I'm trying to understand the times here. If the first verb is in the past (Odpověděl) then the other verb is understood to be in the past even if it's in present tense (nechápe)?
He said "Já to nechápu!" in present. Therefore "..., že to nechápe." in present. It is as simple as that.
The present means it is at the same time to which the first clause "Odpověděl" refers to.
Thanks for the answer, Vladimir. It makes sense. Reported speech works differently in different languages, so I wasn't sure.