Plan managers and support co-ordinators soak up NDIS funds as providers go to the wall
Billions of dollars a year in NDIS funding is being soaked up by middlemen plan managers and support co-ordinators who are arguably no longer necessary and drain taxpayer funds that should be spent directly on people with disabilities.
Billions of dollars a year in NDIS funding is being needlessly spent on middlemen plan managers charging “trail fees” and support co-ordinators who earn as much as junior doctors, an expert in the scheme says.
And without stronger regulation, established service provider organisations are pushed to the wall while some unscrupulous providers flourish, according to the peak body for services.
The monthly fees alone charged by plan managers amount to hundreds of millions of dollars a year, reducing funding for direct services provided to people with disability, warns experienced National Disability Insurance Scheme service provider and WA pediatrician James Fitzpatrick.
Dr Fitzpatrick is calling for NDIS plan managers and support coordination to be abolished within a year.
While reforms to shore up long-term sustainability of the $46bn NDIS, one of the biggest spending programs in the federal budget, have focused heavily on cracking down on fraudulent providers and tightening eligibility, much bigger sources of waste are going unchecked, with little scrutiny on plan managers and support co-ordinators, as well as the quality and value of service provision generally.
Dr Fitzpatrick, who has been providing disability care through a service organisation across remote Australia since the inception of the NDIS more than a decade ago, has described plan management and support co-ordination as “a fundamental flaw in the NDIS design” that has effectively set up a gravy train and created additional bureaucracy and administrative load.
“The plan management model has diverted substantial resources within the NDIS and has made it more complex to administer for therapy providers, and this has resulted in less resources being available for direct service provision,” he said.
“For each participant, a set-up fee, depending on remoteness of the participant, of between $230 and $350 is paid to the plan managers; followed by what could be defined as a ‘trail fee’ of between $104 and $157 per month paid to plan managers, for the life of the participant’s plan.”
The peak body National Disability Services is pushing for mandatory registration of all disability service providers, with many established large organisations on the brink of viability struggling to carry out essential clinical governance amid stagnating therapy prices. Many other providers who do not invest in quality control within their organisation or service are not facing the same difficulties and face little scrutiny on the quality of their care and services.
“Organisations that are committed to providing quality services are under significant strain,” said NDS chief executive Michael Perusco.
“There’s an extreme risk that we’re going to lose quality providers from the market if we don’t see tiered pricing and registration for all providers. There needs to be much stronger regulation of providers.
“If we lose quality providers from the system, that’s going to be devastating for the NDIS. Without universal registration, it is very difficult to guarantee the safety of participants, which is, ultimately, what the scheme is all about.”
Registration of providers of NDIS services is contentious in the disability community, with some arguing mandatory registration and associated quality control and audit processes could disadvantage small providers and have a negative impact on participants’ choice and control.
The NDIS Provider and Worker Registration Taskforce last year stopped short of recommending all service providers be registered, instead opting for registration based on the level of risk involved in the service provision. The federal government has so far moved to implement a new registration system limited to requiring all platform providers, support co-ordinators and supported independent living providers to be registered.
Mr Perusco said it remained a major issue for the NDIS, and its safety and sustainability, that most providers were operating without rigorous oversight.
“Universal registration means that all providers will have oversight from the NDIS commission, and that is absolutely critical to getting better value for money out of the scheme,” he said.
The NDIS currently has more than 700,000 participants, and cost growth has been a persistent budget concern for the federal government. NDIS Minister Amanda Rishworth said last week the scheme was tracking to come in $700m lower than the $46.4bn forecast in last year’s budget.
Clarity around what products and services NDIS participants are entitled to, and a crackdown on fraud, had seen year-on-year cost growth of 10 per cent rather than the forecast 12 per cent, Ms Rishworth said.
She noted that cost growth was now on track to reach national cabinet’s target of 8 per cent by mid-next year.
Questions around the quality of services for people with disability have also been raised, most recently by NDIS Quality and Safeguards Assistant Commissioner Natalie Wade.
“We are absolutely done,” Ms Wade told the Reasonable and Necessary podcast this week.
“We are done with people with disability dying preventable deaths, of being raped and abused in services. We’re done with people with disability not getting what they need from services.
“It’s incumbent upon all of us in these privileged roles to ensure that we are absolutely investing our time and our effort and our focus on ensuring that there is an absolutely better, better future for people with disability in this nation.”
Dr Fitzpatrick also questioned the ongoing role of support coordinators in the NDIS, arguing that while they were intended to be a community-embedded workforce to help NDIS participants choose, and access, appropriate and effective therapy and other supports – an important step in the early days of the NDIS – they were too costly and no longer necessary.
“A specialist support co-ordinator, often personnel with no or limited formal health or disability qualifications, is funded at $190.54 per hour in the city, or $285.80 per hour in very remote communities, to spend time with participants helping them to choose and access services,” Dr Fiztpatrick said.
“Support co-ordinators, often with no formal qualification, can command salaries on par with junior doctors, experienced teachers or allied health workers. This amount is paid for every hour of activity, including the hours of travel to and from a participant.
“On top of that, in the regions, flights, accommodation and vehicle-use payments all add up, and sometimes exceed the actual therapy and support delivery that the scheme was intended to provide.
“Support co-ordinators’ reports and recommendations often advise highly qualified allied health professionals of the therapy priorities of a participant, a practice that may inadvertently override best-practice clinical care.
“In what has become a vacuum of commonsense advocacy that was historically undertaken by individuals and families working with local human services providers (think health, education, aged care, child protection), support co-ordinators filled the NDIS-induced void to support the decision-making of participants and broker the services they choose, including which service providers they use.
“Problematically, an organisation can deliver plan management (influencing funding allocation), support co-ordination (influencing the services and providers a participant chooses), and therapy services. The one provider can therefore influence the choice of supports, administer the funding, and provide the therapy supports, for a participant or a group of participants. No organisation can guarantee that there is no potential for bias within such a closed system.”
Dr Fitzpatrick argued that these middle layers of management could be abolished if people’s plans were directly managed by the NDIS, or self-managed with the support of the organisations providing various services.
“Determining the most appropriate therapy and support for participants should be the domain of the participant and qualified allied health or social work practitioners, ideally through the evidence-based lead practitioner or key worker model,” he said.
“That would also more closely bond them to practical and goals-oriented therapy services that work.”
Former NDIS minister Bill Shorten moved last year to crack down on exploitation of the scheme by some plan managers and support co-ordinators amid evidence of widespread lack of tax compliance and practices in which these managers were encouraging their clients to overspend their plans in a bid to attract funding increases, work that is continuing.
The National Disability Support Agency, which co-leads the Fraud Fusion Taskforce, enhanced its systems to better detect and evaluate early plan reviews submitted by plan managers and support co-ordinators, as well as working with other government agencies to ensure compliance and detect fraudulent providers by sharing payment data with the tax office.
EDITOR’S NOTE: An earlier version of this article included Dr Fitzpatrick’s estimate that plan management fees exceeded $1bn a year. In fact, the NDIA’s December quarter report says plan managers were paid $158m in that quarter for plan management services. It has also been made clearer that plan managers are registered, but not support co-ordinators.
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