Tuesday, June 30, 2015

NDS News Update - NDIA announces price indexation


National

News Update

29 June 2015

NDIA announces price indexation

From 1 August, National Disability Insurance Scheme (NDIS) prices for personal support and community participation will increase by:

  •  4.2% in Victoria, New South Wales and Tasmania - from $39.52 per hour for day time support to $41.18 per hour
  •  1.9% in all other trial sites - from $41.97 per hour for day time support to $42.77 per hour

The 1.9% increase from 1 August brings forward for the benefit of providers the Equal Remuneration Order (ERO) payment, which does not need to be reflected in wages until 1 December 2015.

The additional 2.3% increase for Victoria, New South Wales and Tasmania is wage indexation. The same figure will be applied in all trial sites to prices subject to indexation apart from personal support and community participation. 

Independent data collection to test and adjust the costing model

NDS is pleased that the National Disability Insurance Agency (NDIA) has agreed to defer the price reduction that was flagged last year in the paper 'NDIA Methodology for Reasonable Cost Model.' Instead it has applied indexation in the states with the lowest prices. We are disappointed that it has not applied indexation to one-to-one support prices in all jurisdictions. Current prices in all states and territories are inadequate to meet the costs of service provision and, without full indexation, that situation will only worsen.

Importantly, the NDIA has agreed on the need for improved data to test and adjust assumptions in the Reasonable Cost Model and has committed to fund independent data collection. NDS will be negotiating with the NDIA on the details of this independent data collection.

 A new establishment fee

The NDIA will introduce the establishment fee that it agreed to last year in the report of the NDS-NDIA joint working group. The fee will apply from 1 August and NDS will continue to press for retrospective payments (or equivalent) in the trial sites.

The establishment fee is limited to new NDIA participants who receive 20 or more hours per month of personal support or community participation. The participant will receive $750 for the establishment fee in their plan; they can pay a new service provider $500 or an existing provider $250.

The fee is intended to cover service agreement negotiations; it is not intended to cover all interactions between participants and providers.

Condensed number of support items

A new catalogue and NDIS Price Guide will be launched on 1 August 2015. It will combine support items, resulting in a much shorter list that delineates between core support, equipment and investment in capacity building, with a stronger focus on outcomes. This move away from long prescriptive itemised price lists is welcome. It is intended to enable a more flexible and outcomes-focussed plan. The NDIA will brief providers on these changes during July.

Ongoing discussions between NDS and the NDIA

Adequate prices are critical to the success of the NDIS. NDS has continued price negotiations with the NDIA since last year's joint working party report. Some progress has been made, but significant and contentious issues remain to be resolved. NDS will continue to urge the NDIA to commence price deregulation, while pressing the Agency to base its funding of packages on prices that genuinely support quality and choice.

Future work on pricing should be greatly aided by independent data collection on the costs of services as well as market research to support benchmarking.

 

Contact information:
Ken Baker, Chief Executive, 02 6283 3203, ken.baker@nds.org.au



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