NDIA Releases Guide to Plan Management

We have some big news right off the press today, the NDIA has just released their Guide to Plan Management. What’s the big deal you ask? Well, those in the Plan Management business will know that this guide has been “two weeks away” for around the last 3 years. Up until today, all that Plan Managers really had to inform their practice were the few lines contained in the Price Guide and a basic participant factsheet. Not great for an industry worth ~$237 million (not including remote loading).

So, what does this long awaited Guide contain? Here’s our initial analysis of what it means for participants and the sector.

SETTING THE SCENE

Plan Management is a new industry that has been created as a direct result and advent of the Scheme. There are over 1000 active Plan Managers across the country. As more participants elect to use this service, the industry has seen enormous growth. In the latest quarterly report, funding committed to Plan Management clocked in at around $237 million, representing a 29% increase in the market in just 3 months. Which, if you’ve looked around at the Australian economy in the last few months, you’d recognise as fairly unique growth.

To date, a lack of guidance from the Agency has led to divergent understandings of what the service actually is. Looking at the required qualifications, the Commission only requires Plan Managers to be accountants or bookkeepers. It doesn’t place any requirements or emphasis on Plan Managers being skilled or qualified in delivering person-centred support. This has led many providers to see the service as purely transactional. However, another school of thought sees it as the role of Plan Managers to unlock a plan’s potential and empower people to live their best life through the freedom of financial expression. This is leading to some significant differences in the quality and type of support plan managers provide.

REASONABLE AND NECESSARY AND PAYMENT ASSURANCE & INTEGRITY

One of the biggest controversies in Plan Management circles has been whether it is the responsibility of the Plan Manager to determine if a support is reasonable and necessary before making a payment. The Guide makes it quite clear that this is not their responsibility. Thank goodness!

This answer makes complete sense. According to the NDIS Act, the only people able to determine reasonable and necessary supports are the delegates of the CEO. Even LACs need to get plans approved by the Agency. This is also a good reminder that reasonable and necessary pertains only to the allocation and inclusion of funding in a person's plan at the planning stage, not what they spend it on.

Hopefully, this will put an end to the practice of Plan Managers refusing to process payments they see as not meeting the ‘reasonable and necessary’ criteria.

However, there is one catch. The Guide does say the Plan Managers have to ensure that the plan is being “implemented as intended.” This is framed as a conversation about Payment Assurance & Integrity, rather than reasonable and necessary. The Agency even leaves Plan Managers liable to pick up the bill for any funds spent not “in accordance with the plan”, however the Guide does connect this sentence to the inappropriate use of government funds or cases of fraud.

The ambiguity in these instructions makes it seem contradictory to the Guide’s assertion that the Plan Manager's role does not extend to deciding what supports a participant can access. Plan Managers cannot decide what support a participant can access, but they might have to foot the bill if they purchase the wrong one? Righto. Makes total sense.

We really needed the Guide to provide more clarity on how Plan Managers ensure the appropriate expenditure of the plan, particularly when participants are free to claim reimbursements just like Self Managers. That the plan should be spent “as intended” is hardly enough, given plans tend to be brief, system driven documents.

The only real guidance Plan Managers can go on is Booklet 3- Using your NDIS Plan which has seven questions participants need to ask themselves before purchasing a support on page 10. The Guide also refers to a Payment Assurance Program, but this is also very light on information. It doesn't tackle the questions of one-off payments or creative and innovative supports.

So in summary, this is what we know:

Plan Managers do not:~

determine what is reasonable and necessary
decide what supports a person can access

Plan Managers do:

ensure the plan is implemented as intended, within budget and in accordance with the plan
enforce the price guide
support people to understand their plan and the rules around how it can be spent
not participate in fraud or the misuse of funds

ESTABLISHMENT FEE

Controversially, the Guide states that the Plan Management setup fee can only be claimed if there has been an initial meeting 'to establish the financial arrangements between the participant and the Plan Manager.’ Plan Managers also need to keep a record of this meeting. Sensibly, the Guide allows for the meeting to be held face to face, over telephone or other online engagement.

This could substantially affect the revenue stream of some Plan Managers who are accustomed to claiming the establishment fee as part of the administrative sign-up process and NDIS portal set up, without having met with the participant. Plan Managers across the country vary drastically in the services they offer and their approach in this regard.

Hopefully, this initial meeting will enable Plan Managers to explain the services they provide to participants and result in greater plan utilisation. Unfortunately, we know that some Plan Managers are only processing their own invoices and the rest of the budgets remain unspent for the entire year. This small but important clarification should put an end to this practice.

Over 4 pages, the Guide details what should happen in this establishment meeting. It seems like the Agency are expecting a lot for only $232 and there’s not a lot of margin in the following $104 per month.

CHANGING PLAN MANAGERS

The Guide also confirms if a participant changes Plan Managers, then any invoices issued after the end date of the first Plan Manager are the responsibility of the new Plan Manager. Hallelujah! Whilst this might seem like common sense, the welcome clarification will stop participants being ping ponged between providers in the game of NMP (a.k.a. not my problem)! The number of wasted hours and distressing phone calls arguing over who is responsible for an invoice are officially over.

If the participant changes Plan Managers mid-plan, the establishment fee will not be available to the new Plan Manager. This is different to Core supports, where participants have the option of accessing a second establishment fee.

SCOPE OF PLAN MANAGEMENT ROLE

Right at the end of the Guide, in one of the smallest paragraphs in the document, we learn that a Plan Manager is not an LAC, ECEI Partner or a Support Coordinator. Surprise!

The role boundaries it does confirm is that a Plan Manager:

Supports a person manage the funding of the supports in their plan; specifically relates to financial and plan managed supports.
Does not undertake day-day administration management or maintenance of the entire plan.
Is not responsible for connecting people to supports (funded, community or mainstream).
Is not expected to maintain rosters or provide advocacy services.

And it kind of ends there.

In reality, much more exploration is needed to examine the areas where these services do overlap. Some examples and professional case studies would have been particularly helpful here.

Most importantly, this Guide doesn't address what happens when there is no Support Coordinator in place and the LAC is hard to reach. Who connects the participant to providers of supports, guides the service agreement and implements the plan? The Guide states the Plan Manager is not responsible for this, yet many Plan Managers have built their reputation on going above and beyond, filling in the gaps that make life harder for the participant.

ENFORCING PRICE CONTROLS

The Guide hammers home that Plan Managers must enforce the Price Guide no less than eight times! While this is a well established function of plan management, it was interesting to note this level of emphasis and begs the question, is this really what is most in the participant’s interests?

There seems to be a common belief in the sector that non-registered providers tend to price gouge. But what we see when we look at the actual claims made by people accessing Plan Management is that many pay under the Price Guide for their support. That's right, despite the fear mongering, non-registered providers on the high street often provide better value for money. So if people are saving money in one part of the plan, why not allow them choose to pay more for another, similar to self managers? Wouldn’t easing price controls for Plan Managed participants give greater flexibility, choice and dignity?

According to the government’s response to the Tune Review, the Agency is looking to enforce the same safeguards on participants looking to Plan Manage as those who Self Manage. If this is the case, shouldn’t they be given the same rights as well? This would give people and families the ability to make real life decisions, at no extra cost to the Scheme. After all, you can't blow out the cost of the Scheme by paying extra if you're not over your annual budget.

PLAN MANAGEMENT PRICING

There's no discussion of the price for Plan Management in the Guide itself, other than a link to the Price Guide. For me, this certainly calls to mind the Agency's recent Price Review finding that "there is little evidence that the current price limits for Plan Management are inadequate". For each participant, Plan Managers get $1485 a year (not including remote loadings), for delivering what can be a quite intensive support, particularly in the middle of a pandemic.

INSOLVENCY

Another notable absence from the Guide, is what will happen if a Plan Managers becomes insolvent, ceases trading or shuts down their Plan Management service stream.

THE FUTURE OF PLAN MANAGEMENT

This Guide could be expected to accelerate the reduction of Plan Management providers. According to Disability Intermediaries Australia’s Sector Report, 47 per cent of registered Plan Management who responded to their survey did not make a profit last year. And this was before the pandemic.

In response to this Guide, Plan Managers may need to review their service delivery models and some will need to change the way they do business. But more positively, we can hope that participants will become more empowered about what they expect from their Plan Manager. If the provider does not meet these expectations, we can assume people will vote the way they usually do, by taking their business elsewhere.

You can read the new Guide to Plan Management here. Disability Intermediaries Australia have also created a point-by-point analysis of the Guide you can find here.