NDIS APR 2024–25: The Real Cost for Allied Health
The NDIA’s Annual Pricing Review (APR) for 2024–25 has landed, and it brings a wave of proposed changes that could have significant financial impacts for Allied Health providers.
While framed as a shift toward “differentiated pricing,” many of the changes involve flat reductions to hourly rates and travel reimbursements. These recommendations were published alongside the Independent Pricing Committee’s (IPC) final report and will now inform the updated Pricing Arrangements and Price Limits (PAPL), due out by 1 July.
It’s important to note that these are recommendations only — but if adopted in full, many providers will see a notable hit to revenue and profitability.
Key Recommendations Affecting Allied Health
1. Reduced Hourly Rates for Some Disciplines
Physiotherapy: Reduced from $193.99 to $183.99 (↓ ~5.2%)
Dietetics & Podiatry: Reduced from $193.99 to $188.99 (↓ ~2.6%)
Psychology: Increased from $222.99 to $232.99 (↑ ~4.5%)
2. Travel Claims Capped at 50% of the Hourly Rate
Previously, travel could be charged at the full hourly rate.
Now capped at 50%, significantly reducing mobile clinician revenue.
3. Removal of State-Based Pricing
Western Australia, South Australia, Tasmania and the Northern Territory will no longer have higher regional rates for Physio and Psychology services.
4. Recommendation to Bill in 10-Minute Increments
Encouragement for providers to charge based on actual time using 10-minute increments
The Real-World Impact on Revenue
Let’s model a typical mobile clinician: 4 billable hours and 1 hour of travel per day, 5 days a week, across 44 billable weeks per year.
(Why 44 weeks? Read this blog post)
Before the Change (All Disciplines)
Billable rate: $193.99
Travel rate: $193.99
Annual revenue: (4 × $193.99 + 1 × $193.99) × 5 × 44 = $213,389
Physiotherapy – After the Change
New billable rate: $183.99
Travel rate (capped at 50%): $92
Annual revenue: (4 × $183.99 + 1 × $92) × 5 × 44 = $182,160
Revenue drop: ↓ $31,229 (↓ ~14.6%)
Dietetics / Podiatry – After the Change
New billable rate: $188.99
Travel rate (50% cap): $94.50
Annual revenue: (4 × $188.99 + 1 × $94.50) × 5 × 44 = $188,100
Revenue drop: ↓ $25,289 (↓ ~11.8%)
Disciplines Remaining at $193.99 (eg. OT, Speech) – After the Change
Billable rate: $193.99 (unchanged)
Travel rate (50% cap): $97
Annual revenue: (4 × $193.99 + 1 × $97) × 5 × 44 = $191,620
Revenue drop: ↓ $21,769 (↓ ~10.2%)
What Would It Take to Maintain Revenue?
Let’s go back to our Physiotherapy example. If you want to maintain the same annual revenue ($213,389) under the new travel cap and reduced hourly rate, how many clinical hours per day would be required?
Assuming 1 hour of travel per day (now billable at 50%), we solve for the required billable hours per day:
(183.99 × x + 92) × 5 × 44 = 213,389
Solving this gives:
x ≈ 4.77 hours/day
So, to maintain the same revenue, non-travel billable time would need to increase from 4 to 4.77 hours per day.
That’s a 19.3% increase in face-to-face hours — a major jump in workload that may be difficult to achieve sustainably.
In reality, increasing billable hours will likely also increase travel time. But to keep this model simple and comparable, I’ve assumed travel remains fixed at 1 hour per day.
What Can Providers Do?
These recommendations leave providers with a few possible options to adapt:
1. Increase Billable Hours per Clinician
Rework schedules to maximise face-to-face hours
Reduce travel time through better clustering or hybrid service delivery
Or, simply increase targets
2. Reduce Clinician Pay or Loaded Cost
Not a palatable option for most providers, especially in a competitive job market
3. Cut Operating Expenses
Reassess admin staffing, software tools, rent, or back-office layers
Explore hybrid or remote delivery models to reduce costs
Trim non-essential expenses to improve margin
While cutting expenses can help protect margins without touching pay or productivity, it often comes with trade-offs in support, culture or sustainability. In many Allied Health businesses, operating costs are already lean—so there’s only so much to trim before it affects service quality or team wellbeing.
4. Rework KPI Expectations
One approach could be to count travel as “half” a billable hour. For example, 4 hours of therapy plus 2 hours of travel = 5 'adjusted' billable hours. This reflects the 50% travel cap.
Another option is to exclude travel entirely from KPI expectations (not really feasible in a mobile model)
Depending on your service model, the 50% travel cap may have the largest impact of all, particularly if you rely on mobile clinicians.
Final Thoughts
While the APR’s goal of differentiated pricing has merit, these cuts will put further pressure on an already stretched sector. Allied Health providers are grappling with rising wages, burnout and recruitment shortages — now faced with reduced rates and tighter margins.
It’s more important than ever to understand your numbers, model your scenarios and support your team through these shifts.
Want Help Making Sense of the Changes?
I offer a free 30-minute strategy call to help providers:
Review their numbers
Model revenue changes
Identify smart ways to improve margin
