Response and actions

Finding 1: SIRA should review definitions where it requires reporting of data in consultation with all stakeholders.

Supported

Finding 2: Regular meetings between Board chairs, CE and CEO of SIRA and icare should be continued on an open and constructive basis to promote understanding between, and positive relations with, the two organisations in meeting their respective responsibilities.

Supported

Finding 3: SIRA continue its review of governance and capabilities within the emerging contemporary approach to regulation.

Supported

Finding 4: Priority should be given to a training program for GPs by icare.

Supported in principle noting SIRA will take action on Finding 4.

SIRA will partner with professional medical colleges to increase awareness of the Health Benefits of Good Work initiative amongst GPs and other health providers.

Finding 5: SIRA should continue its monitoring focus on capital adequacy in liaison with Treasury officials.

Supported

Finding 6: icare should provide SIRA sufficient regular information to assure the regulator that premiums are calculated in compliance with the legislative requirements.

Supported

Finding 7: Internal Audit planning and risk mitigation actions should be provided by icare to SIRA on a regular basis.

Supported

Finding 8: Regular meetings between senior executives should be utilised to agree on and monitor mitigation plans so that formal penalties can be understood as last resort measures in accordance with the spirit of the Premier’s memorandum on inter-agency disputes.

Supported

Finding 9: icare should ensure its agreements with agents and service providers give adequate weighting to the primary goal of RTW.

Supported

Finding 10: icare should review its internal governance of the claims management model to ensure adequacy of intended outcomes. In particular it should consider allocating files to other agents with expertise to reduce the load on EML and provide time for skills and experience to improve.

Supported

Finding 11: icare should address the staff turnover at EML as a matter of priority to ensure case management services are improved.

Supported

Finding 12: The legislative powers available to SIRA should be reviewed and strengthened to enable proper oversight of the NI.

This is a matter for Government and the Parliament.

SIRA notes there will be an opportunity for Government to consider this Finding as part of the statutory review of the State Insurance and Care Governance Act 2015 in 2020.

Finding 13: SIRA should build on its governance work since the Hayne Royal Commission and take up the challenge to operate as a best in class modern regulator.

Supported

1

SIRA will require icare under Division 4 of the Workers Compensation Act 1987 to revise and re-submit to SIRA its FY19/20 business plan by 28 February 2020 to address key issues and findings from the review.  The revised Business Plan is to include appropriate targets for return to work at 4, 13 and 26 weeks and action to deliver performance at the targeted levels as well as comprehensive plans to improve claims management by the NI including:

• Scheme agent capability, resilience, staff turnover and resourcing
• Ongoing review and refinement of claims management including agent arrangements, triaging of claims and provision of dedicated case managers to significantly injured workers
• Claims management for workers with psychological injuries or mental illness
• Systems for ensuring reasonably necessary healthcare services are provided appropriately, at the appropriate time for optimal recovery and return to work, and with high levels of regulatory compliance
• Compliance with the Market Practice and Premiums Guidelines and review and refinement of the NI premium methodology
• Compliance with mandatory data reporting and data quality requirements
• Risk management, internal audit planning and risk mitigation reporting
• Stakeholder engagement

Finding 6

Finding 7

Finding 9

Finding 10

Finding 11

2

icare is required to urgently address data quality and timeliness issues and provide monthly data in accordance with regulatory requirements.

SIRA recommends icare work with an ICT assurance specialist agreed with SIRA to ensure adherence to data provision requirements.

Finding 13

3

icare will undertake a comprehensive review of the icare Workers Insurance Premium Calculation Model, including:

• detailed assessment of all components of the existing premium calculation methodology against the principles of the Market Practice and Premium Guidelines (MPPGs)
• detailed analysis of longitudinal impacts for employers and any consequential or perverse impacts for the broader workers compensation system
• development of alternative options with the objective of improving consistency with MPPGs

icare will provide SIRA with a report on its review of the Workers Insurance Premium Calculation Model as part of the 2020 NI premium filing.

Finding 6

4

icare will review and formally advise SIRA of its premium review arrangements under s8.5 of the Market Practice and Premiums Guidelines issued by SIRA under Division 2 of the Workers Compensation Act 1987. icare will report to SIRA quarterly on premium complaints received and premium reviews and other actions taken as required.

Finding 3

Finding 6

5

Noting icare has advised SIRA that icare and its agents now allocate a dedicated case manager where an injured worker is away from work for 2 weeks.  SIRA recommends icare consider a further enhancement to allocate a dedicated case manager whenever an injured worker is likely to be (or has been) incapacitated for work for a continuous period of more than 7 calendar days.  This would include any injured person meeting the definition of a worker with a significant injury as defined by s42 of the Workplace Injury Management and Workers Compensation 1998 Act (1998 Act) and would strengthen delivery of appropriate injury management as required by s45 of the 1998 Act.

Finding 10

6

icare should review RTW remuneration incentives for scheme agents and relevant icare employees to ensure focus on return to work outcomes at four, 13 and 26 weeks

7

Noting the announcement of the extended Authorised Provider Model will increase choice of claims management service for large employers, it is recommended icare also enhance the NI operating model to provide small business employers with greater choice of claim management service provider.  Options would be developed by icare in consultation with SIRA.

8

SIRA will invite icare to attend SIRA Tripartite Reference Group meetings at least once per quarter to outline progress on actions arising from the Review and on the performance of the NI.  It is recommended the icare CEO attend whenever possible to engage with peak business organisations and unions.

Finding 3

9

SIRA recommends icare commission an independent review into the culture, governance and accountability in the icare team and agents managing the NI.

Finding 13

10

During 2020, SIRA will conduct and publish a quarterly compliance and performance audit of claims management by the NI, under Division 4 of the Workers Compensation Act 1987, including file reviews utilising an enhanced methodology. Audit reports will be provided to the SIRA and icare boards.

The first audit will commence in February 2020 and will be undertaken by EY in accordance with Terms of Reference to be finalised by January 2020.

Finding 6

11

Noting that the NI has experienced a higher rate of increase in utilisation of medical services than other providers, without improvement in return to work outcomes, under Division 4 of the Workers Compensation Act 1987, SIRA will commission an independent audit of the NI’s approval and payments process for medical and related treatment expenses to monitor compliance with regulatory requirements.

This audit will commence in the April quarter of 2020.

Finding 3

Finding 4

Finding 5 given increase in medical costs

12

SIRA will provide advice to Government on prudential supervision options for the NI. SIRA will continue its monitoring focus on capital adequacy.  SIRA will continue to work with NSW Treasury in line with the NSW Treasury/SIRA Memorandum of Understanding.

13

SIRA will engage constructively with the icare board and senior executives on the NI management and improvement plans; SIRA will retain its independent approach on compliance and enforcement matters

14

SIRA will provide advice to Government on legislative policy matters as required

15

SIRA will review definitions and strengthen key performance indicators and compliance benchmarks for workers compensation insurer performance over 2020 and will publish the results at least quarterly. SIRA will consult widely on the development of the indicators and benchmarks.

Finding 1

Finding 3

Finding 13

16

As a priority, SIRA will lead consultation on measurement of return to work outcomes for injured people and is working with Safe Work Australia on its national RTW measurement framework.

Finding 1, 3, 9 and 13

17

SIRA will partner with professional medical colleges to increase awareness of the Health Benefits of Good Work initiative amongst GPs and other health providers

Finding 4

18

SIRA is currently undertaking a review of health care arrangements for the workers compensation and CTP schemes in response to rising health care costs.  Over 2020, this review will result in improved regulatory and fee setting approaches to ensure injured people have access to the right healthcare at the right time for optimal recovery and return to work, and so the schemes provide value-based healthcare.

Finding 3 and 4

Finding 5 given increase in medical costs

Finding 9

Finding 13

19

SIRA will conduct a rolling survey to measure the customer experience of injured people and policy holders across workers compensation and CTP. The first survey will commence by March 2020 and will be published by June 2020.

20

SIRA and icare boards will meet half-yearly. The SIRA Chief Executive and icare CEO will meet monthly with a more detailed quarterly review meeting in line with quarterly audit processes.

Finding 2

21

SIRA and icare will continue, until at least December 2020, the current level of escalated monitoring and communication provided by the SIRA/icare NI Joint Premium and Prudential Oversight Committee (JPPOC) and Joint Claims Assurance Committee (JCAC).

Finding 2

Finding 8