The agency that runs the National Disability Insurance Scheme rejected more than 4000 claims from NDIS middlemen in just nine months because they requested funding for services that were never actually delivered.
It is one of several new data points that show the extent of the government’s concern about low-quality and non-compliant plan management services in the $50 billion scheme, as it seeks to push through legislation that will allow for a compliance crackdown.
Almost two-thirds of the National Disability Insurance Scheme’s 775,000 participants use their government-funded budgets to enlist plan managers that help with the administrative burden of the scheme – managing invoices, tracking spending and spending their budgets correctly.
Labor wants to pass new laws that will allow the government to intervene in the $8 billion market for these services, by requiring participants to choose from an approved list rather than having free choice.
When operating properly, plan managers should guarantee an extra layer of oversight to boost integrity in the scheme.
But the agency is concerned that many who are dealing with smaller numbers of clients aren’t running viable businesses.
Instead, it believes these smaller businesses are leveraging their networks to gain more income downstream, by then steering participants towards NDIS services that are delivered by their own groups or associates.
Agency data shows that in the nine months between last July and this March, the NDIA has rejected more than 8000 claims made by people’s plan managers – worth $19 million.
In more than half of those cases (54 per cent), it was because no services were actually delivered. A further 32 per cent were rejected because the claims weren’t in line with the plan, and 10 per cent were knocked back as duplicates or incorrect claims.
The agency put 1400 plan managers under manual claim reviews – meaning there would be greater oversight of their compliance given concerns about fund misuse and fraud – and all have since stopped operating.
The government’s greatest concern centres on plan managers who service fewer than 100 participants; almost 90 per cent of the 1519 business operating in this space have been flagged with at least one risk indicator.
The agency estimates that six in 10 of them are paying themselves down the track in the process, as NDIS providers.
This can turn participants’ NDIS plans into a second revenue stream because the plan manager becomes akin to a sales channel that directs funding back to themselves.
When a plan manager is also a provider, they can police themselves without external checks or balances to make sure invoices are legitimate. Nor do participants get independent advice about how their plans are being used.
NDIS Minister Jenny McAllister said the government wanted to ensure the plan-management market was delivering good outcomes for participants.
“Right now, too many plan managers have conflicts of interest, and it’s participants who lose out,” she said.
The government’s NDIS bill, which is now before parliament, aims to concentrate the plan-management market by commissioning a panel of operators that participants can then choose from.
The government will preference larger operators who work at scale because it believes they are running more sustainable businesses.
“Commissioning plan managers means we can shape this market properly. We can set the standards, achieve economies of scale and build a system that delivers better outcomes for participants, not profit for middlemen,” McAllister said.
The new rules for plan management are bundled with a bigger legal package that will also give the government sweeping powers to cut people’s budgets for social activities and therapy hours, as well as tighten the scheme’s eligibility criteria.
These laws were sent to an eight-week inquiry under negotiations with the Greens, and will be debated in parliament after the committee delivers its report on August 14.
While the Coalition intends to pass the NDIS bill, the Greens have mounted a campaign against it, echoing concerns about a rushed process from the disability community and the Australian Human Rights Commission.
The crossbench party supports tackling fraud and integrity in the NDIS, but argues that the government is using an anti-fraud crackdown to mask major budget cuts that will remove people from the scheme and reduce people’s support packages.
“Fraud in the NDIS is a serious issue, but the government has been too focused on targeting participants instead of the providers who are exploiting the scheme for profit,” Greens senator Jordon Steele-John has said.
“We need a fraud response that is evidence-based, properly resourced and focused on those committing the fraud, not one that creates fear and unnecessary barriers for disabled people accessing the supports they need.”
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Natassia Chrysanthos is Federal Political Correspondent. She has previously reported on immigration, health, social issues and the NDIS from Parliament House in Canberra.Connect via X or email.From our partners
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