The Friday deadline is looming for submissions to the NSW State Insurance Regulatory Authority (SIRA) review of soaring healthcare costs affecting the state’s workers’ compensation and compulsory third party (CTP) schemes.

Medical spending represents more than 30% of costs and SIRA believes workers’ compensation increases are outpacing private health insurance and Medicare gains, and could pose a risk to the scheme’s sustainability if they are not reined in.

The consultation period, which opened on September 23, was due to close on November 1 before it was extended to the end of this week.

The review to date has found that the main driver of rising health care costs is the increasing number of services and providers being accessed by claimants, a SIRA bulletin released today says.

Service utilisation was responsible for 61% of the workers’ compensation medical expenses growth between the 2017 and 2018 financial years, while the fee per service accounted for 5%. Growth in active claims has also contributed to the overall increase.

“SIRA is actively working with insurers and health practitioner groups on understanding and responding to the causes of these trends and on improving quality and outcomes,” it says.

“The review will result in improved regulatory and fee-setting approaches to ensure injured people have access to the right healthcare, at the right time, for optimal recovery and return to work, and so the schemes provide value-based healthcare.”

Utilisation of allied health services by the Nominal Insurer, managed by icare, rose 17% in fiscal 2018, while surgery use rose 21%, diagnostics 16% and general practitioner attendances 3%.

Allied health services costs jumped 22%, while surgery costs rose 17%, diagnostics 13% and general practitioner costs 5%.

A consultation paper and preliminary analysis by Ernst & Young says fee schedules in the NSW workers’ compensation scheme are linked to Australian Medical Association (AMA) rates with loadings, while other states use AMA rates without loadings or Medicare Benefits Schedule rates.

The NSW scheme also reimburses for “reasonably necessary” costs whereas other schemes use differing tests.

SIRA says there will likely be further opportunities for interested parties to have their say as the review progresses.

Further details are available here.