NDIS agency raises alarm over cost controls
The agency delivering the biggest social reform since Medicare has admitted that it cannot control the $22 billion cost of the program unless drastic changes are made to increase its power to demand evidence and clarify the definition of disability.
Documents obtained under Freedom of Information show the agency to run the national disability insurance scheme is concerned about whether it has the “capacity required to control costs” and wants amendments to the planning process to give “greater practical weight to the need to take an insurance-based approach in planning”.
The agency has never publicly conceded there are risks to the financial sustainability of the landmark NDIS, which begins full rollout in July, when it must scale up from 30,000 participants to 460,000 in three years.
The submission to an independent review of NDIS legislation conducted by Ernst & Young sets out the scale of the challenge.
“ ... During the rollout of the full scheme the agency will be required to make approximately 12,000 decisions each month,” the agency’s submission says.
However, despite the concerns, NDIS chairman Bruce Bonyhady denied that there were significant issues with the scheme.
“The fact that the NDIS is on budget is not luck,” he said.
“In addition to vigilance by management, it reflects the benefits of an independent board, legislation which makes scheme sustainability the top board priority (and) intimate knowledge of the scheme by the board.”
The submission reads as a shopping list for changes the agency seeks because it says “the (NDIS) Act and rules are silent on significant amounts of implementation and operational detail”.
Under the rules, the NDIS chief executive is allowed to specify diagnostic tools for access to the scheme, but the agency wants similar powers for the chief executive to be able to dictate what is considered “beneficial and effective” for support and specify what constitutes “value for money”.
The NDIS bosses cited a case in which the Administrative Appeals Tribunal overturned an agency decision to refuse chiropractic treatment, saying it was reasonable and necessary because the agency had no power in the act to limit the kind of evidence it required for treatment.
Bosses also warned of “inequity” that could arise among groups who received compensation payouts for their disabilities.
“If a person uses their settlement (intended for lifetime care) to instead purchase a property then the agency will not be able to reduce their funded supports because, under the act, there is no recoverable amount,” the submission says.
“An identical participant who uses their settlement for the supports intended will have a recoverable amount and the legislative regime will allow for a reduction of their funded supports.
“Both participants end up with the supports they need under the NDIS Act, but the first participant is in a better financial situation.”
A spokeswoman for Social Services Minister Christian Porter said the review would be discussed by governments at the Council of Australian Governments, with any “necessary amendments to the legislative framework” to follow. “ ... We want to ensure it operates in the best, most efficient way possible,” she said.