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Berkshire Hathaway Specialty Insurance

Ombudsman slams 'unjust' workers' comp claims handling

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The Victorian Government will review its workers’ compensation claims management model after an ombudsman report criticising handling of complex cases by state-owned WorkSafe and its agents.

Ombudsman Deborah Glass says the scheme is failing to deliver "just outcomes" to too many people, there has been insufficient improvement in complex claims handling since an adverse 2016 report, and some poor practices have simply been driven underground.

“Many of the decisions and actions we saw were not only unjust, unreasonable and wrong. Some were downright immoral and unethical,” she says.

“The financial viability of the scheme is imperative, but the balance between financial sustainability and fairness for injured workers has tilted too far away from the latter.”

WorkSafe administers the scheme, with claims management outsourced to Allianz, CGU, EML, Gallagher Bassett and Xchanging under contracts ending on June 30 2021.

Agents have previously defended their performance and have been critical of parts of the draft version of today’s report, with their comments included in the final document. Comments also highlight the difficult area of complex claims.

Gallagher Bassett notes that using a significant number of disputed decisions or those arising from complaints skews the conclusions, and failures in single cases have been extrapolated where there’s no evidence of scheme-wide systemic failure.

Allianz says the Ombudsman investigation reviewed 102 complex claims made since the 2016 review, of which 13 were managed by the company. Over the same period, Allianz managed 8442 claims and facilitated the return to work of 4951 Victorian workers and saw a rise in positive customer sentiment.

“Since the 2016 report, Allianz has worked with WorkSafe to implement a number of improvements across our service program, people practices and internal processes for both complex and non-complex claims,” Senior Manager Regulatory and Corporate Affairs Sunila Prasad told today.

A CGU spokeswoman says the insurer is always looking for ways to improve the way it manages claims and is ensuring its employees have the right skillsets and receive ongoing training.

In its written response to the draft report it notes the Ombudsman report criticises actions taken to break a reliance on compensation and to assist injured workers.

“In some cases those actions are highlighted in the report as provocative, unreasonable or inappropriate,” it said. “However, the purpose of these actions is genuinely aimed to disrupt the compensation cycle and activate return to work opportunities.”

The ombudsman final report makes 13 recommendations to WorkSafe, including establishment of a business unit to independently review disputed decisions.

Ms Glass proposes the Government should commission an independent review of the claims management model, specifically ensuring appropriate compensation is paid to workers in complex cases.

She also recommends the Government introduces a new dispute resolution process that allows for binding determinations on the merits of claims decisions and which is inexpensive and timely.

Workplace Safety Minister Jill Hennessy says recommendations have been accepted by the Government and WorkSafe.

Ms Hennessy has convened an independent Monitoring and Oversight Committee with representation from unions, employer groups and medical professions and has written to the WorkSafe board urging a quick response to the recommendations.

WorkSafe CEO Colin Radford says much work has been done to improve services and support and the organisation is in the midst of a major transformation program to improve the way claims are managed.

“When injuries or illness do occur, workers deserve to be treated with empathy and respect and to receive the right support and the right entitlements in a timely manner,” he said. “To those injured workers for whom this has regrettably not been the case, I apologise.”