Claims and injury management

Overview

Insurers need to consider a variety of issues when making a decision about liability for a claim. This guidance outlines relevant information in relation to:

• provisional liability
• reasonable excuse
• the requirement for a claim form
• making a liability decision.

Provisional liability

Provisional liability provides a worker with early access to treatment and financial assistance while the insurer undertakes the necessary investigations to determine liability on the claim.

An insurer may make payments on a provisional basis, without admitting liability for:

• a period of up to 12 weeks of weekly payments
• up to $10,000 for medical expenses.

The duration of the period of provisional weekly payments and the amount of medical treatment expenses approved will have regard to the nature of the worker’s injury and the period of incapacity - see section 267(3) of the Workplace Injury Management and Workers Compensation Act 1998 (1998 Act).

Insurers should actively investigate the claim and keep the employer and worker informed throughout the process. An insurer is not prevented from accepting liability before the end of the provisional liability period (section 278 of the 1998 Act).

Although provisional liability extends the period of time in which the insurer can make a liability determination (section 274(3) of the 1998 Act), a liability decision should be made as soon as the insurer has sufficient information.

Where an insurer has accepted provisional liability and it is likely that weekly payments will continue beyond 12 weeks (from the initial notification of injury), or that medical costs will exceed the provisional amount, a claim decision must be made.

How to start provisional payments

An insurer is to notify the worker in writing as soon as practicable after commencing weekly provisional payments (section 269 of the 1998 Act). The insurer should also inform the employer.

The written notice must explain:

• that the payments have started on a provisional basis
• how long the provisional payments are expected to last
• that an injury management plan will be developed for the worker (if required to do so by Chapter 3 of the 1998 Act)
• that the worker is entitled to make a claim for compensation and details of how that claim can be made.

It should also include:

• the worker’s pre-injury average weekly earnings (PIAWE)
• the amount of weekly payment and how that amount has been calculated (including a copy of the completed PIAWE form where one has been provided)
• who will pay the worker (the employer or the insurer)
• what to do if the worker disagrees with the amount or does not receive payment
• what information the worker needs to provide the insurer for weekly payments to continue
• a claim form and A quick guide to workers compensation: Information for workers brochure.

See Standard of practice S3. Initial liability decisions – general, provisional, reasonable excuse or full liability.

Discontinuing provisional payments

The insurer can discontinue the provisional weekly payments if:

• the worker does not supply, within seven days of receiving a request, a medical certificate certifying as to the worker's incapacity for work and a signed authority to allow the insurer to obtain medical information relevant to the injury (section 270 of the 1998 Act);
• the worker fails to comply with return to work obligations (section 48A of the 1998 Act);
• the worker returns to work before the provisional payments end and faces no ongoing loss of earnings;
• liability for the claim for weekly payments is accepted or disputed.

The insurer can stop provisional medical payments if:

• the worker is not seeking any further medical treatment for the injury, or
• liability for the medical expenses claim is accepted or disputed.

If liability for compensation benefits is disputed while provisional payments are being made, the insurer must give notice of their decision as per section 78 of the 1998 Act.

Reasonable excuse

An insurer has a reasonable excuse for not commencing weekly payments if it can establish any of the reasons outlined in Table 2.1 in Part 2 of the Workers compensation guidelines (the Guidelines).

The decision to ‘reasonably excuse’ a claim must be made within seven days from notification of injury (section 267 of the 1998 Act).

If the worker takes the required action and resolves the reasonable excuse, the insurer should make a liability decision (ie accept provisional liability, accept liability or dispute liability) as soon as possible. Where the insurer has accepted the claim (provisional or full) weekly payments are to commence in a timely manner.

If the worker chooses to make a claim for compensation after the reasonable excuse has been made, the insurer has 21 days from the date the claim is made to determine liability.

Recognised reasonable excuses

The following are the available reasonable excuses for not starting provisional weekly payments (see Table 2.1 in Part 2 of the Guidelines). A reasonable excuse cannot apply to provisional medical payments.

There is insufficient medical information

The insurer can apply a reasonable excuse if it does not have enough medical information to establish there is an injury. The insurer is expected to take reasonable steps to obtain sufficient medical information before applying this excuse.

If a medical certificate/certificate of capacity has not been provided, the insurer is to contact the worker or notifier to try and obtain the certificate.

If the diagnosis or other relevant details on the medical certificate are not clear, the insurer is to contact the nominated treating doctor in order to attempt to resolve the issue.

When applying this excuse, the insurer is to make it clear how the excuse can be resolved (for example, obtain a medical certificate, or an amended certificate with an acceptable diagnosis).

Insurers are to exercise discretion for workers in remote areas if access to medical treatment is not readily available.

The injured person is unlikely to be a worker

The insurer can apply a reasonable excuse if the injured person cannot verify they are a worker or the employer can verify that they are not a worker.

When applying this excuse, the insurer is to advise the person of the factors that are being considered in determining whether they are a worker under NSW workers compensation.

See Insurer guidance GN 2.1 Worker or contractor for more information.

The insurer is unable to contact the worker

The insurer can apply a reasonable excuse if they have been unable to contact the worker and have made at least two attempts by phone (made at least a day apart) and one attempt in writing (may include an attempt by email).

This reasonable excuse should not be applied if the insurer knows that the worker is incapacitated (for example, in hospital) and has no other concerns regarding the notification.

The worker refuses access to information

The insurer can apply a reasonable excuse if the worker will not agree to the release or collection of personal or health information relevant to the injury sufficient to determine provisional liability.

The injury is not work-related

The insurer can apply a reasonable excuse if they have information that the worker did not receive an injury that is work-related.

To apply this reasonable excuse, the insurer must have supporting evidence and not rely on suspicion, innuendo, anecdotes or unsupported information from any source.

The insurer must have evidence or factual information that the condition already existed and has not been aggravated by work or that the injury did not arise from or during employment.

For example, it would not be acceptable to apply this reasonable excuse if the employer reported that they had been informed the worker played rugby on the weekend and injured themselves during the game. It may be acceptable if the employer was able to provide a medical report from the rugby club providing evidence of the injuries sustained by the worker during the game and provide this to the insurer.

There is no requirement for weekly payments

The insurer can apply a reasonable excuse if they are satisfied that there is no requirement for weekly payments (ie because the injury has not resulted in any incapacity or loss of earnings).

This may be ascertainable from the initial notification or may require the insurer to make further enquiries.

More information on this excuse is provided below.

The injury is notified after two months

The insurer can apply a reasonable excuse if the notification of injury is not given to the employer within two months of the date of injury.

This reason cannot be used if, based on the evidence provided at the time, acceptance of liability is likely and provisional payments will be an effective way to manage the injury.

‘There is no requirement for weekly payments’ reasonable excuse

Section 267 of the 1998 Act specifies that the insurer is to commence provisional weekly payments within seven days after initial notification, unless the insurer has a reasonable excuse not to do so.

SIRA added the reasonable excuse - ‘There is no requirement for weekly payments’ – to the then Guidelines for claiming workers compensation (published in August 2016), to enable insurers to meet this legislative requirement.

This reasonable excuse can be applied when it is evident from the initial notification that provisional weekly payments are not required because there has been no loss of income due to the injury.

Applying this reasonable excuse may be confusing for workers who are unlikely to understand the legislative requirements. When applying any reasonable excuse for not commencing provisional weekly payments, insurers are required to notify the worker in writing as per section 268 of the 1998 Act.

In this notification, the insurer is to ensure the worker is advised that although provisional weekly benefits are not required because the injury has not resulted in any incapacity or loss of earnings, the worker can make a claim for weekly benefits in the future should there be a loss of income.

Section 11A of the 1987 Act - 'no compensation for psychological injury caused by reasonable actions of employer'

An insurer cannot use section 11A of the 1987 Act as a reasonable excuse for not commencing weekly payments. Section 11A is a defence to claims for psychological injuries.

Section 11A is only available where the worker has established that:

• they suffered a work-related psychological injury to which their employment was either a substantial contributing factor, or the main contributing factor, and
• the injury results in a psychological or psychiatric disorder, and
• the insurer has evidence that demonstrates that the psychological injury was 'wholly or predominantly caused by reasonable action taken or proposed to be taken by or on behalf of the employer with respect to transfer, demotion, promotion, performance appraisal, discipline, retrenchment or dismissal of workers or provision of employment benefits to workers'.

Refer to Insurer guidance GN 2.3 Psychological injury for more information on section 11A of the 1987 Act.

How to communicate a reasonable excuse for delaying payments

The Guidelines detail when an insurer has a reasonable excuse for not starting provisional weekly payments.

If an insurer has a reasonable excuse for not starting provisional weekly payments, they are to advise the worker (in writing) within seven days of receiving the initial notification of injury (section 268 of the 1998 Act).

The written notice to the worker must set out:

• the excuse(s), and should include copies of all relevant information the insurer has considered in the decision
• that the worker can still make a claim for compensation, which the insurer will determine within 21 days of receipt
• how the worker can make that claim.

The insurer should supply a claim form to the worker and explain:

• how the reasonable excuse can be resolved
• that the worker can talk to the insurer for further information
• that the worker can seek help from their union or the Independent Review Office (IRO) on 13 94 76
• that the worker has a right to seek an expedited assessment by application to the Personal Injury Commission (the Commission).

Requirement for a claim form

The requirements for making a claim and the requirement for a claim form are dealt with in Part 3 of the Guidelines. An insurer must require a worker to complete a claim form when:

• a reasonable excuse notice has been issued, the worker is seeking weekly payments of compensation and the reasonable excuse is still relevant, or
• compensation is likely to be claimed beyond the provisional liability limits and the insurer determines there is insufficient information to determine ongoing liability.

A claim form is not otherwise required and should not prevent the making of a claim decision if the insurer has sufficient information to determine liability.

If the insurer does not have enough information to make a decision and a claim form is required to gather the necessary information, the insurer should request a completed claim form four weeks before the expiration of the provisional period. See Standard of practice S3. Initial liability decisions – general, provisional, reasonable excuse or full liability.

This will allow the worker sufficient time to complete and submit the form, and the insurer sufficient time to make the liability decision.

Making a liability decision

For the majority of claims, liability will be able to be accepted once the insurer is satisfied that the worker is a worker (as defined by the legislation), and received an injury (personal injury or disease injury or aggravation, acceleration, etc of a disease) that satisfies the relevant contributing factor test (eg for a personal injury employment must be a substantial contributing factor to the injury).

Insurers should keep the employer informed throughout the decision-making process, and fully consider all information and evidence provided by the employer.

It is good practice for the insurer to telephone the worker and the employer, informing them of the decision once it has been made.

The insurer is to provide a letter to the worker and employer outlining the liability decision. It is to include the content specified in Standard of practice S3. Initial liability decisions – general, provisional, reasonable excuse or full liability.