Opinion: Providers face ‘impossible choice’

The NDIA is failing to effectively steward the market for which it is responsible.

The National Disability Insurance Scheme (NDIS) is conceived as a market-based scheme, designed to leverage the strengths and efficiencies of the private sector in delivering disability supports.

This approach is unique and, in many ways, brave, placing trust in competition and provider diversity to drive better outcomes for people with disability.

Established as the agency at the heart of the NDIS, the National Disability Insurance Agency (NDIA) was created to oversee and administer the scheme, ensuring it delivers safe, effective, and sustainable support for people with disability.

Far more than a passive fund manager, the NDIA is charged with stewarding the market, providing leadership, accountability and strategic direction so the provider market can actually do the things it is meant to do.

That stewardship is failing.

The vast majority of participants with complex needs (those requiring ventilator care, tracheostomy management or intensive behaviour support) are supported by registered providers (comprising just 6 per cent of the NDIS provider sector).

These providers are experts in providing complex care for extremely vulnerable individuals. Often, but not always, not for profit, they are always highly committed to their mission and invest significantly developing their capability for the high- and complex-need cohort.

High-intensity supports were introduced by the NDIA in 2018 to ensure people with complex needs could access skilled staff and appropriate oversight. These supports came with higher price points to reflect the additional training, risk and staffing required.

During the past few years, there has been growing concern across the registered provider sector that participants who previously received high-intensity funding were being downgraded to standard support levels without consultation or explanation.

Providers have reported an average 10 per cent drop in revenue for high-needs clients following the removal of the high-intensity loading, with some providers seeing up to half their complex-needs participants now funded only at standard support rates. This loss compounds an existing funding shortfall for standard supports.

Data from Ability Roundtable (which benchmarks more than 80 major NDIS providers representing about $7 billion in annual revenue) shows the NDIA’s standard hourly rate is already about 10 per cent below the actual cost of delivering care, leaving providers with a growing and unsustainable funding gap.

Needless to say, the consequences of this withdrawal are dangerous for people with complex needs.

This funding erosion is exacerbated by another systemic flaw: the exclusion of providers from the planning process.

Under the NDIS’s emphasis on participant choice and control, families are often expected to determine what supports are included in a plan.

But for participants with complex needs, families may not be aware of the clinical or behavioural supports required to ensure safety.

Providers, who have the expertise to identify these needs, are frequently left out of the conversation.

This means that NDIS plans routinely omit essential components like behaviour support plan reviews, nurse oversight, or training hours for new staff.

This shift has created what many in the sector say is an impossible choice. Providers can either deliver only what the plan funds (risking unsafe care) or absorb the cost of additional supports themselves.

Many choose the latter, driven by a moral obligation to keep participants safe. But that decision is coming at a cost.

There has been a wave of provider exits across the sector. While historically these failures have been largely restricted to the small disability support providers, even large providers once considered too big to fail have faced challenges.

During the past 12 months, large, well-known and highly reputable providers including Centacare Brisbane, Anglicare WA, Therapy Focus, and MS Society SA have withdrawn from the NDIS, with some entering into external administration.

Indeed, the financial strain is mounting, with more than 360 providers exiting the NDIS market in FY25.

High-intensity support services have been particularly hard hit, with closures and service gaps emerging in regional areas and among the most vulnerable participant cohorts.

Who has been the first to feel the effects of these failures in the provider market? Yes, participants with high and complex needs. These participants require costlier supports (skilled staff, more hours), so underpriced plans quickly become unviable. This is unacceptable in a well-functioning scheme.

If the NDIA continues to treat the market as self-correcting, it will preside over its collapse. And when providers walk away, it is not the NDIA that bears the consequences. It is the participants who lose trusted carers, the families who face crisis, and the hospitals that absorb the fallout.

This article first appeared in Business News magazine as part of Amber Crosthwaite’s regular opinion column. 

Disclaimer

The information contained in this publication does not constitute legal advice and should not be relied upon as such. You should seek legal advice in relation to any particular matter you may have before relying or acting on this information. The Lavan team are here to assist.