The State Insurance Regulatory Authority (SIRA) plans to remove surgical fee loadings that have contributed to soaring costs in the NSW workers’ compensation scheme.

SIRA says no other specialists in the NSW scheme are paid loadings on top of Australian Medical Association (AMA) rates and the workers’ compensation fees are out of step with levels in other jurisdictions.

A recent benchmark study found surgeon fees for the NSW scheme are between 50-400% higher than in other person injury schemes, including compulsory third party (CTP), and the broader market. The Nominal Insurer for the scheme is managed by state-owned icare.

“Rising costs in the scheme are ultimately borne by NSW employers through higher workers' compensation premiums,” SIRA said today. “The savings from changes to surgical fees will put around $40-55 million back into the scheme each year.”

SIRA has written to the AMA, the Australian Society of Orthopaedic Surgeons and relevant medical and surgical groups and asked for any feedback on the proposed change by March 31.

Under the proposal, loadings from surgical fee orders would be removed and surgeons would be paid in line with the rates included in the November 2020 AMA list and paid in the CTP scheme. They would still be among the highest in all Australian jurisdictions.

High surgical fees have exacerbated the impact of the growth in the number of surgeries performed, SIRA says.

Surgery services grew at 13% each year between 2017 and 2019, compared to an average growth rate of 3% in private health insurance and Medicare, while workers’ compensation healthcare costs have been rising by around 12% each year since 2016 despite the fact that claim numbers have remained relatively stable.

A table provided by SIRA shows a spinal fusion in the worker’s compensation scheme billed at $17,161.87 compared to $7,858.75 in the CTP scheme. The fee from another doctor for a knee arthroscopy was $3,412.50 compared to $2,275.