The NDIA has released its 2017/18 pricing review with price increases to three support services. However, there will be no increases for therapy services although there are changes to loadings for remote areas and therapy cancellations. The NDIA is also undertaking an Independent Price Review.

Both initiatives are integral to the National Disability Insurance Agency (NDIA) commitment to grow the market for disability support and services with a view to establishing a balance between demand and supply. A decision that NDIA chief executive David Bowen said was critical, not just to participants and providers, but to the sustainability of the National Disability Insurance Scheme.

Price increases have been attached to the following support and service: 4.5 per cent for daily activity and community participation, 1.9 per cent for capacity building and 2.1 per cent for capital related, supports. Therapy services cancellations have also been amended with providers able to charge up to two participant cancellations for therapeutic supports per annum. Each cancellation charge must be for no more than two hours of support and may only be applied where the participant has failed to give 24-hour notice.

The price changes were announced in a letter to service providers from David Bowen who said perspectives and data from a number of sources were taken into account for review. Submissions came from 82 providers, including providers and participants to the Productivity Commission and economic data from the Wage Price and Consumer Price Index and the Fair Work Commission.

The NDIA is immediately implementing an Independent Pricing Review which will be undertaken by McKinsey & Company, “given the wide range of other issues raised in the FY 2017/18 Price Review,” Bowen said. Participants, providers and other stakeholders would be consulted and provided shortly with information about how to engage with the review which is expected to deliver its Final Report to the Board by the end of 2017.

Better understanding the wide range of issues that have been raised is vital to creating a strong, innovative and reliable market, which will eventually lend itself to price regulation. “More specifically, it is integral to generating an improved outcomes focus for participants, allowing them to exercise greater choice and control. Attracting more providers to offer a broader array of quality, innovative services in local markets where demand exists,” Bowen said.

While price controls are currently in place during the ramp-up of the NDIS, as the market matures in size, quality and innovation, it is envisaged that prices will be deregulated and determined by market forces, he said.

Price changes will be effective from July 1, 2017.