Claims management update 

Elizabeth Uehling, Group Executive, Personal Injury Claims, reviews the 2018 changes to Workers Insurance claims management and shares how provisional liability decisions make a difference.

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The first of January 2019 was the anniversary of the introduction of the new claims service model.

It represents icare NSW taking a significant step in transforming the way workers insurance claims are managed. For a Scheme that’s been working almost the same way for 30 years, it 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 for the future.

We know that the change has not been easy for some of our customers and we’ve not been able to deliver some of what we expected to throughout this year.

We are on a journey and have not always got it right first time, but we’ve been listening to customers and working to address issues as fast as we can to get back on track. In this short series, I’ll look at some of the key things that we’ve done with the aim to improve the claims management experience and address some of the challenges we’ve faced. In forthcoming articles, I’ll also talk about the improvements we are making to technology platforms and operations that will address customer concerns.

What we’ve been doing

Before embarking on the change, we needed to understand what customers really wanted. We undertook an extensive market research exercise and issued over 200,000 surveys to workers, employers and providers with over 22,500 responses received. We also met with over 1,300 employers and their advisors through industry sessions and webinars.

Customers, both employers and workers, had told us there were some key things in the Scheme they wanted changed or improved. These included:

  • better communications
  • better processes and faster processing times
  • improved customer service
  • rehab and recovery that is suitable
  • a more empathetic approach
  • an improved policy renewal process.

The changes icare has made are designed to address these issues. As with any new implementation that involved a fundamental change to how the Scheme operates, we were faced with some challenges that we’ve been working hard to address throughout the year. However, when looking at the core principles we set out to work to, the indications are that the fundamentals are sound.

Prior to introducing the change to the claims model operation, there were two other major changes in the way the Scheme is managed, both aimed at providing a more consistent service for customers.

Firstly, icare is now responsible for the underwriting and management of policy premiums and renewals. Since February 2017 we have been underwriting 72,000 new policies per annum worth $240 million and since June 2017 we have processed $4.7 billion in premiums, more than 550,000 renewals and answered 700,000 queries via our Customer Support Centre and refunded $76 million in Scheme Performance savings.

Secondly, in April 2017 we announced that we would be reducing the number of scheme agents operating within the workers insurance ecosystem with the objective of creating a simple, empathetic and consistent experience for workers and employers, regardless of the complexity of their claim. The claims transition team started with the disengagement of CGU and QBE in August 2017 with almost 19,000 open claims and 250,000 closed claims moving to EML or GIO. 2018 then saw icare collaborating closely with Allianz to successfully move 7,400 open claims and 130,000 closed claims from Allianz to EML or GIO.

Liability Management — speeding up recovery and return to work and keeping costs low

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 55 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.

Provisional liability

When a claim is lodged, liability is accepted, declined, reasonably excused or assigned provisional liability based on the information we have been provided by the customer (employer and worker).

For claims that require time off work, the 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.

In the model, provisional liability is being assigned to claims that may previously have been assigned into the reasonable excuse category. However, this is leading to a reduction in average claims costs. For claims that have been finalised with no further activity, the average claim size has reduced from $2,800 in 2017 to $2,200 in 2018 which is a reduction of 23 per cent in the average claims size for front-end claims [1].

Approving treatment more quickly can also lead to improved return to work rates. 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 the front-end return to work outcomes as well as a 32 per cent reduction in the associated front-end cost of weekly benefits.

This reduces the cost impact to premiums and the Scheme as a whole.

Where we have been provided with enough information when a claim is lodged, liability is intended to be accepted, declined or reasonably excused as soon as possible to provide clarity to our customers.

Importantly, assigning 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.

In the second instalment in this series, I’ll look at how we are managing the cost of claims and operating costs.

 

[1] Using claims data up to September 2018 for 2018 compared to September 2017 data for 2017.

 

About the author

Elizabeth Uehling is the Group Executive Personal Injury Claims for icare.