What’s the deal with the NDIS Therapy Pilot?⁠

If you torture the data long enough, it will confess to anything*

What’s happened?

On 12 March 2026, the NDIS Minister, Jenny McCallister, announced that the Government has awarded $20 million to 27 registered disability service organisations for a 12-month national NDIS therapy pilot.

Under the radar?

The money was awarded to registered providers through a closed non-competitive grant process. Unregistered providers and single-discipline providers were not invited to participate.

What’s involved?

In return for $20 million, the 27 registered providers will share information with the government about:

service delivery;
workforce skills; and
participant outcomes.

Objectives

The Government wants two main things:

participants (and taxpayers) to get value for money for their therapy; and
disability service providers to stay in business long enough to support participants.

Context

Therapy supports make up about 10% of NDIS spending. The government is keen to keep them under control.

Many large registered providers, with high fixed costs, have suffered financial losses for several years, in large part because of NDIS price limits.

Some high-profile registered providers have exited the NDIS over the last couple of years. In some cases, they have gone out of business altogether, including recently.

Given their very real business challenges, registered provider groups have long been lobbying for:

a new price formula to shift incentives away from unregistered providers (who make up over 90% of providers) to “stabilise” the business model of registered providers, specifically a two-tired hourly rate, with a higher rate for registered NDIS providers; and/or
mandatory NDIS registration of all providers.

Selection bias?

The pilot program suggests the Government is listening to multidisciplinary registered providers.

A key open question is whether they are also listening to the ~94% of therapy providers that are unregistered, and the participants they support.

In their final pricing report released in June 2025, the Independent Pricing Committee said that: “[w]e are not suggesting the [NDIA] should be targeting any one market structure with respect to the contributions of small versus large providers, for-profit versus not-for-profit providers, or registered versus unregistered providers.” (p 44).

In August 2025, an NDIA spokesperson was equally clear: “The NDIA does not directly fund providers, but allocates funding to NDIS participants and business decisions, including whether to continue offering services through the NDIS, are a matter for individual organisations.”

It’s unclear how these statements fit with the closed non-competitive grant process or even the stated objectives of the pilot.

What’s the bigger picture?

It’s equally unclear how decision-makers plan to use the data collected from a selected, single part of the sector, as they set about restructuring the entire supply side of the NDIS provider market. It’s also unclear how the results will affect the next wave of NDIS reforms, which are made up of several parallel developments, including:

Once more with feeling: “registration” does not guarantee quality or safety

The government – once again – appears to have conflated “registered provider” with “high-quality provider”. In its press release, it has explicitly endorsed the grant recipients as quality providers:

The pilot is called the “NDIS Quality Supports Program”.
To quote the Minister: “By working closely with a range of quality providers, we’ll learn crucial information that will make the NDIS stronger now and into the future.” (emphasis added)

The press release names three reputable providers. But, if you dig into the full list (scroll right to the bottom) and do some cursory checks, you’ll see some of the grant recipients are known to the investigation units of the NDIS Quality and Safeguards Commission and/or the Fair Work Ombudsman. (I won’t name names: you can check for yourself.)

Bottom line

The NDIS can’t function without a sufficient supply of quality providers across the country. Unfortunately, lots of providers – registered and unregistered – are considering reducing their NDIS work or exiting the NDIS for financial reasons, including in response to worsening business conditions and years of price cap erosion due to inflation.

The problems faced by large multidisciplinary registered providers are very real. But, if we end up with a two-tiered pricing model that effectively drives more small, single discipline providers out of the sector:

participants will have less choice and control over their providers; and
large providers will have less competition, reducing incentives to invest in better quality services, participant safety, or innovation.

You don’t maximise participant choice and control or outcomes by reducing competition between classes of providers. Nor do you improve the NDIS by removing incentives for small providers to innovate and to provide local services to participants in communities in ways that can’t or won’t be delivered by larger organisations.

* A quote from economist Ronald Coase

This article also appears in a recent issue of Banter Booster, our free newsletter navigating problems for busy speech pathologists, one week at a time.