Time to cut hidden fees and charges from the NDIS
In my 20 years as a practising pediatrician specialising in child development and disability in remote and regional communities, I have been present for hundreds of human deliveries and supported the young, and their families, through their early years to set them up for a bright future. I also happened to be present for the birth of the National Disability Insurance Scheme and established the first NDIS services in regional and remote communities in Western Australia and the Northern Territory. It was a precipitous delivery and nobody really knew if it would work.
My dedicated team and I rolled up our sleeves and made it work within an NDIS-registered private clinic model, growing from five to 100 employees across five years. We had 10 or more clinic hubs and we were delivering thousands of hours of allied health service a month into some of Australia’s most disadvantaged communities.
The volume and quality of services going into people’s lives was many times more than previously achieved under state and territory public health service models. We could consistently deliver quality allied health and psychology services to those in the hardest to reach places and populations. It was not perfect but it was working.
The NDIS was conceived about a decade ago as a free(ish) market, activity-based funding model that championed participant choice and control. It was meant to cut through the inefficiency of disability service provision, mired in decades of block-funding allocations to well motivated yet slow-moving organisations, with little accountability to people with disability themselves.
The idea was sound; however, the scheme design was too clever by half. Two fundamental flaws were made in the NDIS design. Specifically, the NDIS baked in additional complexity through plan managers and support co-ordinators, ostensibly to achieve choice and control for NDIS participants over the services they received and who they received them from.
The plan managers largely consolidated to become accounting firms for people with disabilities who wanted some control of how they purchased services, without the full responsibility of self-management of their funding. Plan managers developed an unintended and possibly unwanted influence over how funding was available to an individual and created an additional level of bureaucracy and administrative load within an already complex system.
The plan management model has diverted substantial resources within the NDIS and has made it more complex to administer for therapy and other service providers, and this has resulted in fewer resources being available for direct service provision.
Plan management fees, while not taken directly from a participant’s direct support budget, add an overall cost to delivering the NDIS. For each participant a set-up fee of between $230 and $350, depending on remoteness of the participant, is paid to the plan managers. That is followed by what could be defined as a “trail fee” of between $104 and $157 a month paid to plan managers for the life of the participant’s plan. Considering that about 60 per cent of NDIS participants have a plan manager and there are about 660,000 NDIS participants, and taking a midpoint in both the set-up fee and trail fees, the cost of plan management has been about $190m in set-up fees and is about $86m in trail fees a month – or a touch over $1bn in trail fees paid to plan managers a year.
The second well-intentioned mistake was the cost and unintended responsibility vested in support co-ordination. This was intended to be a community-embedded workforce to help NDIS participants choose and access appropriate and effective therapy and other supports. They were a much-needed role in the chaotic early days of the NDIS, when guide rails were needed to ensure the scheme could take its first steps and to assist participants to navigate this brave new world.
The problem became that the funds required to deliver the more complex levels of support co-ordination, particularly in remote areas, meant that a specialist support co-ordinator, often personnel with no or limited formal health or disability qualifications, was funded at $190.54 an hour in the city, or $285.80 an hour in very remote communities, to spend time with participants helping them to choose and access services. This amount is paid for every hour of activity, including the hours of travel to and from a participant, at meetings, doing admin on behalf of the participant or writing sometimes lengthy reports.
On top of that in the regions, charter 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 have filled the NDIS-induced void to support the decision-making of participants and broker the services they choose, including which service providers they use.
In the first years of the NDIS, single organisations, including my own, pioneered the implementation of NDIS therapy, plan management and support co-ordination in regional and remote locations where there were no other providers. However, it is clearly problematic that a single organisation can deliver plan management (influencing funding allocation), support co-ordination (influencing the services and providers a participant chooses) and therapy services. And in the absence of mandatory NDIS registration, with associated checks and balances, for plan management, support co-ordination and therapy service provision, many less scrupulous and unregistered providers have thrived on this closed-system approach, including at the expense of other, better governed, organisations. Many registered services, including my own, exited support co-ordination and plan management in the context of potential conflicts of interest, the demands of compliance and an increasingly tight labour market. We could not easily sustain a workforce within a highly competitive labour market where support co-ordinators, often with no formal qualification, could command salaries on par with junior doctors, experienced teachers or allied health workers.
More recently, with the introduction in the 2024 NDIS Review of the “Navigator” terminology, describing a co-ordination role across several human services sectors, there seemed to be a pathway out of NDIS-specific support co-ordination and towards a more holistic mechanism that was accessible to people with disability but was broader than the NDIS. The Navigator model, in which one person or service navigates all the support needed or offered to a participant, presents an opportunity for a separation of co-ordinating a person’s services (within and outside the NDIS) from the provision of service. However, to date this has not happened, while participants and service providers alike remain in limbo regarding the future structure of co-ordination of support.
A political moment passed us by in 2024 when Bill Shorten, who was on the right path, merely tinkered with the NDIS by mandating NDIS registration for plan managers and support co-ordinators, rather than recasting the NDIS with less complexity, and scrapping plan management, while moving decisively towards a Navigator model.
The impact of plan management and support co-ordination on the disability sector has been both instrumental (in the early days to ensure orderly uptake, choice and control) and catastrophic (because of complexity, conflicts of interest and costs). Almost 50 per cent of NDIS participants have support co-ordination included in their support plans. This reflects the reality that navigating the complexity of accessing NDIS services requires additional support. However, while historically disability organisations would collaborate and co-ordinate for the best outcomes for their clients, these new intermediaries unintentionally created administrative barriers and potential for bias in preferencing some services over others.
But there is another way. Ten years down the track, two reforms to the NDIS must be championed with bipartisan vigour.
First, for a period of transition (say, six months to a year), providers offering any combination of plan management, support co-ordination and therapy and support services must be limited to only one of these categories. This will assist organisations to focus on their strongest offering and it will remove the potential for internal self-referrals and conflicts of interest.
Second, over a year, remove the functions of plan management and support co-ordination altogether. Simplify the funding management to agency-managed (the National Disability Insurance Agency does it) or self-managed (the participant does it), removing the plan-managed option. The accountants still will find work. While the role of support co-ordination has been critical for many participants and in the establishment years of the NDIS, it should be replaced by individual and family advocacy, and support within existing mainstream services (again, think health, education, aged care, child protection).
Importantly, determining the most appropriate therapy and support for participants should be a collaboration between the participant, their family and qualified allied health or social work practitioners, ideally through the evidence-based lead practitioner or key worker model. These lead practitioners would be a senior clinician with a holistic view of participant needs and a range of mainstream services. The lead practitioner may work within a service provider of the participant’s choice. But they should remain agnostic to setting plan budgets and brokering the choice of service providers.
Existing support co-ordinators should be granted time to adapt or integrate into the broader human services landscape from which many were enticed with the advent of the well-funded NDIS model in the first place. Co-ordination and access support will remain an important function; however, the mechanism should be broadened outside the disability sector and costs shared between the commonwealth and the states or territories (outside the NDIA spend). Importantly, an impartiality of this function is essential in removing potential conflicts of interest where a provider offers several complementary services.
Implementing these changes in quick succession should cause minimal actual disruption to the life of individuals with a disability and will more closely bond them to a range of non-disability services and a clinical team providing practical and goals-oriented therapy services that work. And freeing up the NDIS spend on plan management and support co-ordination just may go some way to underwriting the recent commitments in Medicare funding that has bipartisan vision but no plan on how to fund it.
Savings on plan management should exceed $1bn a year; and, importantly, removing the “trail fee” style funding model will avoid further ballooning in these fees as participant numbers increase across time.
A vision for the future of the NDIS should include simplicity and a return to commonsense collaboration among service providers across the human services sectors. Removing structural complexity, hidden fees and charges, and unnecessary competition is a good place to start.
James Fitzpatrick is a pediatrician and chief executive of Patches, an assessment and therapy provider. A former Australian Army infantryman, he completed a PhD in medicine in Western Australia’s Kimberley region. He is regarded internationally as a leading clinical researcher in the field of fetal alcohol spectrum disorder and specialises in the diagnosis and management of ADHD, anxiety, autism and FASD.
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