The NDIS Cancellation Policy: An Up-To-Date Guide [MARCH 2020]
For care providers facing short-notice cancellations and no shows from participants, the NDIS offers a cancellation policy with fees that are fair for both parties.
When participants cancel their appointments late, providers can suffer from financial burdens, especially if they hire staff on a continuous, non-casual basis.
This can (and should) be prevented by clearly communicating your cancellation policy to the participants prior to working with them.
This means that, to be effective and fair, information regarding these policies has to be included upon release of a service agreement with the participant.
Working directly with care providers, we’ve compiled the most crucial info to help you better support your NDIS business without suffering losses due to short-notice cancellations or no shows.
And if you’re eager to get started with your own individual policy, we’re also providing some great examples towards the bottom of the post so keep reading until the end!
NOTE: Due to recent developments with the coronavirus, or Covid-19, the definition of short-notice cancellation is changing from 25 Mar to 25 Sep 2020. All changes made to the price guide during this exceptional period will be highlighted in blue footnotes throughout the article, with additional notes added at the bottom of each section.
What’s The NDIS Cancellation Policy?
As clearly described by the NDIA in their price guide (with a coronavirus-related update released 25 March 2020), a short-notice cancellation is defined as follows:
“A cancellation is a short notice cancellation if the participant: does not show up for a scheduled support within a reasonable time, or is not present at the agreed place and within a reasonable time when the provider is travelling to deliver the support; or has given less than ten (10) clear business days’ notice1Covid-19 notice (25 Mar 2020): this has changed from 2 to 10 business days only for the duration of the coronavirus pandemic. for any other support.”
The NDIA refunds 100% of the agreed support price2Covid-19 notice (25 Mar 2020): this has changed from 90% to 100% only for the duration of the coronavirus pandemic. only in case a participant cancels a service at short notice. Cancellations made 10 days or more in advance are considered reasonable and are therefore exempt from claims.
The NDIA will not refund for reasonable-notice cancellations.
Protecting the providers’ income is the main reason why this cancellation policy exists, but it’s also a universal way to tackle cancellations across all three NDIS support areas, limiting financial challenges such as individual participants dropping out of groups.
Since NDIS providers may not ask for payment prior to delivering their services3Covid-19 notice (25 Mar 2020): this changes temporarily during the coronavirus pandemic. Providers may be able to charge in advance based on the service provided. Please refer to the price guide for specific information., making sure that the cancellation policy is clearly visible in your service agreement is extremely important to safeguard your income.
NOTE: The changes effective March 30 will be reviewed from the NDIA three months after the official release. The cancellation policy will likely be reverted to its normal state in case the Covid-19 pandemic shows signs of decreased growth or halts completely.
The Two Most Common Scenarios For Providers
There are two common scenarios for providers: short-notice cancellations and no shows. Both are covered by the NDIS’ cancellation policy and both can be claimed for a refund. Let’s go through both scenarios to see how you can manage these cancellations.
These are the most common types of cancellations which used to follow the so-called “3PM rule”4This used to be the primary definition of short-notice cancellation where the participant could cancel until 3 PM of the day before the service without facing penalties. The time frame has since been extended to 2 business days (10 during Covid-19). before 1 July 2019.
It’s important to know about this because while this rule has been deprecated, many service agreements still mention it in 2020.
As clearly stated by the NDIA in their annual price review from 1 July 2019:
A short notice cancellation is now defined as when there is a failure to provide: two clear business days’ notice5Covid-19 notice (25 Mar 2020): this has temporarily changed to 10 business days until further notice. for a support or service which is eight hours or less in duration and less than $1,000 or; five clear business days’ notice in all other cases. When claiming a cancellation, providers should request a claim of 100 per cent of the negotiated price. The NDIS payment system will automatically calculate 90 percent6Covid-19 notice (25 Mar 2020): this has temporarily changed to 100 until further notice. of the claimed amount.
The key difference between the 3PM rule and “two clear business days’ notice” is that the former only allowed for a much shorter time frame, especially when appointments were scheduled for next morning. The latter allows for a full 48 hours (240 during Covid-19).
Participants Not Showing Up
This is the second most common scenario and, unfortunately, it’s considered the same as a short-notice cancellation. A no-show is defined as follows:
A no-show is when: a participant does not attend or is not available for a scheduled service or; a participant is not in the agreed location at the agreed time for the service and; they do not notify the provider beforehand.
Due to the increased financial burden of no-shows, many providers take additional measures with individual terms and conditions to protect their income further.
However, these cannot deviate from the official guidelines. It is not allowed to ask for higher compensation from the NDIA or the participant other than the official 90%.
Some protective measures could be: allowing for a certain amount of no-shows per participant or working directly with them to make sure it doesn’t happen over and over.
In both cases, it’s important to take action so that participants can improve their booking and time management skills while minimizing the provider’s loss.
NOTE: With the unprecedented challenges brought by Covid-19 and social distancing measures, the NDIA is inviting providers to minimize cancellations through innovative solutions whenever possible. For example, if and when the participant feels comfortable with it, services like therapy can be conducted through video chat tools such as Skype or Zoom.
Writing Your Own Cancellation Policy [With Examples]
The cancellation policy should be part of a larger service agreement with the participant, but you can also write a separate pamphlet to explain how your individual policies work.
Care providers are allowed to tweak these based on their unique needs as long as they remain compliant with the guidelines provided by the NDIA.
To get this pamphlet done, it’s useful to look at a few examples offered from other service providers across Australia.
Below, we’ve listed three options going from highly visual to semi-visual to text-only. If you want to write your own cancellation policy document, there’s no right or wrong way to style it, but there definitely is a wrong way to convey the information.
In all three documents, we see that the official NDIS guidelines are always mentioned.
No matter what their individual policies are, providers should keep participants up-to-date with the official guidelines and never make up their own rules without mentioning sources from the NDIA.
With all the disclaimers out of the way, let’s take a look at our examples.
NOTE: Writing your individual policies also means committing to keeping them relevant and up to date. Therefore, it’s important to highlight the changes brought by Covid-19 and how they can affect the participants’ NDIS budget and/or well-being. Communicating these changes to your existing clients is just as important as updating the documents themselves.
Parramatta Mission has one of the clearest cancellation policy pamphlets that we found out on the internet and it mostly relies on official NDIS guidelines.
On the first page, we see a brief mention of the two types of cancellations (short-notice and reasonable-notice) together with the old 3PM rule.
The second page showcases the terms specific to Parramatta Mission’s service agreement instead. These involve catastrophes, cancellations on behalf of the provider, and additional information taken from the price guide.
This is a great example of an effective pamphlet that helps people by delivering the right information without overwhelming them.
Feel free to draw inspiration from them!
The cancellation policy document offered by Therapy Matters is a mix between visuals and text. Due to their targeting for children, this document is catered specifically towards helping families understand how cancellations can affect their NDIS budget.
While a bit dense in text, headings and check marks help keep the structure of the document intact while effectively delivering the message.
On the first page we see 3-5 bullet points per section immediately reinforced by graphic representations. This helps the family visualize and memorize the info while keeping their attention. If the doc was plain text, people would likely glance over things.
On the second page we see a similar approach but for more serious cancellation policies. These are the terms that aren’t as immediately relevant to the families but which are still important for the provider to protect their business and move forward.
Finally, Autism Queensland uses a simple, text-only layout to deliver the message regarding their policies. This is effective mainly thanks to their numbered headings which allow for a nice separation between purpose, scope, terms, definitions, and procedures.
Again, we see all major guidelines mandated by the NDIA (reasonable/short-notice, no shows, definition of a business day, etc.) However, moving on from the definitions, we see a detailed explanation of all individual terms that apply.
This is one of the more complex examples of a thorough cancellation policy, but it’s just as effective as the first two thanks to a structured and informed delivery.
As you can see, these policies can be tweaked depending on your target customer.
Some providers allow for more flexible short-notice cancellations by allowing people to cancel in a shorter timeframe while others apply lower fees for different scenarios.
No matter which option you end up going with (visual, semi-visual, or text-only), it’s always important to keep up to date with the NDIA and review price guide updates as soon as they are published.
And if you’re having trouble with that, we might have the perfect solution for you…
Protecting Your Income & Moving Forward
If you write your own cancellation policy based on the guidelines presented by the NDIA, make sure they are fair towards the participant.
Delivering high-quality services that allow your client to become more independent is just as important as protecting your income.
While some NDIS care providers work with clients who cancel many times, it’s important to educate participants and help them understand the value of allocating time correctly.
Thanks to our software suite, Brevity can help you manage relations with clients who tend to overdo short-notice cancellations.
It’s a full management solution made specifically for NDIS providers, and it can help you minimize cancellations while maximizing profits—all in one central hub.
Originally published Apr 1, 2020
Frequently Asked Questions
Yes. The NDIA covers cancellations through specific guidelines for both providers and participants. The official guidelines are found in the NDIS price guide.
First, you need to highlight your cancellation terms on your service agreement with the participant. Then, once the participant has fully understood the terms of their agreement, you can claim cancellations based on requirements mandated by the NDIA.
Compensation-wise, there is no difference between the two. Both will lead to a 90% refund from the NDIA (100% during the Covid-19 crisis) in case the provider isn’t able to fill the spots previously allocated to the participant who cancelled.
The Covid-19 pandemic is bringing major changes to the NDIS cancellation policy in an effort to help providers keep their services viable. Cancellations now require at least 10 business days’ notice (instead of 2). In case the participant fails to cancel within this time frame, the provider will receive 100% of the agreed support price (instead of 90%).