At the beginning of the year, icare took a significant step in transforming the way workers insurance claims are managed when it introduced its new claims service model. For a scheme that’s been working almost the same way for 30 years, it truly was a huge leap forward to deliver better treatment and care to the people of NSW and to provide a claims management scheme that is financially sustainable.
On review, the first six months presented some challenges, as there always are when launching a new operation. However, when looking at the core principles we set out to work to, the indications are that the fundamentals are sound, although there are still many things to improve upon.
Consistency of service and better communication
There has been an increase in the number of smaller claims lodged which may be as a result of the trend for more workers (or their representative) to lodge claims themselves. Lodgement by parties other than the employer has increased from around 3 per cent to 15 per cent of all lodgements since the introduction of the online portal. Those claims are subject to the liability assessment process, including employer consultation.
More than 60 per cent of the 31,000 new claims received in the first six months have been lodged through the online portal and its 24/7 availability has enabled 13 per cent of claims being lodged outside core business hours.
A change that employers will have noticed is the number of injury-only notifications that are being lodged and acknowledged. The Regulations issued by the State Insurance Regulatory Authority require these to be notified to the insurer and icare has handled more than 7,000 notifications in addition to the claims noted above, of which around 10 per cent eventually become a claim.
With more than 20,000 inbound and outbound calls handled each week, it took some time to get to an acceptable call handling service level. Average call waiting times are now approximately 30 seconds and will continue to improve.
Lodgement is just the beginning of the process. A key component of the operation is how claims are followed up with employers and workers. Over 9,000 outbound calls are made to customers each week, of which around 1,700 are HUG (How You Going?) calls to provide the initial support for employers and workers.
Liability and Claims Management
The principle of improving support to deliver better return to work outcomes is at the heart of how the model works but is also key to the financial sustainability of the scheme. There are many interconnected elements that all have an influence on the success of the model for employers and workers.
Core to the model is being able to direct simple and complex claims quickly to the right level of support and care. For instance, being able to direct the 70 per cent of lodgements where injured workers never take time off following injury through a simple, light touch experience contributes to help drive down year-on-year claims costs and claims handling expenses.
For claims that require time off work, the acceptance of provisional liability of a claim can often lead to misunderstanding about the cost impact to premiums and the scheme as a whole.
Year on year, there has been a significant reduction in the application of full liability decisions at first decision from around 30 per cent to 5 per cent of claims. This has been balanced by a greater application of provisional liability that enables quicker time to treatment and decisions being made that lead to better return to work outcomes. Overall liability acceptance/declinature in the model is within 1 per cent of the same period last year.
Early acceptance of provisional liability where it is appropriate allows the worker to get treatment faster, which in turn can lead to a quicker return to work and reduce the overall cost of the claim.
However, the assignment of provisional liability does not mean the claim has been accepted. All claims have an ongoing full liability assessment that involves the appropriate parties and a liability decision made in line with regulatory requirements.
This has been most apparent in mental health related claims, where the cost is typically twice that of physical injury claims. Getting faster access to treatment has delivered a 40 per cent improvement in return to work outcomes as well as a 32 per cent reduction in the associated cost of weekly benefits.
Cost of claims
Throughout the model, there is a focus on containing claims costs through operational efficiencies, better return to work outcomes and better management of claims related expenses. For instance, $50 million is being saved annually by having direct arrangements with providers instead of multiple, complex and inconsistent contracts.
So far in 2018 the value of net claims paid is around 4 per cent lower than 2017 at this point in time. Other examples in different parts of the model where there have been significant developments that have contributed to the containment of claims costs include:
Following the success of an initial pilot, the Medical Support Panel (MSP) is now a permanent feature of icare’s customer-centric claims model.
Comprising doctors specialising in work injuries, the MSP provides case managers with medical advice and expertise to fast-track decision-making, supporting both the injured worker and their employer.
Independent medical examinations (IMEs) play a valuable role in the scheme, mainly in cases where medical information is incomplete, or when a physical examination is required. The process for treatment approval was lengthy, taking an average of six weeks for an injured worker to have an appointment and the subsequent report supplied to the case manager. This is a significant cost to the scheme when you take into account weekly benefits and consultation expenses. Analysis undertaken by icare has showed that more than 50 per cent of the claims referred to an IME for treatment had no change to the direction or treatment plan for the claim, potentially delaying treatment by up to six weeks.
The MSP continues to reduce average treatment approval timeframes, which have been reduced from six weeks to just five days and has accounted for a reduction of 20 per cent in the overall use of IMEs. More than 2,400 treatment recommendations have been made by the panel since its introduction in 2017.
A new dispute resolution team resolving disagreements about decisions on claims has resulted a 13.6 per cent reduction in legal costs in the first half of this year, compared to the same period in 2017.
These factors have contributed to this year’s premiums being held at the three-year low of 1.4 per cent of wages.
An enhancement to the technology platform and operation is in the final stages of development and testing. Included in the new technology release is an ‘authenticated portal’ that will allow employers and workers to log in securely, view their claims status and undertake a number of activities related to their claim(s) that will help make the process simpler and more transparent. It will also streamline the operational elements of the model allowing more efficient handling and management of claims. This in turn will support better return to work outcomes for workers and a more sustainable scheme.
Taking on board the lessons and customer feedback from the roll-out of the new model, we agreed to support EML with additional claims team and facilities at icare premises in Wollongong, Paramatta and Gosford, to handle new claims for a short period as the new platform is deployed.
This will allow EML to focus on their current operation and allow for training of the EML claims teams on the new system and processes before the operation is re-integrated to EML early in 2019. Our teams will then focus on quality improvements and building capability to support icare Insurance for New South Wales teams as they transition to the new system later in 2019, while continuing to assist EML and other providers during peak periods.
About the author
Elizabeth Uehling is the Interim Group Executive Personal Injury Claims for icare.