People living with disabilities face systemic risks under an insurance system plagued by limited visibility, poor regulation and widespread integrity issues.
The organisations delivering these services are confident a government crackdown on unscrupulous providers will improve safety and increase quality care.
During a parliamentary inquiry on Friday, the nation's peak body for disability providers described integrity risks in the National Disability Insurance Scheme as "systemic, not isolated".
"They've emerged in a system with limited visibility, uneven regulation and incentives that do not consistently reward quality and compliance," National Disability Services' Director of Policy and Advocacy Karen Stace said.
The latest government reforms - which include tightening eligibility alongside tougher provider registration requirements - will improve safety and increase the quality of support provided, she added.
Sweeping reforms enshrined in the federal budget this week hope to rein in the spiralling cost of the $50 billion scheme by clawing back $37.8 billion over the next four years and clamping down on widespread fraud.
New laws introduced on Thursday will require Australians to have exhausted all other treatment options before they are considered permanently impaired to enter the scheme.
The bill will also give Health Minister Mark Butler sweeping powers to put a break on certain parts of the program as well as to enable automated decision-making.
National Disability Services chief executive Michael Perusco also called for mandatory registration of all providers to make the scheme more transparent and accountable.
With about 94 per cent of NDIS providers currently unregistered, most are able to operate outside consistent regulatory oversight, limiting transparency and early risk detection.
Mr Perusco said a commitment to more guardrails including the registration and enrolment of providers was "badly needed and overdue".
A system that supports providers in doing the right thing and creates more visibility over the market will benefit everyone involved, he added.
"The changes are now starting to kick in and will make a difference."
Professor Jennifer Smith-Merry from the Centre for Disability Research and Policy at the University of Sydney also drew on research conducted with NDIS participants, carers, and stakeholders from across Australia.
"Highly vulnerable participants ... are actively targeted for scams, coercion, and financial exploitation," findings submitted to the inquiry read.
The researchers found providers often take a "minimalistic approach" where non-compliance is normalised.
NDIS participants reported routine tasks being poorly completed, despite long billed hours.
"It clearly says what people have to, do but it's a nightmare to get them to do it," one participant said.
"I check all invoices… the amount of invoices I have seen that are claiming for time that they haven't done, services that they haven't performed ... 50 per cent of them I'd say and nobody checks," another reported.
