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We are a small Plan Management provider. At a recent whole-team meeting, we had a lengthy discussion about whether it is a Plan Manager’s responsibility to only process invoices for reasonable and necessary supports. We couldn’t come to a simple ‘yes’ or ‘no’. So, can Plan Managers decide whether a support is reasonable and necessary?
Plan Managers often find themselves wedged between a rock and a hard place. Unfortunately, the issue you have raised is just another example.
I wrote about this topic in 2022, but the goalposts have moved since the new NDIS Act came into force in late 2024. There are quite a few considerations, so let’s unpack them:
What is reasonable and necessary? How does it impact how a plan is spent?
Reasonable and necessary (R&N) is a set of criteria outlined in Section 34 of the NDIS Act. These criteria determine what supports can be funded in an NDIS Plan. In other words, the amount and types of funding Planners put into a Plan. But, there is a separate set of criteria for participants to use when deciding whether a support can be purchased from their Plan. These are neatly summarised in the Can I Buy It checklist.
How a plan was built, and how it can be spent, have historically been two separate things. But with the implementation of the new Act, R&N now also informs how the NDIA decides what supports can be purchased from the Plan, as there are now additional requirements to spend NDIS funding in accordance with Plans.
Who decides R&N?
Interestingly, the NDIS Act is pretty darn explicit that the only party that can decide whether something is R&N is the NDIA CEO or their delegate (usually Planners). The Act doesn’t say this is an authority that can be delegated outside the NDIA, i.e. to providers of any type.
What’s changed in the new NDIS Act?
The new NDIS Act, which came into force in October 2024, says that NDIS funds must be spent ‘in accordance with the Plan.’ The NDIA’s webinars about the implications of the updated NDIS Act state that ‘as a Plan Manager you must ensure that you manage and monitor a participant’s budget in accordance with their Plan.’ Anecdotally, we also know that ‘in accordance with the Plan’ is being used in Payment Integrity Actions from the NDIA.
In practice, it’s kind of impossible to separate R&N from ‘in accordance with the Plan’. In compliance activities, the NDIA is asking for evidence that there is a match between how they built the Plan (which they determined using the R&N criteria) and how the Plan has been spent - in other words, that the funding is spent ‘in accordance with the Plan’.
But there is often very little information included in a Plan. It’s common for a Planner to put a lump of money into flexible Core with no or few notes. This gives the participant more choice and control and the ability to use funds flexibly. But makes it harder to ensure funding is spent ‘in accordance with the Plan. ’
What does the NDIA say publicly?
The NDIA and inconsistent messaging: they go together like peanut butter and jam, don’t they? Or for a classic Australian version - Kylie Minogue and Jason Donovan. Plan Managers, this inconsistency is especially for you.
The Guide To Plan Management says that “the role of a Plan Manager does not extend to determining whether supports or services which have been purchased are ‘reasonable and necessary.’” And that’s fair, given that only the NDIA CEO can ultimately determine what’s R&N. Ok, cool! That’s clear.
But… in the Pricing Arrangements and Price Limit (PAPL), the bible for compliant NDIS service delivery, the NDIA says that:
- ‘supports must be reasonable and necessary’ (page 34)
- ‘providers should not claim for supports from a participant’s plan… where the support is not reasonable and necessary’ (page 34)
- ‘supports should only be claimed by a provider from a participant’s plan when they are reasonable and necessary’ (page 9)
- ‘providers can only claim for supports that are related to the reasonable and necessary needs of a participant’ (page 30)
All of this wording has been substantially the same for many years.
And every time a Plan Manager (or any provider) submits a Bulk Upload Request file to the Portal for payment, they have to tick a box that says, ‘I acknowledge that these services follow the rules outlined in the PAPL.’
So it’s not up to Plan Managers to decide what is R&N, but they are expected to only process invoices for services that are R&N? How would a Plan Manager know?
There’s a lot of mixed messaging here. What’s the definitive answer?
Well, the official answer is no. As the NDIA says on their website:
‘No, the role of a Plan Manager is not to determine whether the supports or services purchased are ‘reasonable and necessary’.
Your plan will have funds approved for reasonable and necessary supports at the planning stage.
The role of the Plan Manager is to ensure your Plan is implemented as intended. This includes ensuring funds are being spent in accordance with your Plan.’
The NDIA says Plan Managers can’t determine R&N. But my opinion is that, in practice, they are regulating Plan Managers through other parts of the Act and the PAPL to only process R&N supports - like by ensuring all claims are ‘following the Plan.’
This leaves Plan Managers with all of the compliance obligations but none of the tools. Pretty much ‘not your job, but do it anyway.’
That’s extra tricky when the Plan Manager isn’t designing and delivering the supports; they are just processing the invoices on behalf of a third party. We know that the NDIA is freezing or cancelling payments to Plan Managers for supports other providers have delivered that the NDIA considers not R&N. So there’s a commercial and service imperative to working this out.
So basically we can’t win. Great. What exactly are we supposed to do?!
Good question. This is an area where there is no simple path forward that assures compliance - everything will come with business risk. But here are a few things that can at least help:
- Prevention is better than cure - communicate all of the new requirements from the NDIA to the participants you support and, where needed (and with the participant’s consent), to the providers sending you invoices. This might include communicating to participants and providers about the requirements in the PAPL to ensure supports are R&N.
- In really sticky situations, sit down with the participant (and potentially with the provider as well) and work through the Can I Buy It checklist. This is a great NDIA resource that guides participants on what they should and shouldn’t be purchasing from their Plan, and it maps relatively neatly to the components of R&N in the NDIS Act. If there are any ‘no’ answers to the questions on the checklist, it’s a good sign to go back to the drawing board.
- Agree with the participant in advance on a risk appetite you are both comfortable with. Most Plan Managers aren’t going to lose sleep over the NDIA determining a $50 fidget spinner isn’t R&N, but if the NDIA refuses to pay a $20,000 Short Term Accommodation invoice for not being compliant, then that’s a different story.
- Acknowledge the mixed messaging from the NDIA and the confusion out there. You don’t have to be an oracle of all NDIS knowledge, it’s ok to work with a participant and find the answers together as you go.
We’ve also got a stack of workshops that cover practically implementing the provisions in the updated NDIS Act, including New Funds Flexibility Rules, Unpacking the New NDIS Law Changes for Plan Managers, and Mapping Supports to Impairment Notices.
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