NSW state insurer icare will conduct a workers’ compensation claims services tender next year after extending the contract of current provider EML for 12 months, while making changes to improve performance.

The extension for EML includes a $20 million program to improve the way claims are handled, while icare has also established a Nominal Insurer Advisory Committee, including unions, industry groups and government bodies, as part of a consultation process.

Group Executive of Personal Injury Rob Craig says the tender for providing claims services is expected in the middle of next year and the extension of EML in the meantime provides continuity and stability.

“The tender will be informed by the outcomes of the consultation period, which will include an assessment of the appropriate number of agents in the NSW scheme,” he said.

“While we are improving our processes, delivery and transparency, our aim is to also ensure minimal disruption to our customers.”

EML was appointed the sole workers’ compensation agent for new claims under a contract starting January 2018, when icare controversially moved from five scheme agents to one.

The contract, due to conclude at the end of December, included options for one-year extensions.

Mr Craig says the renegotiated extension reinvests $10 million of the potential variable remuneration pool from icare, with EML contributing a further $10 million in mutual benefits.

Claims services changes include reduced caseloads and team sizes, training resources, moving decision rights and management of some legal matters to EML, and triaging to ensure claims needing more support have a dedicated case manager.

“These changes are supported by a modified performance framework for EML to enable better return-to -work and customer outcomes, including a direct link between improved performance, customer outcomes and remuneration,” Mr Craig said.

The Nominal Insurer Advisory Committee membership will include representatives from Ai Group, Unions NSW, Business NSW, the CFMEU, the Australian Manufacturing Workers’ Union (AMWU), Office of the Small Business Commissioner and the Workers Health Centre.