Flawed NDIS price freeze for physiotherapy fails to recognise increasing cost of delivering high-quality supports, contradicts efforts to reform the Scheme

The Australian Physiotherapy Association (APA) is incredibly disappointed by the National Disability Insurance Agency’s (NDIA) decision to freeze price limits for physiotherapy supports for the coming year.

The unfounded decision contradicts recently announced National Disability Insurance Scheme (NDIS) reform efforts, ignores the rising cost of providing high-quality support and relies on a flawed assessment of current market conditions.

APA National President Dr Rik Dawson said the decision to freeze price limits as providers continue to reel from last year’s price cut places unsustainable pressure on an already fragile market, likely forcing some providers to cease services or exit the Scheme and leaving NDIS participants to pay the price.  

‘For the past seven years, the NDIA has chosen to either freeze or cut price limits for physiotherapy, knowingly placing greater pressure on providers already dealing with the rising costs of providing high-quality supports and putting access to critical support for participants at risk.’  

‘In rationalising this decision, the NDIA suggests that there is ‘insufficient evidence’ that continued price freezes and cuts for allied health providers have negatively impacted participant access to quality therapy supports, while simultaneously acknowledging that they need to do additional analysis on the matter,’ said Dr Dawson.

‘This justification is thoroughly unconvincing, not only because it belies the reality that our members see every day, but also because we know how flawed the process behind recent NDIA decision-making has been.’

‘In the wake of last year’s cuts, the APA commissioned an independent review from the Nous Group which found serious faults in the methodology used by the NDIA to set prices,’ said Dr Dawson.    

The Nous Group’s analysis found that the NDIA’s pricing approach relied on limited data and included flawed assumptions. For example, session times were incorrectly estimated, which distorted the true cost of delivering supports. The modelling also failed to reflect the complexity involved in providing high-quality services to people with disability. As a result, the review found that prices have long been set below sustainable levels, leaving many providers on the brink of viability.

‘Furthermore, our understanding is that the Scheme currently lacks a comprehensive, transparent mechanism to track provider entry and exit, or changes in service capacity,’ said Dr Dawson. ‘In this context, the absence of evidence cannot be considered evidence of a well-functioning market.’  

‘The Annual Pricing Review does not address these concerns, despite the NDIA identifying similar uncertainties in its own analysis, and instead defers substantive analysis to future work, yet still locks in current prices.’

‘Instead of considering the Nous Group’s findings or ensuring sufficient evidence before making such a consequential decision, the NDIA has instead placed more pressures on the high-quality, highly regulated and evidence-based health professionals who have long been the backbone of the NDIS.’

‘The support that physiotherapists provide enables participants to move, engage and build capacity,’ said Dr Dawson. ‘Any lost access to support could lead to reduced independence and ability to participate, and a greatly diminished quality of life.’  

‘This decision is also extraordinarily confusing for NDIS providers across the allied health space who were told just two months ago that reforms to the NDIS would prioritise pricing integrity, keeping ‘high quality’ providers in the Scheme and ensuring that participants would be able to maintain choice and control,’ said Dr Dawson.

‘The APA remains supportive of reforms that ensure the NDIS is sustainable for future generations of participants, but it must not come at the expense of fair pricing, provider viability or participant access to evidence-based physiotherapy,’ said APA CEO Rob LoPresti.      

‘Beginning the reform process by placing additional pressure on the same high-quality healthcare services the Scheme will continue to rely upon, rather than addressing the real drivers of Scheme costs, is both misguided and in direct contradiction of the sentiments expressed in the government’s recent reform announcement.’

‘Long-term NDIS sustainability depends on more than reducing costs. It requires pricing integrity that is based on sound, transparent methodology and data, enabling high-quality providers to remain in the market so that participants can access the timely, safe and high quality supports they need.’

‘If the government is serious about long term sustainability for the NDIS, it must ensure NDIA decision-makers abide by the recently announced reform priorities, prioritise essential support and confront the areas of the Scheme where costs are truly escalating,’ said Mr LoPresti.      

The APA continues to urge the NDIS to engage in robust and comprehensive consultation with providers and sector stakeholders before implementing changes that affect the viability of essential services. The NDIA must give proper weight to the findings of the Nous Review. Without genuine consultation and evidence-based reform, there is a real risk of further eroding provider confidence and pushing an already fragile market closer to breaking point.