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Treasury Managed Fund Review Report

In August 2022, SIRA commenced a compliance audit and performance review of the Treasury Managed Fund government employers’ workers compensation claims (the TMF).

In conducting this review SIRA is exercising its functions as outlined in section 22 of the Workplace Injury Management & Workers Compensation Act 1998 (1998 Act).

The review began with 2 clear objectives:

  1. To assess whether workers compensation activities within the TMF agencies were being conducted in accordance with the Workers Compensation legislation and best practice expectations.
  2. To evaluate the interplay between TMF agencies, claims managers and NSW Self Insurance Corporation (SiCorp)/Insurance and Care NSW (icare) in the administration of workers compensation claims.

This TMF review delivers an insight into the current situation and provides the foundation for improvement and change, identifying key issues and suggested courses of action to resolve them.

The full report is available to view or download via the link below.

Read the Treasury Managed Fund Review Report

Summary

The TMF review is the largest of its kind undertaken by SIRA and looked at 951 claim files, with psychological injury claims comprising 54 per cent of that sample.

In the course of the review SIRA interviewed representatives of stakeholders including unions, government employers, claims service providers (CSPs) and icare. The review also considered the 2022 SIRA commissioned Social Research Centre customer experience survey of over 300 people with lived experience of a workplace injury and reviewed all available claims data.

The TMF represented approximately eight per cent of workers covered by workers compensation insurance in NSW, and was responsible for 20 per cent of claims in the 2021/22 financial year.

The review confirmed that in the same period, active psychological injury claims in the TMF represent 48 per cent of all active psychological injury claims in the system.

Eight out of ten psychological injury claims are from preventable workplace behaviours like work stress, bullying and harassment, and other mental stress factors.

The review identified a significant lack of compliance with legislative requirements and conformance to SIRA’s Standards of practice in what are the basic obligations at the start of the claim, and in the provision of injury management planning, an essential in supporting injured workers in their return to work (RTW).

SIRA has identified five key areas of concern:

  1. structural complexity,
  2. financial performance,
  3. government employer compliance,
  4. return to work challenges, and
  5. claims management practice.

Proposed courses of action

SIRA has addressed each identified area of concern with a range of suggested courses of action that are targeted to lift the performance of all government employers and also ensure that claims service providers comply with the workers compensation legislation to meet system objectives.

The proposed actions below take an holistic approach and are designed to deliver improved customer experiences and outcomes.

1. Structural complexity

The structural complexity of the TMF results in lack of clarity and functional ownership in relation to obligations under workers compensation legislation and greater accountability is required to enable more effective regulation by SIRA.

Suggested courses of action - structural complexity
  • NSW Treasury review, and revise as required, its engagement and communication with relevant stakeholders to improve clarity of roles and responsibilities within the TMF.
  • SICorp review, and revise as required, its claims service provider performance and compliance program to ensure workers compensation system objectives are met.
  • SICorp review its feedback and reporting to government employers, NSW Treasury and SIRA to provide improved transparency in respect of claims service provider performance against key claims management indicators.
  • NSW Treasury review the process for engagement with government employers, including timelines for information sharing to assist agencies’ understanding of funding and contribution calculations and impacts on operational budgets.

2. Financial performance

Rising costs in the TMF are driven by several factors including increasing claim numbers, high proportions of psychological injury claims and concurrent scheme entitlements.

Suggested courses of action - financial performance
  • NSW Treasury review the TMF workers compensation contributions, levies and funding arrangements to determine that performance and outcomes are appropriately incentivised and reflective of risk, and make any required adjustments.
  • Government employers that have schemes offering concurrent entitlements examine the interaction of those schemes, the impact on injured workers and system objectives, and work with other relevant government employers to minimise impacts on return to work.
  • Stronger Communities, Health and Education review their workplace strategies to identify opportunities to reduce incidence of psychological injury, particularly in relation to work pressure, harassment, bullying and other mental stress factors.

3. Government employer compliance

Government employers are not meeting legislative obligations that directly impact the likelihood of positive outcomes for injured workers

Suggested courses of action - government employer compliance
  • Government employers review and update their systems, policies and procedures where required to improve compliance with their employer obligations, with a particular focus on:
    • consistent and timely injury notification
    • compliant return to work programs
    • enhancing annual internal audit and risk management policy attestation processes to include workers compensation legislative breaches.

4. Return to work challenges

Challenges in finding suitable work for injured workers are impacting return to work rates in the TMF and there are significant opportunities for improvement through a whole of government approach.

Suggested courses of action - return to work challenges
  • Government employers within their respective agencies explore and address causal factors, of poor return to work with a focus on identifying opportunities for improvement of return to work for psychological injury claims, particularly injuries relating to work pressure, harassment, bullying or other mental stress factors.
  • Chief People Officers within government employers regularly review injured workers who are either under-utilised or not working for potential inclusions in the work participation program referenced below.
  • NSW Treasury continue to facilitate The Whole of Government Recovery through Work Strategy to  utilise mobility and redeployment across government employers to ensure temporary and permanent opportunities for suitable work are identified within and across the public sector (including consideration of smaller agencies).
  • NSW Treasury to work with relevant NSW Government stakeholders to review, revise or develop as required, performance indicators targets and incentives for government employers to improve return to work outcomes.

5. Claims management practices

Uplifts in claims management practice and systems are required to ensure TMF claims are managed fairly, effectively and efficiently.

Suggested courses of action - claims management practices
  • SICorp review and enhance claims management strategies where possible to address opportunities to
    improve customer experience and outcomes identified from the claims file review, with a particular focus on:
    • tailored injury management planning for workers, driving early recovery and return to work
    • maintaining appropriate, supportive contact with workers and stakeholders throughout the life of the claim
    • assessing risks for delayed recovery with appropriate actions matched and implemented
    • the appropriate use of legal and factual investigations in the early stages of psychological injury claims
    • the appropriate application of reasonable excuse.
  • Chief People Officers within government employers regularly review injured workers who are either under-utilised or not working for potential inclusions in the work participation program referenced below.
  • SICorp continues to develop and regularly communicate with relevant stakeholders a workers compensation claims management data and digital roadmap to leverage technological advances and drive efficiencies and improved outcomes.
  • SICorp, NSW Treasury and government employers carefully consider the findings, conclusions and suggestions in this report and engage with SIRA as required in driving the opportunities for improvement identified through the review.

For more detail please see the full TMF review report.

Updated Terms of Reference for the review were published on SIRA’s website 6 October 2022, and outlined the objectives, scope and outcomes for the review.

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