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What do the allied health NDIS changes mean for your business?
The NDIS has greatly supported the growth of many allied health businesses. This is particularly true in regional and remote Australia, where these services are scarce.
However, the July 2025 updates to the National Disability Insurance Scheme (NDIS) pricing framework could undo that work. With therapy price limits either frozen or reduced, many providers are facing increased financial pressure. For those already operating on tight margins, the impact could be deadly.
What changed from 1 July 2025?
The NDIS has introduced new hourly price caps for therapy services, effective 1 July 2025. These changes, coupled with inflation and rising operational costs, represent a real cut for many providers. Additionally, updates to travel time billing and regional service delivery models have introduced further complexity, particularly for practices servicing remote communities.
Physiotherapy:
Reduced from $193.99 to $183.99/hour (–5.2%)
Dietetics:
Reduced to $188.99/hour (–2.6%)
Occupational Therapy & Speech Pathology:
Remain at $193.99/hour , unchanged since 2019
Regional providers are facing the greatest strain
The July 2025 pricing changes have introduced particularly acute challenges for allied health providers in regional and remote areas. The NDIS enabled allied health practitioners to move to regional areas. They brought much-needed services and injected life into many struggling business communities. The NDIS pricing changes place all of this at risk.
Stricter travel billing impacts on NDIS participants in regional Australia
Allied health businesses in regional Australia already contend with higher travel costs and limited access to resources. They now face stricter limits on travel billing.
This adjustment makes it increasingly difficult to recover the expenses associated with reaching clients in geographically dispersed communities. For many providers, travel is not optional. It is a fundamental part of service delivery. The new constraints, therefore, threaten the viability of continuing outreach to these areas. Some providers must now reconsider whether they can continue servicing remote clients, potentially leading to a reduction in service availability and accessibility.
Shrinking profit margins make the cost of servicing remote clients too high
Financial sustainability is another growing concern. Regional practices often rely heavily on NDIS-funded therapy services to remain operational. With price caps either frozen or reduced, profit margins are shrinking, and the cost of delivering care is rising.
Staff shortages will worsen
Workforce retention and recruitment are also under pressure. Attracting skilled clinicians to regional areas has always been a challenge. Reduced funding makes it even harder to offer competitive salaries or incentives.
As a result, some practices are experiencing staff shortages. Others are seeing increased burnout among existing team members who are stretched thin trying to maintain service levels.
Negative impacts on remote NDIS participants
Perhaps most concerning is the impact on participants themselves. People living in regional and remote communities may face longer wait times, fewer appointment options or even the complete withdrawal of local services.
This undermines the NDIS core principle of equitable access and participant choice. We are leaving vulnerable Australians at risk of being underserved.
How to protect your practice
To remain viable, allied health businesses must take proactive steps to adapt and safeguard their operations.
Review your actual revenue breakdown
First, reassessing financial models is essential. Providers should conduct a thorough cost analysis to understand how the new pricing affects profitability and consider adjusting service delivery to reduce overhead. This might include consolidating travel routes, streamlining appointment scheduling or increasing the use of telehealth where clinically appropriate.
Explore medium-term diversification options
Diversifying funding streams is another key strategy. By exploring private billing options or integrating Medicare-funded services, businesses can reduce their reliance on NDIS income.
Consider partnering with aged care, mental health, or community health organisations. It could open up alternative funding avenues and broaden your service reach.
Advocate for yourself and your community
Advocacy and collaboration are vital. Consider joining professional bodies such as Allied Health Professions Australia (AHPA). They can help you to stay informed, contribute to policy discussions and collectively push for fairer funding models.
Collaborating with other providers can be through shared resources, joint ventures, or peer networks. It can also help reduce costs and improve your resilience.
Make staff retention a priority
A sustainable workforce is crucial amid financial uncertainty. Offer flexible work arrangements, support professional development and foster a positive workplace culture . This can help you retain skilled staff and reduce burnout.
Upskilling teams in areas like digital health and outcome reporting will also align your practice with evolving NDIS expectations.
Explore technological solutions
Operational efficiency should be a continuous focus. Leveraging practice management software to streamline administration and billing, and monitoring key performance indicators (KPIs), can help practices maintain financial health and service quality.
Looking ahead
If your business depends on government funding, you need to be flexible to stay afloat. These changes demonstrate why allied health providers must remain nimble. This type of policy shift and funding adjustment can occur with little warning.
Working with a business adviser with experience in allied health can be a significant benefit. Our job is to be aware of incoming changes and know how to adapt to sudden change. We can help you assess your current operations, plan ahead and build resilience.
FOR MORE INFORMATION
For tailored guidance and support in navigating these changes, please contact your local RSM adviser today.
