Impairment Notices are set to be a big deal

Impairment Notices have the potential to have a huge impact on service delivery, fund flexibility and providers being paid for services.

Impairment notices came into being with the updated NDIS Act. We covered some of the basics in our article series on the legislation (check out: NDIS Act Explained: Impairment Notices). But since then we’ve learned a lot more about the rollout, and impact on providers.

What is an Impairment Notice?

An Impairment Notice is a formal notice from the NDIA stating which of the six Impairment Categories outlined in the NDIA Act the person has met NDIS access for. Each participant will align with at least one Impairment Category. Section 32BA of the NDIS details the six Impairment Categories as:

1. Intellectual - how a person speaks and listens, reads and writes, solves problems, and processes and remembers information.
2. Cognitive - how a person thinks, learns new things, uses judgment to makes decisions, and pays attention.
3. Sensory - how a person sees or hears.
4. Neurological - how a person’s nervous system functions.
5. Physical - the ability to move parts of a person’s body.
6. Psychosocial - the person has reduced capacity to do daily life activities and tasks due to their mental health.

(Note that these are the definitions and language that I've taken from the NDIA's Operational Guideline on meeting disability requirements to access the Scheme. Personally, I find it hard to see how such basic definitions will reflect the huge spectrum of the day-to-day experience of 700,000 people’s disabilities but ours is not to reason why).

Essentially, Impairment Notices are how the NDIA communicates how the person got access to the Scheme. They also help the NDIA regulate how a person spends their Plan, as all supports now must relate to needs ‘arising from an eligible impairment.’

Every participant will have one Impairment Category (called a Required Impairment Category), but it’s also possible for a person to have multiple (these are called Optional Impairment Categories). A person has to meet the same threshold for adding each Optional Impairment Category as they did for their Required Impairment Category. It’s also not really the person’s choice: the NDIA has a document and process in their system for determining Impairment Categories.

New entrants to the Scheme have started getting Impairment Notices in their NDIS Plans. The notices are pretty basic - just a couple of paragraphs about what Impairment Categories the person meets eligibility criteria for, and then some stuff about appealing and varying a Notice. Existing participants will get an Impairment Notice at some point in the future. I can’t see how this will be a quick process given there are currently more than 700,000 participants.

How do Impairment Notices impact reasonable and necessary?

In the updated Section 34 Reasonable and Necessary criteria in the NDIS Act, it states that ‘the support is necessary to address the needs of the participant arising from an impairment.’ Meaning there has to be a crystal clear, demonstrable and evidenced connection between the support delivered and the Impairment Category/Categories that got the person access to the Scheme.

This is a pretty marked difference from the way Reasonable & Necessary was widely interpreted before the updated legislation. Previously, there was a lot more opportunity to prove that a support was connected to the person’s broader diagnosis and NDIS goals. But this change is now a hard boundary.

What will the impact be on providers?

That addition to Section 34 is doing a lot of heavy lifting for the NDIA in billing compliance and budget management. Particularly, if the NDIA concludes that funds are being spent on impairments not listed in the Notice. This is playing out as funding for supports only being put in a Plan if there is a demonstrable link to the Impairment Categories, and could even mean the NDIA refusing to reimburse claims for services they deem as outside the Impairment Category. So, the bar for getting a support into a Plan has been raised.

What should providers do to prepare?

Some things providers can do to prepare include:

• All providers should start mapping how the supports they deliver directly relate to the disabilities a person got access for, and vice versa (i.e. assessing how any new supports being delivered relate directly to the person’s disability).
• Start to think how you might include references to Impairment Notices in Service Agreements. This might include how you’ll ask for evidence of a person’s Impairment Categories, why you want that information, and how you’ll progress if the person doesn’t want to (or can’t) provide it.
• But don’t just put this into Service Agreements and forget about it – the changes to s34 and s46 of the NDIS Act (s46 references ‘spending in accordance with the Plan’) mean providers need to have deeper conversations in planning and quoting stages about what can and can’t be delivered based on the Impairment Category listed.
• Use the NDIA’s Can I Buy It checklist to structure and guide these conversations. That checklist pretty closely maps to the legislative requirements in the Act.
• Embed references to Impairment Notices in evidence you collect about service planning and delivery, in the event of a Payment Integrity Audit (this can include Service Agreements, documented conversations, Support Logs, Schedules of Support, evidence of working towards NDIS goals, case notes, etc).
• Educate everyone in the organisation on the importance of the link between Impairment Notices and services delivered. This isn’t just a Quality Team obligation, or a Finance Team obligation.

Overall, Impairment Notices might seem like a small bureaucratic addition (“oh yeah, that funny little extra paragraph in the letter from the NDIA. What’s that about again?”) but they are actually a major lever for the NDIA to control how plans are spent and set more limits on funds flexibility. Providers need to plan, prepare and align service practices around them. And of course, we have a workshop that covers all this crucial information in deep detail – check out Mapping support to Impairment Notices- An Essential Skill.