NDIS Minister Bill Shorten is urging concerned premiers and chief ministers to back reform of the scheme, saying people with a disability are impatient for change.
Laws before federal parliament aim to contain budget blowouts of the NDIS by limiting spending growth to eight per cent, as well requiring those on the scheme to complete needs-based assessments.
Following a review of the scheme, money allocated to participants would only be spent in accordance with NDIS plans unless needs "significantly change", while a list of services included in funding would also be created.
In a submission to a federal inquiry examining the proposals, state and territory leaders said they were worried those with disabilities might be worse off.
"Sates and territories share significant concerns with the provision of the (proposed laws) and the potential impacts on people with disability," it said.
"We are genuinely worried that this bill undermines the vision of the NDIS review."
But Mr Shorten said people with disabilities could not afford to wait longer for improvements to the NDIS following the review.
"I'd just say to the states, don't make the good the enemy of the perfect," he told ABC radio on Tuesday.
"People with disability don't have time to sit around and wait for the states to catch up, people with disability are impatient for change."
One of the scheme's architects and co-authors of the review, Bruce Bonyhady, also implored for the changes to be approved by parliament sooner rather than later.
"This is a case where governments now all need to work together to deliver these reforms, they need to be done at the same time, they obviously need to work together," he told Tuesday's hearing of the inquiry.
"The status quo was not an option, people with disability and their families are not at the centre of the scheme, they find the current planning processes stressful and traumatising ... staying as it is today is not sustainable."
Prime Minister Anthony Albanese insists funding for the NDIS won't be reduced.
"The NDIS needs to be made sustainable," he told reporters in Sydney.
"What we're talking about here isn't something that's any reduction, it is a lowering of the projected increase in NDIS funding, which would see it unsustainable.
"We want to make sure everyone with a disability gets the support they need so they can fully participate in Australian society."
However, acting chief executive of the Disability Advocacy Network Australia El Gibbs told the inquiry there were still concerns with how the changes would work with the existing framework.
"There are some measures that will harm people with disability particularly the most marginalised," she said.
"Any changes to how support is provided either inside or outside the scheme must not lead to any gaps in the support we receive."
The cost of the NDIS has been predicted to surge to $50 billion by 2025/26, higher than the annual Medicare bill.
NSW Premier Chris Minns called for more transparency from federal Labor on changes that could leave states responsible for providing more services.
"We need to know how much it will cost and how many people it will affect, and what services we will be obliged to roll out," he said.
"The idea the feds will introduce a change we don't have any input in, or South Australia doesn't have any input in, or Victoria or Queensland - none of us are going to accept that."
