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Joint Standing Committee on the National Disability Insurance Scheme
14/05/2014

BONYHADY, Mr Bruce, Chairman, The National Disability Insurance Agency Board

BOWEN, Mr David, Chief Executive Officer, The National Disability Insurance Agency

JOHNSON, Ms Sarah, Scheme Actuary, The National Disability Insurance Agency

Committee met at 11:32.

CHAIR ( Mr Brough ): I declare open this hearing of the Parliamentary Joint Standing Committee on the National Disability Insurance Scheme and welcome witnesses. In giving evidence to the committee today you are protected by parliamentary privilege. It is unlawful for anyone to threaten or disadvantage a witness on account of evidence given to a committee and such action may be treated by the Senate as contempt. The giving of false evidence will be treated by the Senate as a contempt. It is also a contempt to give false or misleading evidence to a committee. Under parliamentary privilege, an officer of the department of the Commonwealth also shall not be asked to give opinions on public policy and shall be given a reasonable opportunity to defer questions to superior officers or to a minister. We do not mind if you do not have an opening statement, but if you want one you are most welcome to. Welcome, again.

Mr Bonyhady : If I could just make a very short opening statement, thanking you for the invitation to appear before you today so close to the availability of our third quarter results. Briefly, there were 6,434 people who had been deemed eligible, as of the end of March; 5,414 of those had packages allocated to them. The intake is therefore in line with the intergovernmental agreements. Client or participant satisfaction is running at 1.66 on a scale of minus two to two. That means that, on average, satisfaction sits between satisfied and extremely satisfied. The costs of the scheme are tracking well.

Looking ahead, we expect that the data will continue to be volatile quarter-by-quarter. In particular, over the next quarter more participants from Stockton will come into the scheme and also from Caloundra in the Barwon launch area. So to gain an assessment of the underlying costs, it will be necessary to make some adjustment for that.

The work that has been underway has resulted, I think, in these improvements in the scheme performance both in terms of the rate of intake and cost control. But the agency is not resting on these results. It continues to work on the efficiency of the scheme and in particular it is looking to use the WHO Disability Assessment Schedules to create a stronger quantitative link between assessment and packages. The agency is working with experts to identify typical support packages for the more common disabilities and functional impairments and there is work underway to restructure the way supports are delivered so that rather than focusing on this very long catalogue of supports of over 700 items, participants will be allocated amounts for capital, for equipment and, in particular, for investments for early intervention supports, therapy services and behavioural support and for consumption—personal care and support, recreation and so forth. We believe that that will then enable participants not only to exercise control and choice at the time that the package is allocated but also when using their packages, and that will also over time drive efficiency and innovation.

The priorities for the agency at the present time are focused on three areas: organisational capability particularly in the context of the head office moving to Geelong; operational improvements, which are obviously the items I referred to a moment ago; and work on developing the market with a focus on how to shape demand so that it is not just demand for traditional services but how to assist providers in adjusting to the new market and bolstering supply, and workforce issues with the projected increase of over 90,000 full-time equivalent by the time the scheme reaches maturity. Thank you, Chair, for the opportunity to make those introductory remarks and, along with my colleagues, we look forward to the discussion and questions from the committee.

CHAIR: Thank you. Just to clarify, what we have been seeking to do over the last four visits to the trial sites is to give people a sounding-board and then to provide that information to your agency and to state and federal bodies as well. On behalf of the committee, we thank your staff for their attendance at all of those and their contribution. We have appreciated it. It has not always been pretty, as you are well aware, and some trial sites have found it more challenging than others. We are mindful that you are monitoring what has been given as evidence and responding to those things, and that is the sort of practical approach that we wish to take to it.

This morning, in the limited time that we have got, we should just tackle a few issues that were head of mind. One of the reasons we asked Sarah here was probably contrary to what you thought. We did not get what we wanted because Sarah does not do what we thought she did. We heard two extremes: one concerning the bottom end of the market, which varies in cost between South Australia and Victoria, and the unaffordability for the sector to provide services; and then at the other end of the sector for OT things—and we did not hear this once, we heard it quite a number of times—with people going to the tables, which were referred to us as 'actuarial tables' but that is probably not an accurate reflection, and typically where people were previously paying $80 or $90 they were now paying double that, because the tables reflected the maximum that the agency would bear. If I were self-managing, I had a much better chance of actually getting a service or a product at a much lower rate from the same provider than if that same provider was billing directly to NDIA. They are real-life experiences—we are not asking you to comment on whether they exist.

I think we should start with the tables. Obviously it is a work in progress and, without leading you, can you tell us where that is all at and about those issues that have come to light and what your plan of action is?

Ms HALL: At both ends of the scale.

Mr Bowen : In terms of the compliance about the prices being too low, it has really come down to one or two items, although they are very significant, and that is the price for the hourly rate of personal care. That applies across a number of circumstances. We have just entered into an agreement with NDS—National Disability Services—to work on that review of the prices. It was very important from our perspective to make sure that price was considered as one aspect that needed to be dealt with by providers in transitioning from where they are to a contestable market. We did some analysis on the current providers' cost structure and that threw up quite a significant variation in how the providers currently price their services in terms of the levels of on-costs and administrative loading, so we have got that as a little piece of background work.

Ms HALL: Can I just throw something else in there when you are answering this question and something we heard in other places? The costs associated with cancellations and no-shows—that is looking at the overall—

CHAIR: You cannot bill for something where no-one has actually provided a service even though the service is part of the package. You know what we are referring to?

Mr Bowen : Yes, so there is in our fee schedules the scope for people to charge a fee for cancellation. It comes out of the person's package.

Ms HALL: I just handed a submission in today that deals with that in great detail.

Mr Bowen : It comes out of the person's package.

CHAIR: That is certainly not reflected in the evidence. Consistency—this is very important. I will give you an example: a carer turns up for six hours—it could have even been eight hours—for a young lady with schizophrenia. 'Sorry, I don't want you here today.' They could not bill the agency and therefore still had to pay the individual but they were not being paid. Can I just tell you that this is a consistent message.

Mr Bowen : I am happy to a take it on notice and we will come back with an answer on the particular aspects where there has been wrong information given or the provider has not realised the options available to them.

CHAIR: This is really significant, because I can assure that when we raised this with your officers, they did not have the expressions on their faces that you just had. It was like: that's life—excuse my language—but tough titties, that's the way it is. So there is a miscommunication somewhere of huge magnitude.

Mr Bowen : Let us come back to you on that then.

CHAIR: Can you come back on another one? If I have one hour of care—it does not matter if it is two or three hours—is that one hour in my home or is that one hour including my travel and on-costs? You do not need to answer it now, because we got different answers in different jurisdictions. We need to know what the policy is and your perspective on it as it is not being handled consistently now—that is a statement of fact—and clarification needs to be sought.

Ms HALL: The impact on a participant's package.

Mr Bowen : So we pay travel time, and travel time is included in a participant's package when it is beyond a certain number of kilometres. I confess I cannot exactly recall what the—

CHAIR: Ten kilometres is included as part of that. We might just throw in there: if you have got 11 kilometres in Sydney, you could be 40 minutes away; if it is 11 kilometres in Wagga, you are probably not.

Ms HALL: Five minutes.

CHAIR: So there are those issues but, more significantly, if the hour that my son or daughter is receiving means that there is an hour in my home, then that has major implications for the cost to the service provider. On the other hand, obviously they have to bill them—and this has been raised consistently. It if it the other way round and the hour is not inclusive—in other words, my travel time; and we heard this as well—then my package says I am getting three hours. By the time they get there and back and do this and do that, he is actually getting an hour and a half. We will just leave those issues for you to ponder, David, and if you could take them on notice and come back. We are interested in two things. What is the agency's real position? Please let us know how you will try and remedy what is obviously an inconsistency.

Mr Bowen : Of the work we are currently doing—and this goes to the element for providers of the level of utilisation of their labour—we do not expect that a provider can utilise labour at 100 per cent but we think 80 per cent is reasonable and we are working through that with NDS at the moment.

Senator SIEWERT: I want to ask you a broader question that relates to this issue about inconsistency. You may take this on notice. There is inconsistency across the trial sites. Why is there this inconsistency in the approach taken, the way people are treated and the way people are communicated with? Then there is the issue around the inconsistencies in hours and the approach taken to funding. If you can answer this question now that would be great. If not, you can take it on notice. The difference between the trial sites is very noticeable in the way people are handled—

CHAIR: It is not just that they have individual packages and therefore different goals and aspirations. We accept those differences. But there have been fundamentally quite different approaches. Would the committee agree with that?

Ms HALL: Absolutely.

CHAIR: We understand that it is a work in progress, but some cases were night and day.

Ms HALL: To add to that, there are differences in the individuality of the packages. Some sites develop an individual package that is designed to meet the individual needs of the participant whilst on other sites people are given a standardised package linked into a cost structure that does not necessarily meet their needs. They are told they can have a package that is between $12,000 and $16,000.

Mr Bowen : We need to distinguish between packages of funded support for people with a permanent disability and the early intervention packages, which operate off a classification system in the allocation of dollars.

Ms HALL: I am talking about people with permanent disabilities.

Mr Bowen : The $12,000 to $16,000 range is one of the classification ranges for early childhood intervention. Our classification system was developed in conjunction with a whole range of experts. I am happy to come back and table the list of people who were consulted in constructing that. It was not something the agency thought up. If a child has a need beyond early intervention and therapy, they will be a permanent disability participant in the scheme and will get the additional support they require.

Ms HALL: We have received evidence about participants having their packages reduced considerably, not just in dollars but in services, from the packages they were receiving prior to being accepted as a client of the NDIA.

CHAIR: I will just add two things, for Jill's benefit. Some of this evidence was given in camera.

Ms HALL: Oh, right.

CHAIR: Let's deal with the evidence that was not first in South Australia, which obviously predominantly had to do with children and early intervention. The packages were for six months and then automatically reviewed. Package A had, say, 100 hours of OT and the participant was happy with that and it was in line with the state plan they had been using previously. They came back after six months and did not really understand what had occurred in the planning meeting. We heard this from a number of people. Then when the plan came they found that their OT hours had been literally cut in half and they were saying, 'Oh, my God, how does this work?' There were all sorts of other implications, such as they had continued on and then did not have the money and did not know how they were going to pay. But we can deal with those issues separately.

Mr Bowen : Clearly, we do not dispute the evidence, but I would like to look at the numbers. We could tell you the number of people who have had a review and had a decrease.

CHAIR: That would be good.

Mr Bowen : One of the things that should be looked at is: was the decrease because a person had utilised only a part of their package? Were we adjusting the second package to match the level of utilisation? There was no doubt that some of those first quarter packages had in them, for example, amounts of therapy that were simply unable to be delivered to the child in a normal week.

CHAIR: That is really important. If you could take that on notice and provide to us what percentage of the overall packages that have been reviewed have been downgraded substantially that would be good. Does that sound fair to the rest of the community? We are only interested in substantial—

Ms HALL: Also, the complementary issue that probably needs clarification from you is that some participants were being told that they could not pay themselves to prop up the packages that were being reduced.

CHAIR: We will just leave that one and come back to it. I know where you are coming from, but it is a separate issue. We will deal with Jill's other issue and then go to—

Ms HALL: I thought it was a little bit related to what you were saying about packages not being—

CHAIR: They were not packages. They were individual services where you had a fee and then the service provider was providing extra. Some people have been told, 'No, you cannot pay extra.' The service fee is $40. This is $50—an extra $10.

Ms HALL: Sometimes when the OT was cut they went and bought it themselves. That was the other aspect.

CHAIR: The other part of Jill's point relates to people with a permanent disability who had packages from their previous state jurisdictions valued in the order of $130,000—but the value of their package with the NDIA was in the order of $45,000. I cannot really say more about that in public, but we can talk about it separately.

Mr Bonyhady : Whatever you can provide us with would be of great benefit. Please let me put a bit of context around the questions you have been asking us. The origins of this scheme are accident compensation schemes. In accident compensation schemes, there are three types of catastrophic injury—spinal cord, brain and burns. There are now, as a result of the long history of the operation of those accident compensation schemes, clear links between the functional impairments that arise from the different levels of those types of injuries and the sorts of support packages that are reasonable and necessary. We are building that sort of information now for cerebral palsy, for autism, for spina bifida, for multiple sclerosis, for motor neurone disease—all the other types of disabilities and, particularly, the functional impairments that arise from those conditions—as part of building this scheme. There is therefore a trade-off that we are working our way through between taking people into the scheme, collecting the data and then developing these packages. In striking that balance, we have had to identify ways of assisting our planners in the short term to make that assessment. Some of the reference packages to which you have referred, such as the early intervention packages, are designed to assist with that. They are not intended to bound the outcome.

Ms HALL: That is the message that you need to get out to the trial sites—the fact that they are not there to bind them.

Mr Bonyhady : The operational guidelines make it very clear that these are guidelines. They are not mandatory limits. I think that—

CHAIR: It will disappoint you to know that on too many occasions with too many different plans we have heard that the clear implication to the participant was, 'This is it—you can get more but it will have to be reviewed.' We all know that people are very stressed, particularly in South Australia where there are young children and perhaps it is their first involvement. We understand all of that. It is just very important, I think, from your own perspective, that that does not morph into people believing, 'This is it—end of story.'

Mr Bonyhady : We find the information you have given us today very valuable. I think the other point to be clear about is that when it comes to early intervention and the transdisciplinary approach we are taking, which is regarded as best practice, that is running into some participant perceptions—the families particularly often have this perception—that support should be much more individually structured, when there is clear evidence that working in groups often has very significant benefits. So there is clearly some education that needs to go on and we undoubtedly need to get better at that.

Senator SIEWERT: The issue I wish to move to is the review process, and reducing the package because they had not used some of the funding. We received evidence about this and the particular point I would like you to look at is: the packages were backdated and therefore they were not used because they were backdated.

Mr Bowen : We have evidence that they—

Senator SIEWERT: Yes, they were. Look at the evidence.

Mr Bowen : There is a date on which the plan is approved by the agency and the person is notified of that. There may be a delay in when the person starts to use that plan and go to providers, but that is in the person's control not in the control of agency.

Senator SIEWERT: They call it backdating.

Mr Bowen : We do not fail to notify people of plan approval.

Senator SIEWERT: Some of this evidence is on record; some has been given in confidence.

CHAIR: But this happens so often—to the point that people have actually had to repay money. These people have had a plan approved; it said it started back then, and it had changed from their first plan, so they continued using the existing, original plan, and had to pay the money back to their OTs themselves.

Ms HALL: You need to look at the South Australian evidence.

Senator SIEWERT: The point is: if they are being classed as not having used the money, and it is because the plan has been backdated or they have not used it, and that then counts against them and they get their package reduced—I am sorry, but if that is what has happened it is outrageous.

CHAIR: We need to throw two other things on the table as well—and these are really big things, and they all play into the same issue. There are two other reasons why they may not have used the plans. We are hearing, anecdotally—and that is all this is—that 20 per cent of people are not activating their plans. We continued to ask about this when this problem first came up, and everyone—all the different parties in all the different regions—agreed that about 20 per cent of people are not activating their plans. So they have a plan; the paperwork has been done. Sometimes it is because the person is just not capable of using it at that stage; they do not have the competencies or the support at that stage. Sometimes it is because the particular service is not available. When you look at the figures they are concerning. To what extent are we aware of the availability of sufficient services so that people can use their package? If these packages are not accessed they will be reduced and that becomes very bureaucratic. Have you got any capacity to see how many people are not activating their complete or partial packages, and to understand why? That could impact all of those answers.

Mr Bowen : We do not get notification as to when a person starts to use their plan until we start to get invoices from service providers. This is a scheme in which the relationship is between the person and the service provider, not between the agency and the provider. That is very important. In fact, it is a key principle behind the scheme.

CHAIR: Of course, one of the problems with that is that if I have a mental illness or something I might not activate my plan for months. I may need to access it but I may simply not have the support mechanisms to allow me to get started. Then, if we take that through to the next step, when my package comes back for review you will say, 'Well, Billy did not use much of his package so he does not need as much.' I do not know what your safeguard against this is. I hear what you are saying, but perhaps it is something that needs to be given careful consideration at a board level as well. It is important to understand that, at the early stage of a package, bits of paper are useless unless they are activated. After the plan is given it is important to follow up. I know they have a right to access that plan after it is granted, but it is also important to understand some of the reasons why they are not accessing them, because this seems to result in multiple and cascading impacts.

Ms HALL: The thing I wanted to add to my earlier comments was a point on the plans. The cost of the plan is not necessarily it—a person could be offered a plan that costs a lot less. It is making sure that the plan has the services in it that the person needs. So it is all about the services and making sure that the plan covers the needs of the person. It is not the cost that is primary. Quite often, in their package, a person may be given a smaller dollar amount but be given more services and services that are more appropriate. We are not debating just the cost; it is about other issues as well. This is going back a long way; I wanted to add that to what I said earlier.

Senator GALLACHER: Do you have anybody actually listening to these hearings? Can I assume that these are not new items to you?

Mr Bowen : We have our General Manager of Operations, Liz Cairns, who I believe—

Senator GALLACHER: I will give you a very specific one, which should be just a bread-and-butter issue for anybody to fix up. You have a taxi operator saying the system does not work and you have users saying it is fraught with danger and fraud. What has your department done about that—the taxi issue that was raised in Geelong?

Mr Bowen : I cannot answer such a specific question here.

Senator GALLACHER: It is a very general thing. It has come up in a couple of places—people say this system is not right. I would have thought the department would have said, 'We'll nail that' and just give the committee an answer.

Ms HALL: But that is the kind of thing that you evaluate and—

CHAIR: I am a little perplexed, because I know that managers have sat in and I am surprised that you are so surprised at some of the issues that we are raising.

Mr Bowen : Certainly at the issue about inconsistency, but inconsistency covers a lot of potential territory. Whether it is inconsistency in the approach or the outcome or the output of the plan or the relationship with the person—

Senator GALLACHER: But when a taxi operator says the invoice system does not work—it either does or it does not. That is a very specific allegation.

CHAIR: The taxis in Geelong—there are a number of things. I get into the cab and they do not know whether it is an NDIA fee or a non-NDIA fee. They do not know how many fees I am allowed to have and how many I have accessed. If they take it on good faith and they put the bill in in a month's time, they say, 'Sorry'. Then we have OTs—all of this has been given in evidence in open session—and I exercise my right to have two OTs doing the same thing; I just do not tell them. I tell OT No. 1 that I have 10 sessions and I see that—and I am allowed to see that. I do not bother telling OT No. 2 that I am already dealing with OT 1, and no-one has vision of it. So, OT 2 does the service as well. They put their bills in once a month. OT 1 puts it in once a week—OT 1 has used all the money. OT 2 now puts it into you and they say, 'Sorry, this is used up.' No-one has any vision of that. These are really big issues for the sector that have all come up in evidence, which I was hoping would have already been exercising the mind of the management with developing answers to these things. There are a plethora of them.

Let us distinguish David: there are those issues that are teething problems and things around individuals—we accept all of that and we know it is a big issue and you are working hard at improving people's attitudes and openness and all the rest of it. But then there are a lot of these structural issues that are absolutely critical to—

Ms HALL: Delivering the products successfully.

CHAIR: Delivering the products successfully and the success of everyone, the No. 1 group being the service providers, who are totally inadequately skilled now. I do not have to ask the question; that is just a statement of fact for 99 per cent of them. And they are dealing with these things. I think it might be best, if the committee is happy to, to put together a range of questions from the things we have all worked up and ask you to—

Ms HALL: In writing.

CHAIR: We need to know that they are being addressed, but we need to know that you have exercised your mind on them too.

Mr Bowen : I will get back to you on that.

Ms HALL: From my perspective, part of what I have been doing over the last few weeks, going out to the sites, has been about getting information and then being able to share it with you guys so that you can then look at how to better improve the way the scheme is working. I think it is such a vital scheme and so vital to so many people. I know that everybody around the table is totally committed to making sure it succeeds. I know you guys have put so much of your life into this and to seeing that it is successful. Part of what we are doing is trying to help you.

Mr Bonyhady : On behalf of the agency, we would welcome the feedback. If you see that these particular issues have implications for scheme design, we would certainly like to hear them.

CHAIR: We will do that. We have run out of time today and everyone has an incredibly busy day. Do you want to take this on notice? We have asked all the other agencies: where are the big risks now for you? What are your highest priorities—not you as an agency, but the scheme? Do you wish to have a go at that or would you rather also give that a bit of thought?

Mr Bonyhady : I think the biggest risk relates to developing the market. A number of these issues go to it. It is about the shape of demand, it is about building the supply side and it is about the workforce. That is the big risk. There is a lot of work on that going on. It is, as you would expect, work in progress.

Ms HALL: What impact would it have if the scheme implementation was extended, if the period of implementation was extended? How would that impact?

Mr Bonyhady : What the agency has said to all governments—the Commonwealth government and also state governments—is that we are looking at transition to full scheme as part of a number of issues that we are looking at, with a view to giving some advice on the optimal timetable. In doing that, we are looking at different transition paths and what the risks are around them. I think it is important to note that at this point all that has been agreed between governments is the start date of that next phase of transition from 1 July 2016 and the end point—in New South Wales and South Australia two years later, the other jurisdictions three years later and Western Australia yet to be agreed. What we are doing with KPMG is looking at the evidence as to what would be optimal, with a view to coming back to governments on that point.

CHAIR: Do you have a rough time frame for when you think you will be in a position to come back with some of your thoughts?

Mr Bonyhady : We would expect to be able to advise governments by the middle of the year on that point.

CHAIR: Yes, because you were saying to Sarah about how long it would take for the actuaries to be able to put some robustness around her assumptions with numbers, towards the end of the year at this stage, so we understand those two things interplay as well, so that you have that.

I think we better leave it there today. Thank you very much for your ongoing work, as everyone has indicated. We know there is a hell of a lot more work to be done and we are all here in this together to make it work. Do not take any of our criticisms as being anything other than constructive.

Mr Bowen : We absolutely welcome them. In fact, we encourage our own staff to let us know if there is a problem.

CHAIR: I would encourage them to too. Thanks very much. We declare the meeting closed.

Committee adjourned at 12 : 07