www.first2care.com.au Level 4, 196 Wharf St, Spring Hill 4000 GPO Box 5088 Brisbane Queensland 4001
Support Management Solutions Pty Ltd ACN: 601 046155 ABN: 24 601 046 155
16 October 2020
Submission to the Joint Standing Committee on the National Disability Insurance Scheme (NDIS):
Support Management Solutions Pty Ltd (SMS) (ABN 24 601 046 155) is a medium-sized plan management organisation delivering independent plan management services to NDIS participants. SMS was established in 2014 and is a registered NDIS provider.
SMS operates under the trading name of First 2 Care: www.first2care.com.au
The Committee has specifically invited submissions from registered plan management providers.
This submission seeks to make comment about systemic issues relating to plan management and concerns about the future of plan management in four key areas:
- Ambiguity around the plan manager’s role in relation to ‘implemented as intended’ and ‘reasonable and necessary’;
- The important role of plan managers in identifying, reporting and resolving fraudulent claims;
- Conflict of interest issues arising from conflation of plan management and support coordination activities; and
- The Approach to Market for a real time claims system.
SMS would be pleased to appear as a witness at any future public hearings for this Inquiry to provide further information in relation to plan management.
Issue 1: Ambiguity around the plan manager’s role in relation to ‘implemented
as intended’ and ‘reasonable and necessary’
Issues with interpretation
Plan managers play an important role in supporting participant decision making particularly in relation to understanding the ‘reasonable and necessary’ supports in a participant’s plan that are funded under the NDIS.
However, the NDIS Guide to Plan Management (September 2020) contains contradictory information regarding the plan manager’s role in administering ‘reasonable and necessary’ and ensuring the plan is ‘implemented as intended’.
The Guide contains the following two statements:
- “the role of a plan manager does not extend to determining whether supports or services which have been purchased are ‘reasonable and necessary’” (p.16); and
- “the plan manager’s role is to ensure that the participant’s plan is being implemented as intended, which includes ensuring that funds are being spent in accordance with the plan and in line with expected NDIS plan spend” (p.16).
The first statement implies that the plan manager should process any invoice presented and makes it clear that managing ‘reasonable and necessary’ is not the plan manager’s responsibility. However, the second statement suggests the plan manager is required to make a judgement decision prior to processing each invoice in order to ensure the plan is being ‘implemented as intended’.
The ambiguity in the NDIS Guide to Plan Management relating to plan managers puts the plan manager in a difficult position when managing funding for supports.
Furthermore, although NDIS guidelines specify how plan managers should operate, the guidelines do not appear to be enforceable in the same way as other NDIS legislative instruments such as rules and standards, creating further confusion for plan managers.
The NDIS Guide to Plan Management also states that “a plan manager may be liable to repay any amounts which have not be spent in accordance with a participant’s plan” (p 16). Plan managers often do not have access to the full details of the NDIS plan. It is difficult for the plan manager to ensure appropriate expenditure of funds without full access to the plan, and even with access to the plan, it is often necessary for the plan manager to make decisions in regard to ‘reasonable and necessary’ which is noted as an Agency responsibility in the NDIS Act 2013.
The plan manager is conflicted between ensuring payment integrity for the Agency and ensuring maximum ‘choice and control’ for the participant.
Inconsistencies in documentation
The plan manager, in determining whether a support can be funded, is guided by NDIA advice that “plan managers are required to follow the price guide and current NDIS guidelines” (email communication – October 2020).
However, there remains confusion around specific supports with gym membership noted as being especially problematic.
The NDIS Price Guide 2020-21 lists support items of Exercise Physiology and Personal Training (under Capacity Building – 12 Improved Health and Wellbeing), yet accessing these supports often requires gym membership which is not listed as a support item due to being classified as an expense that is ordinarily funded from a person’s income.
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Although the Price Guide makes no specific reference to gym membership, the NDIS Operational Guideline for ‘Support budgets in your plan’ explicitly states that the NDIS “does not fund gym memberships” under the Capacity Building – Improved Health and Wellbeing category:
| Improved Health & Wellbeing | CB Health and Wellbeing | Including exercise or diet advice to manage the impact of your disability. The NDIS does not fund gym memberships. |
|---|
In contrast, the NDIS Guide to Self Management, published for participants who choose to self-manage their plan, does not include this statement under the Capacity Building – Improved Health and Wellbeing category:
| Improved Health & Wellbeing | CB Health and Well Being | Including exercise or diet advice to manage the impact of your disability. |
|---|
The inconsistency of NDIS documentation creates issues for plan managers that are required to make decisions on a daily basis in relation to ensuring funds are expended in accordance with NDIS guidelines.
Recommendation: The NDIS Guide to Plan Management should be amended to remove ambiguity around the plan manager’s responsibility in relation to ‘implemented as intended’ and ‘reasonable and necessary’.
Recommendation: The plan manager should not be held financially accountable in the event that a participant elects to ignore the advice of the plan manager and requests that the plan manager claim an item which challenges ‘implemented as intended’ or ‘reasonable and necessary’.
Recommendation: All NDIS documentation should be reviewed to ensure consistency in the way information about funded supports is presented to participants and providers, with items such as gym membership addressed specifically.
Recommendation: The plan manager should be provided with sufficient information, such as the participant’s full NDIS plan, so the plan manager can understand the intent of the plan and better support the participant’s decision-making process in relation to ‘reasonable and necessary’ items as well as meet NDIS expectations of ‘implemented as intended’.
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Issue 2: The important role of plan managers in identifying, reporting and
resolving fraudulent claims
The NDIA has implemented fraud control arrangements and actively pursues a debt recovery program in the case of payments that have been made to persons not entitled to receive the payments.
Instances of fraud may eventuate in several ways:
- The provider engages in ‘double-dipping’;
- Provider-initiated invoicing issues;
- The provider over-services a participant; and
- The provider and participant collude to siphon funds.
Provider double-dipping
Plan managers have the skills to identify cases of fraud arising from provider double- dipping. Plan managers can use processes to identify transactions that may appear to be fraudulent claims. Although many cases are the result of genuine mistakes by providers, there are occasions of fraud which can only be identified by plan managers undertaking the labour-intensive process of reviewing transactions.
Some examples of the type of transactions that may need to be investigated include:
- duplicate invoices issued under different invoice numbers;
- similar items being claimed multiple times; and
- invoices issued with incorrect service dates caused by providers not updating the invoice template each month, typing errors, etc.
Provider-initiated invoicing issues
There are two ways that provider invoicing contributes to fraudulent behaviour:
- The provider submits invoices that are old and clearly relate to an expired plan hoping to claim them against the participant’s current plan; and
- The provider’s accounting system is inadequate and does not reconcile to individual invoices but rather reconciles off the current carry-forward balance. This creates overpayment opportunities in favour of the provider and creates a difficult situation for the plan manager in attempting to acquit the funding claim.
Provider over-servicing
The over-servicing of participants is a type of fraud that occurs but may be difficult to identify. This is due to the fact that heavy overspending with one provider may not necessarily be an indication of fraud, but rather, could indicate that the budget was set up poorly or there has been a significant change of circumstance (at an individual level or for other reasons such as those related to the COVID-19 pandemic).
If plan managers were provided with more information in relation to the participant’s NDIS plan, they would better understand the time period in which the allocated funding was intended to be consumed (e.g. intensive Occupational Therapy sessions
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over a 3-month period to overcome a condition as opposed to funding which is intended to be spread over a 12-month period). It is difficult for the plan manager to know whether the participant is over-spending when plan managers have insufficient information about the intended duration of the funding spend period.
Plan managers are best placed to explore data to identify trends and identify issues of over-servicing (e.g. house/yard maintenance claims that exceed what would be expected to occur over a reasonable period of time).
Although the occurrence of over-servicing may be due to the nature of the participant’s disability, it is possible for plan managers to identify over-servicing issues that may require further investigation.
Provider/participant collusion to siphon plan funds
Instances of fund-siphoning by providers and participants, particularly when a provider and participant collude to conduct this type of fraud, are difficult to identify and even more difficult to prove. Payments to unregistered providers and payments to family members (under the guise of support providers) present further challenges for plan managers.
It has been suggested that the Real Time Claims solution being progressed through an Approach to Market (refer Issue 4) would reduce the potential for fraudulent activities by improving payment correctness and strengthen controls. However, such a system will require the NDIA to manage a high volume of payment requests (claims) with efforts to detect fraud hampered by the diversity of claims and a reduced familiarity with the expenditure pattern of individual participants.
Plan managers have a personal relationship with each participant and therefore a good understanding of each participant’s needs such that it is feasible to make contact with the participant to confirm the ‘reasonable and necessary’ nature of claims and resolve queried claims in an efficient manner.
If the NDIA undertakes such investigations, the participant may feel intimidated and refrain from sharing information about claims that are legitimate but personal such as grooming items or continence products.
Recommendation: There is a need for the NDIA to publicly recognise the important role of plan managers in providing independent professional advice to NDIS participants and providers, and in identifying, reporting and resolving instances of fraud.
Recommendation: The NDIA should consider increasing the level of funding allocated for plan management to enable plan managers to continue the valuable yet time- consuming work necessary for fraud detection.
Recommendation: Self-managed participants should be required to substantiate their expenditure in the same way as plan-managed participants.
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Recommendation: The NDIA should consider introducing mandatory service agreements for plan management that require participants to acknowledge their own responsibilities in relation to avoiding fraudulent activities and the responsibilities of the plan manager in reporting fraudulent activities.
Issue 3: Conflict of interest issues arising from the conflation of plan
management and support coordination activities
The purpose of plan managers and support coordinators is clearly articulated in the NDIS Guide to Plan Management (September 2020). The role of a plan manager is to “support a participant by managing the funding of supports in their NDIS plan” (p.18), whereas support coordinators provide “broader (non-financial support) to a participant to assist with implementation of their plan” (p.17).
Disability Intermediaries Australia, Australia’s peak body for non-government disability intermediary service organisations and practitioners, suggests that support coordination and plan management activities are able to be delivered by the same provider, however financial intermediary services should not be delivered in conjunction with direct service provision¹.
The potential for conflict of interest and inter-dependence within the industry has also been noted in the 2017 Productivity Commission Study Report: NDIS Costs where it is suggested that “plan management services should be separate from service provision” (p.378).
Despite conflict of interest issues, many registered NDIS providers are offering both plan management and support coordination services to NDIS participants. There are also instances where providers offer three services: plan management, support coordinator and support service provider.
The current practice undertaken by conflicted organisations is to implement a conflict of interest policy or establish a separate entity, however the plan management entity remains a related organisation such that the conflict of interest is obscured rather than adequately managed.
There have been occasions where participants are coerced into leaving a plan manager in order to join another plan manager that is associated with the support coordinator’s organisation. The conflict of interest issue is not discussed with the participant, rather the dual activities are promoted as a benefit. There are also occasions where organisations offering both services charge participants against the support coordination budget for items that are the responsibility of the plan manager.
NDIS participants are vulnerable in a game where businesses are manipulating participants for financial benefit.
¹ Disability Intermediaries Australia Limited (September 2020) – NDIA Support Coordination Discussion Paper Submission
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The NDIA recommends that participants engage with independent plan managers but does not enforce it. The NDIS Guide to Plan Management states that plan managers are required to have “policies and processes in place to actively manage any real or perceived conflicts of interest” (p 5), which acknowledges there is a problem with conflicting interests.
Recommendation: The important dual activities of plan management and support coordination should remain as separately funded line items in the plans of NDIS participants.
Recommendation: The NDIA should consider reviewing registration requirements so that participants who choose to engage a plan manager are confident that their NDIS budget is being managed by an independent plan manager with specialised financial skills and experience, without any conflicts of interest arising from plan management being delivered in conjunction with another support service provided by that organisation or an associated organisation.
Recommendation: The NDIA should communicate to participants the potential for conflict of interest and develop guidelines for how participants should respond if they are coerced into using a plan manager associated with a support service organisation.
Issue 4: Approach to Market for a real time claims system
On 8 May 2020, Services Australia published an Approach to Market (ATM) on the AusTender website for NDIA Payments Program - Real Time Claims (SPC0000700). The aim of the ATM was to explore the appetite for a streamlined payments platform that would enable Providers and Participants to automatically lodge claims (payment requests) in real time at the Point of Support (POS).
The Real Time Claims concept fails to adequately acknowledge the important role played by plan managers in:
- fulfilling the financial intermediary role by providing assistance to participants with understanding budgets and expenditure;
- resolving ‘reasonable and necessary’ claims through a personal approach to participants;
- identifying, addressing and reporting fraudulent claims; and
- monitoring participant expenditure and discussing expenditure strategies with participants.
Anticipated changes to legislation to progress the payments platform may remove the mandate that payment be made directly to plan managers (and to participants or their nominees) and may in fact herald the end of many plan management businesses, some of which are sole traders.
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Participants who choose to engage plan managers are exercising ‘choice and control’ over how their funds are managed. ‘Choice and control’ is a cornerstone of the NDIS Practice Standards relating to the rights of participants.
Plan managers play an important role in liaising with participants regarding over- expenditure and under-expenditure of NDIS funds. This is a significant responsibility that requires financial acumen and an understanding of participant needs. The arrangement is not dissimilar to the role of accountants and bookkeepers for the Australian Taxation Office.
The one-on-one relationship between the plan manager and the participant is critical in enabling this process to occur.
Recommendation: There is an urgent need for the NDIA to confirm whether plan management will continue as a funded support if the ATM proceeds as intended, and to provide a greater level of detail as to how plan managers will be involved in the Real Time Claims process.
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