Senate Community Affairs Legislation Committee, , 6:42:36 to 6:50:30
Analysis of the plan manager market, including the number of active entities and the financial viability of low-volume managers.
Topics: Government spending, Procurement
Speakers: John Dardo, Catherine Myers, Speaker 36, Ellie Whiteaker, Louise Glanville
Thank you. I appreciate that. I've got a couple of questions about plan managers. And I'm wondering if you someone could talk us through why why that is.
Can we take it? Chair, I might take that question. Is that okay? John Dardo NDIA. The plan manager market is depending on when you count them and how you count them, you know, 3,000 entities registered for plan management, of which about 1,300 were active in the last three months.
Sorry, what was that number?
1300.
So less than half active in the last three months.
In the last three months. If we look at as an example, if we look at their um their profile of how they actually are paid, you know, they're paid a plan management fee of about 104 dollars per participant per month.
Okay.
Um the bottom 922 plan managers are earning less than 50,000 a year each. Um in fact that you know that profile diminishes very, very quickly at the bottom end. You know, some of them are receiving just a few thousand dollars a year each. And so as a plan management entity, they very quickly become not financially viable. So, for example, um there's there's 259 that in the last financial year got less than a thousand dollars in plan management fees.
So, how do they operate?
I'll I'll I'll come to that in a moment.
Sorry.
Uh, there's 240 in the 1000 or 5,000 range, there's a hundred in up to you know five to ten thousand range. There's three hundred and nineteen in the ten to fifty thousand range. Uh frankly, even if you were at the 100,000 dollar range, there's 155 between 50 and 100,000. So you're talking well over a thousand, almost 1100 of them are getting paid less than 100,000 a year for plan management fees. Which means that the only either, you know, it's not a it's not a big um well-resourced, well systematized business, or it's a business that is doing lots of other things. And so it might be that they're doing other things in the scheme. And so they're actually they're not just doing plan management, they're actually doing other services in the scheme. Which you know potentially creates a conflict of interest, whether it's real or a parent because they're managing the plan, but also potentially being the provider of the services to the participants whose plans they're managing. Um I think the other thing to note here that's quite problematic for us is that um uh you know the plan management infrastructure wasn't put in at the beginning of the scheme and has not evolved at speed since the scheme commenced, and so it has not had 10 years of good development to bring it to a point of integrity. And so when we look at how plan managers claim, plan management claims have zero evidence that is visible to us at time of claiming. It is just an extraordinary space to be that plan managers claim and we cannot see the evidence attached to their claims. So we have been running a bunch of integrity work with those plan managers to try and understand whether those plan managers actually hold evidence when they're making the claims. And we've been running sampled audits for those plan managers, and in some of those sampled audits, we're finding you know, more than 50% of the plan managers that we're auditing have no have not got evidence for all their claims they're submitting. And so they're submitting claims uh with where they don't have invoices or where the claims they're submitting are not consistent with NDIS supports or where the money that they're claiming is not actually going to NDIS supports. Sure. And again, in cases that are in progress where we've had significant interventions, criminal interventions. Um we've been identifying money flowing uh to it to destinations that could not possibly be imagined to be related to NDIS supports. So I think one of the things that's important for us here as we go forward is to um you know, as plan manager markets um we'll move to a world where we're actually very clear about where the money is going. We you know, we will be making the deposits to the end destination, not into a plan manager bank account. And we will require their systems to talk to our system so that evidence is collected during claiming. And we will also be making sure that you know the plan manager market um uh is capable of meeting those expectations that you would have of anyone that is facilitating claiming in the tens of billions of dollars. So knowing your client, you know, and having having controls in place about how they manage claim integrity when it gets to them.
Yep.
Um we could Graham Hitts agency. Um Mr. Dada's talking about will be given effects for the plan management uh panel arrangements that have been uh announced and uh uh built off the back of this analysis of the problematic issues associated with plan management in the system.
Thank you.
Um Chair Katherine's Deputy Commissioner at the Quality and Safeguards Commission. Plan managers are required to be registered. The Commission recently um updated its qualification requirements and now applies greater scrutiny to plan managers. Um when we uh introduced that new process, we had a number of plan management applications withdrawn from people who did not meet those uh requirements. Um what we know about the market is that there's a large number of plan managers who service less than 10 um participants and to strengthen our checking of plan managers. We also require identity validation for all persons engaged or employed by plan managers and by the provider. And we also found in the Commission's own motion inquiry into support coordination, it found that plan managers were not consistent. Acting with integrity and in some cases delivered poor quality services and we had a higher rate of complaints around payment issues. So the work that we are doing to improve the assessment of plan managers entering the market has seen a slowdown of the applications coming through.
And this is a good example of the connection between the NDIA and the Commission in terms of working on some of these more complex areas that need a lot of attention.