Statement on Four Corners and other reports

Recent media reports last night and today have raised several issues about icare’s performance and the management of the NSW workers compensation schemes.

These are historical issues, many of which have been previously addressed. Some reports are misleading and inaccurate.

Our primary concern remains our customers – injured people and employers. Over the past five years since we began we have worked tirelessly to transform a broken system, from one that treated injured workers as numbers and ignored business, to one that puts them at the heart of decision making.

It is difficult to hear stories of injured workers who have not been treated in the manner they deserve and respect and we actively review their grievances and concerns. We remain committed to providing care and support for every single injured worker and to the sustainable return to work of injured workers more broadly.

icare was created in 2015 to overcome many of the same issues raised in the recent report by the Victorian Ombudsman, and since that time we have overcome them. We stripped incentives paid to scheme agents to return injured people back to work prematurely, we controlled doctor shopping and we took control of the data and the way claims are managed. NSW is fundamentally different.

We acknowledge that during the transformation there were times when we perhaps tried to run at a time we were still learning to walk – icare was not immune to the growing pains of rapid transformation.

These are not new matters and were noted last year in the Dore report and in our many articles that we publish about our performance and areas that are impacting our financial position, like medical costs or presumptive legislation or new litigation outcomes.

So we’d like to again assure our customers, there is no risk of insolvency in the workers compensation schemes. icare has all the resources it needs to provide care and support to workers both now and into the future.

The solvency position of the scheme was highest in 2015, just before icare started, when simply too much money was being collected. This led to reforms which gave more benefits to injured workers and reduced premiums. Both were always going to impact scheme funding. The most significant impact to the scheme, however, was a projection made in 2012 well before icare existed which overestimated the number of injured workers who would leave the scheme in 2017. This is well documented in annual reports, audit office reports, actuarial valuations and statements dating back to that time.

Simply, the schemes are fully funded and not driven by profit. This is why we have been able to keep average premiums at 1.4 per cent of wages since we started and why they remain on hold when our customers need it most. Read more about premium pricing

As reported earlier this year, our new IT system allowed us to identify historical problems with some initial payments to injured workers. We will ensure all injured workers get their correct compensation. This issue predates icare and we now estimate the number of injured workers impacted is 5,000 to 10,000, not the up to 52,000 workers as initially predicted. These legacy issues go back nearly a decade, since before icare began. However, we will ensure all injured workers get their correct compensation and icare will not seek repayment of any amounts that were overpaid. See our most recent update on our remediation

We have been providing updates on our contract and procurement remediation program. The legacy Perceptive contract was subject to reviews in 2018 by ICAC who deemed it did not warrant further investigation.

While we are unable to get into the specifics of a claim, the personal impacts surrounding the KPMG file review are concerning. However, the findings and recommendations remained unchanged between the draft and final reports. The KPMG draft report was amended to ensure the final report simply included substantiated facts, not innuendo. The scheme agent involved has since taken corrective action to improve training and oversight.

icare is governed by an independent Board reporting to the NSW Treasurer. In addition to the oversight of State Insurance Regulatory Authority, we are also subject to annual review process of NSW Treasury, the NSW Parliament and other regulatory bodies.

We welcome ongoing debate about our performance. Our return-to-work rates are improving but we must get better and we are working closely with our partners to do this. Our new claims model had a rocky beginning, but it is now delivering the way it was designed to, as evidenced by our customers’ feedback.

We never lose sight of our promise to protect, insure and care for injured workers and business. We are here for the long haul and will continue to strive to be better and fulfil that promise.