icare actions required by SIRA
1. Business Plan resubmission
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
(Expected financial savings should be reported on a net basis – requirement from SIRA CE letter dated 16 January 2020)
Status: No further action for the FY 19/20
SIRA comment: SIRA remains concerned that icare Business Plan performance targets for Return to Work rates are too low.
Due to the approaching 2019/20 financial year end and impact of COVID-19, no further action is required, however SIRA’s expectation is that the 2020/21 Business Plan will be compliant with legislation and guidelines.
Business Plans are submitted pursuant to Section 202B of the 1987 Act. Licensed insurers are required to prepare and deliver to SIRA a business plan for its workers compensation business that is in accordance with the legislation.
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.
SIRA comment: SIRA has requested icare to provide a comprehensive plan to address data quality concerns
3. Review of icare Workers Insurance Premium Calculation Model
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.
SIRA comment: SIRA and icare are continuing Joint Premium and Prudential Oversight Committee meetings to monitor further premium calculation reforms.
4. icare’s premium review arrangements
icare will review and formally advise SIRA of its premium review arrangements under Section 8.5 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.
icare actions recommended by SIRA
5. Dedicated case manager
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.
SIRA comment: icare has assessed and provided the potential customer, operational and financial impacts of this recommendation to SIRA, to assist in determining the overall benefit to the Scheme and its stakeholders. icare will advise of its intended course of action in the near future.
6. Agent remuneration incentives for 4,13,26 weeks
icare should review RTW remuneration incentives for scheme agents and relevant icare employees to ensure focus on return to work outcomes at 4, 13 and 26 weeks.
7. Authorised Provider Model
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.
SIRA comment: icare has commenced RFP process to consider an enhanced operating model to cater for small business employers and will continue to progress in future months due to current COVID-19 response.
8. SIRA Tripartite Reference Group
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.
9. Independent Review of culture, governance and accountability
SIRA recommends icare commission an independent review into the culture, governance and accountability in the icare team and agents managing the NI.
SIRA comment: icare advised it will be undertaking an independent review. icare is yet to update SIRA on timing.
SIRA regulatory actions related to the NI
10. Quarterly Compliance and Performance Audit
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 has commenced in February 2020 and is being undertaken by EY in accordance with Terms of Reference to be finalised by January 2020.
SIRA comment: This action is impacted by COVID-19 pandemic.
Report of first quarterly audit is expected to be available soon.
The timing of the next audit is under review by SIRA in the context of COVID-19 as auditors may require on-site access to documentation.
11. Independent Audit of NI’s medical services
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.
SIRA comment: SIRA has engaged a provider to undertake a review of the reasons for rising health care costs. This will inform the audit of medical payments processes.
12. SIRA advice to Government on prudential supervision
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 and icare board engagement
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
SIRA Regulator commitments
15. SIRA to review performance indicators and compliance benchmarks
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.
SIRA comment: Insurer Supervision have developed a range of measures and metrics to inform monitoring and supervision, as well as refinement on existing. Implementation proposed for Q3 2020.
16. RTW measurement framework
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.
SIRA comment: Submissions closed on the ‘Measuring RTW’ consultation on 2 March 2020. Review of submissions underway and stakeholder meetings are being conducted. SIRA will propose enhanced RTW metrics later in 2020.
SIRA is continuing to work jointly with icare on RTW measures and performance.
SIRA has established a dedicated RTW Team to work with employer and worker representatives and providers to drive system wide action to improve return to work.
17. Medical partnerships
SIRA will partner with professional medical colleges to increase awareness of the Health Benefits of Good Work initiative amongst GPs and other health providers.
SIRA comment: SIRA has commenced its engagement with professional medical colleges to plan for broader GP and health provider education activities, though the immediate focus is adaptation to the impacts of COVID-19 pandemic.
18. Reviewing health costs
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.
SIRA comment: SIRA is developing improved reporting on health care costs and outcomes to better understand drivers and trends. It will also lead to a SIRA vision for health care outcomes in our personal injury schemes. Researching of options for fee reform has commenced. Both of these will be subject to consultation. A final report is proposed to be published in the second half of 2020.
SIRA is working with insurers to tighten controls around treatment payments and approvals.
19. Customer survey
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.
SIRA comment: This action is impacted by COVID-19 pandemic.
Program to restart in June 2020.
Agreed joint SIRA/icare actions
20. Half-yearly board meetings
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.
21. Monitoring (JPPOC and JCAC)
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).