The disability royal commission is this week examining the experiences of thousands of First Nations people with disabilities in isolated communities.
Deputy CEO of the First Persons Disability Network, June Riemer, said she was aware of nine families in Utopia, about three hours' drive from Alice Springs, with children with severe disabilities who never left the house.
"For our vulnerable families who may have children with severe disabilities, they're afraid they'll be taken rather than supported," she told the inquiry on Thursday.
"They were hidden from the community because there was a fear that the children would be be taken. There is that fear across Australia."
First Persons Disability Network CEO, Damian Griffis, said the organisation has pushed for a co-design approach with the National Disability Insurance Agency since it was created in 2013.
He called for greater Indigenous leadership within the agency, training for people to assist those in their community with a disability and for care planners with First Nations backgrounds.
"We have to build a system that respects (that) people have the right to live on country. We need to design systems that enable that," he said.
Mr Griffis said seeking help came with "risks" in a system that makes judgements and doesn't understand the power imbalance between it and Indigenous communities.
"Very few Australians have a real understanding of the lives of First Nations people in regional and remote Australia," he said.
"There are things that we see in regional and remote Australia that are deeply traumatising. I'm aware of families in some communities that every morning have to fetch fresh water.
"In a big picture sense, (that) is what is lacking with the scheme, really understanding the context of the lives of many First Nations people with disability in regional and remote Australia."
There are about 66,000 Indigenous people with a profound or severe disability in Australia. About 11 per cent, or roughly 7000 people, live in remote or very remote areas.
Head of the National Aboriginal Community Controlled Health Organisation, Patricia Turner, said data showed there were significant underspends in National Disability Insurance Scheme plans for Indigenous people.
"(This) demonstrates that even though our people are becoming NDIS participants, they can't access the services they need," she said.
"This is compounded in remote and very remote areas. Many services are not available, or those that are may not be culturally safe."
Scott McNaughton, NDIA national delivery general manager, conceded there was a need to make the scheme easier to understand and more community-led.
"Some of the infrastructure that has been put in place needs to be reviewed to make it more culturally appropriate," he said.
