Calls for urgent intervention to stop collapse of more SA NDIS providers
The CEO of Australia’s peak body for disability services providers has called for an NDIS shakeup in the wake of the state’s MS Society calling in administrators. He claims 50 per cent of quality providers are making losses.
Unlike both the federal and South Australian governments, the news of MS Society SA & NT’s appointment of voluntary administrators was not a surprise for the CEO of peak body National Disability Services (NDS).
NDS CEO Michael Perusco told InDaily providers were forced to rely on dwindling cash reserves to stay afloat amid stringent regulation of registered providers, challenges that could mean more providers collapse unless they were urgently addressed.
“We have been highlighting the financial strain that quality providers in the NDIS have been experiencing for some time now,” Perusco said.
“We know that quality providers are fundamental to the success and sustainability of the scheme, and the reality is we can no longer take that for granted.
“We know that over 50 per cent of quality providers are making losses, and the rest are barely breaking even.
“It is really important that this issue is addressed urgently in order to prevent more exits of quality providers from the market.”
His comments followed revelations in InDaily on Tuesday that the Federal Government was blindsided by MS Society SA and NT’s appointment of voluntary administrators.
You might like
A State Government spokesperson also said “we were surprised”.
“The latest we heard from the organisation was last week and they gave no indication that a decision to go into administration was imminent. They were keen to continue exploring options for future grant funding. We were surprised by their sudden announcement on Monday afternoon that they were going into administration,” she said.
“While the State Government does not fund or regulate the services MS Society has provided, our primary concern is with the wellbeing of the individuals who rely on the MS Society’s services, and the dedicated staff and volunteers who support them. We welcome the fact that the administrator has indicated the society will continue to trade.”
The organisation, which assists about 3000 clients living with multiple sclerosis, cited “sustained financial pressures” as the reason for its collapse, including “changes to the NDIS, the recent outcome of the Inclusive Employment Australia tender, and declining lottery sales”.
| Sponsored |
Yesterday at a press conference, Heard Phillips Lieberenz administrators revealed the not-for-profit was in $2.5 million of debt, and had been recording losses for three years.
Administrators said that prior to their appointment, the society employed approximately 70 staff and traded from nine locations.
A Federal Government spokesperson said it was “the first the government has heard of them going into voluntary administration” and the Department of Health, Disability and Ageing would seek further information.
Stay informed, daily
Perusco said his peak body was “calling for more effective market stewardship of the NDIS”.
This includes “independent pricing and regulatory reform”, he said, to assist the six per cent of NDIS companies that were formally registered.
“Those registered organisations are subject to significant regulation and oversight, while the remaining 94 per cent are not subject to any of that,” Perusco said.
“We believe there needs to be oversight of all providers to ensure safe and quality services are provided to people with disability.
“We are encouraged by signals we’re hearing from government on the need for these reforms, and we certainly encourage them to move as quickly as possible, but we also recognise it’s going to take time to do it properly.
“In the interim, we need to see some temporary assistance for quality providers to ensure that they remain part of the NDIS because they are the providers that support those with the most complex needs.”
His comments followed new pricing agreements and price limits that came into effect from July 1, announced by the National Disability Insurance Scheme (NDIA).
In June, NDS said it was “deeply concerned that the reduction and stagnation of prices for critical services – especially therapy and early childhood intervention – will intensify financial pressures for quality services”.
Perusco said the NDIA’s Independent Pricing Committee report showed the pricing framework was “not fit for purpose”.
“The providers supporting those with complex needs were bearing the brunt of the costs,” he said.
“The quality providers that the scheme relies upon were losing money, while other providers were making money, and it’s the organisations that are losing money are those working with people with complex support needs in rural and remote areas.
“It went on further to say that they are only remaining in the scheme because they are being propped up by cash reserves and we are concerned that this cannot go on indefinitely.
“As organisations eat into their cash reserves, they have to make very difficult decisions about the way forward, and the recent announcements are an indication that we are starting to see the consequences.”
The society’s appointment of voluntary administrators also followed the near-collapse of disability employment services and accommodation provider Bedford in South Australia.
That company was rescued by $15 million from the state government, but Perusco said such intervention was “not a long-term solution to effective market stewardship of the scheme”.
