Federal Government to Outlaw Inflated Prices for NDIS Services as Immoral and Profiteering
The Australian federal government is working on a new law that will make it illegal to charge more for products and services for clients on the National Disability Insurance Scheme (NDIS). The practice of charging more for the same product or service once it is known that a client is on the NDIS has been referred to as a twin pricing regime. The Competition and Consumer Act in Australia already makes it illegal to engage in unconscionable conduct, but pursuing a case of this nature can be expensive and requires substantial evidence. NDIS Minister Bill Shorten has said that existing rules have failed to discourage the practice and that it should be illegal to have a twin pricing regime for the same product and service based purely on the fact that a client has an NDIS package.
Shorten has met with Assistant Minister for Competition Andrew Leigh and the Australian Competition and Consumer Commission (ACCC) to discuss creating the new law. He has asked the ACCC if it is possible to give a specific, for-purpose regulation that will make it illegal. Shorten has said that there should be no business model in Australia that makes its profits by discriminating against people with a disability, and he promises to do a lot more on this sooner rather than later.
The co-chairs of the NDIS review, Bruce Bonyhady and Lisa Paul, have flagged a series of potential changes to the scheme, pointing to a lack of clarity, information, and fairness. They have said that the operation of the NDIS does not incentivize high-quality services, fails to drive efficiency, and allows for a culture of fulfilling plans at the maximum cost. The review has been tasked with examining the design, operation, and sustainability of the $35-billion-a-year NDIS, as well as supporting a responsive and sustainable workforce.
Last month’s federal budget revealed that the scheme was the highest-growing government payment, projected to average 10.4% a year over the next decade, down from the 13.8% annual growth forecast in the October budget. The federal government vowed to rein in spending by $74 billion dollars in the decade ahead, including $15.3 billion in the four years from 2023-24. The NDIS Actuary had forecast expenses would grow $17.2 billion by 2027-28 without changes.
The co-chairs heard that payment and pricing methods have focused too heavily on competition, rather than quality and efficiency. They found that some participants faced persistent service gaps and that poor design meant incentives for providers were not aligned with service needs. Professor Bonyhady said blunt price caps meant people with complex needs and those in remote areas often missed out. Co-chair Ms Paul said the fee-for-service model had proven fantastic for some, but on the other hand, it can incentivize overservicing, dependence, and people have said we are seeing many downsides.
The review of the scheme, which has 580,000 participants, has received more than 1,000 submissions. The government insists that there will be no hard funding caps on the program, but it wants to lower the growth of the scheme’s budget. It has announced an 8% a year growth target for the scheme from July 2028.