In December 2017, the Prime Minister and the Premier of Western Australia announced a new Bilateral Agreement for Western Australia to transition to the NDIS.
As part of this transition, the NDIA committed to review existing price controls and other market settings to determine whether they are appropriate for Western Australia.
Specifically the review aimed to:
- examine the state of the markets for the delivery of disability goods and services in Western Australia, including any substantial differences from the markets in other jurisdictions (eg. labour costs, delivery supports in remote regions, existing level of competition, etc);
- examine whether the existing NDIS support catalogue and price controls set out in the NDIS Price Guide are appropriate for Western Australia (eg. allowances for provider travel); and
- examine whether the existing NDIS arrangements can accommodate Western Australian service delivery models (including innovative support options) and/or identify if Western Australian models can inform improvements to existing NDIS arrangements.
In early 2019 the NDIA commenced the review via an open call for submissions and consultation with selected industry, community, and government stakeholders to identify the main areas of concern for the WA Market. From this, an issues paper was developed.
WA Market Review issues paper and feedback
The NDIA invited providers, participants and other interested stakeholders in WA to give their feedback on the WA Market Review issues paper between 25 February 2019 and 31 March 2019. The issues paper set out some of the key issues and focus of the review.
A total of 56 submissions were received from participants, providers, industry representatives and other stakeholders. Working groups were convened and met six times.
The responses were reviewed by the Pricing Reference Group which made recommendations to the Board, specific to the context of the WA disability market. The endorsed recommendations are being implemented as part of the NDIS Price Guide 2019–20.
WA Market Review outcomes
A key finding of the review was the determination that the cost to deliver services to lower density populated areas is discouraging providers from delivering services to participants in these areas, in effect, reducing choice for participants.
This issue is not just applicable to WA but affects remote and very remote areas across Australia.
The NDIA has increased the remote and very remote loadings on price limits from 20 per cent to 40 per cent, and from 25 per cent to 50 per cent respectively, effective 1 July 2019. This increase will support the ongoing delivery of support services in rural and remote areas right across Australia.
From 1 August 2019, the NDIA will be amending its geographic arrangements so that towns classified as ‘regional’ and completely surrounded by ‘remote’ or ‘very remote’ areas, will be classified as ‘remote’ for planning and pricing purposes. This primarily affects Kalgoorlie.
Reclassifying these areas as remote aims to encourage more providers to deliver supports in these locations.
The WA Market Review outlined six key recommendations to be implemented as part of the Annual Price Review cycle.
List of recommendations:
- From 1 July 2019, the new national price limits published on 30 March 2019 should apply to WA, noting the WA is classified as smaller state for therapy pricing purposes.
- The NDIA should work with the relevant Commonwealth and State/Territory Departments to monitor the economic conditions in Western Australia (and Queensland and South Australia) with a view to making temporary adjustments to price controls to proactively manage any potential impacts on the supply of disability goods and services from economic trends in those states that were contra cyclical to national trends.
- The NDIA should increase, from 1 July 2019, the remote and very remote loadings on price limits and plan funding amounts from 20 per cent to 40 per cent, and from 25 per cent to 50 per cent respectively. The NDIA should examine in the 2019–20 Annual Price Review whether a loading should be applied to price limits and plan funding amounts in outer regional areas.
- The NDIA should amend its geographic classification arrangements so that all towns that are currently classified as Outer Regional by the NDIA and that are completely surrounded by remote or very remote areas should be classified as remote areas for planning and pricing purposes.
- The NDIA should engage with the WA participants and providers to determine whether it would be appropriate to allow share management arrangements within the NDIS, and mechanisms to support the delivery of these arrangements.
- The NDIA should examine the implications of the WA “domestic worker” exception in the Industrial Relations Act 1979 (WA) for the delivery of disability supports under the NDIS.