A new independent review has delivered an uncomfortable truth about the NDIA’s latest physiotherapy price cuts. The modelling behind the decision is so shaky it risks undermining access to essential therapy for people with disability.
The Nous Group review, commissioned by the Australian Physiotherapy Association, found the NDIA relied on limited data, unvalidated assumptions and a pricing model that simply does not align with how physiotherapy is delivered in the real world.
The outcome is a national price cap of $183.99 per hour. The real market sits far higher. Depending on the dataset, the 75th percentile rate for standard physiotherapy ranges from $215 to $259 an hour. In other words, the scheme is trying to purchase complex, high-value disability care at a cut-price rate.
The modelling problems start with session duration. The NDIA assumed physiotherapists spend around 45 minutes with a client. Sector data shows the standard is 30 minutes. Inflate the duration and you deflate the hourly rate, which is exactly what has happened.
Private health insurance data provided to the APA shows a 70th percentile hourly equivalent of $236.50. The NDIA’s model spits out $150.50. That is a 54.6 percent gap.
APA CEO Rob LoPresti did not mince his words.
“This review confirms the concerns we have had all along, which is that the NDIA’s pricing approach for physiotherapy is significantly flawed. Pricing does not reflect the real cost of care, including essential components like travel. It limits access, weakens plan integrity and puts provider viability at risk.”
Physiotherapy is already one of the most stretched therapy types in the scheme. Survey data shows 30 percent of physio practices have stopped taking NDIS participants because the fees do not cover the cost of service delivery. Others absorb losses by cross-subsidising from non-NDIS clients. Some restrict travel or reduce complex appointments.
This is happening even though physiotherapy accounts for just one percent of NDIS spending. The price cut saves the NDIA about 0.05 percent of its budget. The impact on participants is far from small.
The review also highlights what the pricing model ignores: the additional documentation, care coordination, compliance and travel that define NDIS therapy work. Ability Roundtable data included in the report shows therapy providers are already operating below sustainable billable hours and, in many cases, at a loss.
Even before the cut, the true hourly cost of delivering physiotherapy under the NDIS exceeded $220. One earlier Nous analysis placed the sustainable value-based rate at $261.
The review calls for more than a tweak. It recommends reversing the price cut, using genuine 75th percentile market rates, reconsidering the travel cap and shifting to an evidence-based approach similar to other national health pricing bodies.
“The evidence is clear,” LoPresti said. “The pricing decision must be reversed.”
And if the NDIA does not revisit its approach soon, the gap between what participants need and what the system will actually fund is only going to grow.
