Sunday, August 9, 2020

Australia’s $60bn workers’ comp gravy train needs urgent review

Australia's $60bn workers' comp gravy train needs urgent review

These were some of the revelations of a joint investigation by The Age, The Sydney Morning Herald and ABC TV’s Four Corners into the nation’s workers’ compensation system. It uncovered mismanagement in the NSW government-run icare and “unethical” conduct in Victoria’s scheme, which together cover nearly half of the nation’s workforce.

One of the people treated appallingly was Chris Iliopoulos, who had a back injury at work but despite excruciating pain she had to battle for the insurer, EML, to approve her treatment. “I’m not asking for a diamond ring or a new car. I’m asking for treatment,” she said.

This should be a call to action for a comprehensive inquiry into the schemes to try and clean them up.

Since the stories appeared on Monday there have been dozens of emails from injured workers and employers highlighting myriad problems with the system.

Psychiatrist Russell Hinton has spent 10 years treating patients on workers’ compensation and deems the system broken. “The system isn’t designed to make them better,” he said.

Hinton has been in situations where a patient is depressed and suicidal and needs admission into hospital but he has to argue with the claims manager, who isn’t medically qualified, why they need to be admitted. “There’s sometimes a 21-day waiting period where the insurer can assess the claim. Meanwhile, you’re having to deal with this person who’s acutely unwell and suicidal,” he said.

There is also a growing problem with independent medical examiners (IMEs) who are paid a lot of money by insurers – far more than treating doctors – to write reports that help knock back claims. They can earn up to $2500 for a 30-minute consultation and the ones who insurers like the most are flown interstate to assess workers’ comp claims.

“There’s been times in the last 10 years that I’m actually ashamed to be in the same profession as them, or be part of the workers’ compensation scheme. Those people to me are clearly breaching ethical standards and that should not be happening to patients.”

There have also been growing calls for heads to roll at the country’s biggest workers’ compensation scheme, icare.

NSW Greens MP and former barrister for workers’ compensation David Shoebridge believes the icare board should be sacked immediately. “The mismanagement and failures of the NSW compensation scheme highlighted in last night’s Four Corners episode must not be swept under the carpet,” he said.

“These failings have happened under the watch of the NSW Treasurer and the current icare board.”

NSW Labor also believes icare’s leadership team should be sacked, and retired actuary Peter McCarthy, who has worked in the workers’ compensation system for 35 years including working for regulators, believes a changing of the guard is the only way forward.

The joint investigation revealed that Carmel Donnelly, the chief executive of SIRA which regulates icare, has “grave concerns” about its financial position and that thousands of workers have been underpaid millions of dollars.

And NSW Treasury and the Treasurer Dominic Perrottet have been warned about the financial issues since mid 2018, yet nothing has been done.


It is now at a point where there are concerns over icare’s solvency, according to sensitive Treasury documents, and the regulator has referred some matters to the anti-corruption watchdog ICAC.

Against this backdrop, icare’s executives are among the highest paid in the NSW government with the top seven executives on an average salary of $666,000.

As the financial situation deteriorated and the regulator launched a review that attracted some scathing submissions from employers, brokers, workers and unions, the executives were collecting bonuses.

In Victoria, Ombudsman Deborah Glass launched two separate investigations into the Victorian workers’ compensation system, WorkSafe, and found “immoral and unethical” behaviour.

She also found that the regulator wasn’t doing its job. “We discovered not only too many examples of [insurance] agents making unreasonable decisions but that WorkSafe itself, as the regulator, was all too often either unwilling or unable to act… It raised the troubling prospect that they were too beholden to the agents to want to take them on,” she said.

Glass made radical recommendations to fix the system and the government has initiated an independent review. There have also been changes at the top of WorkSafe.

“The government has an important responsibility to look at the system, which they have committed to doing … I have about another four years on my term. I don’t want to have to put out a third WorkSafe report, but if I have to, I will.”

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