or crafty behaviour that, while technically legal, borders on unethical conduct.
Since the inception of the NDIS and the accompanying price guide, many service providers who previously offered services at one set of rates have embraced the NDIS price guide.
It's worth thinking about the implications of this change. While some providers may genuinely incur higher costs due to NDIS requirements, there's also a risk of exploitation. Charging exorbitant fees simply because the money originates from government coffers could be considered questionable practice.
Example One:
There's a family with a 12-year-old daughter Alice who lives with autism, and they've been managing her therapy independently. Alice has weekly sessions with a therapist, which included helpful travel training on the school bus. It was going great; Alice was making real progress, and the therapist charged $85 per hour. If her younger brother Thomas, who also lives autism, joined in, the fee bumped up to $120.
But then things shifted when both children were accepted into the NDIS and started receiving support. Suddenly, the therapy provider announced a increase to $193.99 per hour, plus travel costs. While the kids were getting about 20 hours of support, the new plan meant sessions were cut back to once every two weeks over 40 weeks. And that's not even factoring in the extra time and expenses for travel and reports.
So now, instead of the convenient weekly sessions that worked well for the family and were beneficial for the children, they're dealing with less frequent sessions that don't fully account for the added burdens. It's a tough adjustment, and the ones feeling the impact the most are the participants themselves.
Example Two:
Meet Lucy, a vibrant individual in her 50s navigating life with a psychosocial disability. After much anticipation, she finally gained access to the NDIS, a pivotal moment that filled her with excitement for the possibilities ahead. With her newfound acceptance onto the scheme came the opportunity to utilise funding to enhance her capacity building. Among the provisions was funding for 20 hours of sessions with a psychologist, a resource Lucy valued greatly.
Lucy had devoted considerable effort to her journey of recovery, attending numerous therapy sessions to reach a point where she now engaged in maintenance therapy with her psychologist. Consistency was key for Lucy, who made it a priority to see her counsellor weekly. Given her financial circumstances, with every dollar making a difference while relying on a disability pension, Lucy appreciated her psychologist's lower rate of $120 per session.
However, upon Lucy's enrolment in the NDIS, her psychology practice wasted no time in adjusting the session rate to $214. This sudden increase caught Lucy off guard. Initially, when she received her funding allocation, Lucy calculated that with 20 hours of funding, she could afford approximately 35 sessions, supplementing the remainder with her Mental Health plan. This plan was vital for Lucy's day-to-day management, providing her with the continuity she sought.
In addition to psychological support, Lucy also benefited from Recovery Coaching Funding. While this additional resource theoretically aimed to reduce the number of sessions required under the new funding model, Lucy approached it with scepticism. Building rapport with a new recovery coach would take time, unlike the established relationship she already had with her psychologist over four years. The transition posed a significant challenge for Lucy, further compounded by the sudden price hike imposed by her psychology practice upon her enrolment in the NDIS.
These examples illustrate how participants often find themselves at the mercy of their support and funding arrangements, lacking any meaningful choice or control. The NDIS framework allows providers to bill according to a fixed price guide, effectively rendering competition obsolete.
But what about the providers themselves?
When justifying an increase in their support charges, are they truly absorbing additional costs, or are they simply aligning their prices to maximise their margins?
What are the expenses that a provider needs to consider when bringing on board a new participant?
Paperwork: This includes preparing agreements, support care plans, and reports, as well as the time spent by staff to complete these tasks.
Travel: Meeting with potential participants can involve travel expenses, especially if the person does not ultimately sign up for the services.
Registration: The initial verification audit for registration can range from $1,500 to $5,000, depending on the complexity of the support services offered. Additionally, there are ongoing costs, such as midterm audits, which can add approximately $5,000.
Insurance: As discussed in a previous post Insurance 101 for New Business Owners - What you need to know - insurance is a massive cost to a provider.
Staffing: Bringing on new customers may require increasing administrative staff or hiring trained personnel to expand services. This incurs additional costs in terms of taxes, superannuation, and insurance.
Office space: While remote work has become more common since 2020, some providers still require physical office space, which comes with associated costs like rent and utilities.
These are just the main costs involved, there are many more, less obvious costs to consider.
Readers have the ultimate decision to determine whether certain businesses are exploiting participants or if their pricing is justifiable according to the price guide. However, it's evident that the price guide hasn't fostered the competition among providers that the NDIS initially anticipated.
The amendment to the code of conduct talks about goods as the area in particular where there is a blatant disregard for the wellbeing of participants.
As an simple example of goods: If an assistive technology company buys a device for $200 and then charges $400 to the general public, excluding their margins they may turn a profit. If they then charge, specifically a NDIS participant $600 for the same device, they are using sharp practice and the NDIS, whilst not making anything concrete in the new directive, should signal alarm bells to a participant and their support networks to raise concerns and potentially file complaints.
It's always about due diligence and shopping around to assist your customers.
We wish you well, as always.
The Lama Care Team
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