The outsourcing of worker’s compensation claims to commercial insurers has led to “downright immoral and unethical” actions, the Victorian Ombudsman has found.
WorkSafe Victoria outsources the management of its WorkCover claims to Allianz, CGU, EML, Gallagher Bassett and Xchanging.
The Ombudsman’s 250-page report, which follows an 18-month investigation, has revealed these agents are making unreasonable decisions to terminate claims in order to maximise profits.
Ombudsman Deborah Glass said this “raises questions about the suitability of commercial organisations to manage complex claims”.
“Agents are still unreasonably terminating complex claims: cherry picking evidence, doctor shopping, relying on Independent Medical Examiners (IMEs) over treating doctors even when evidence is unclear, contradictory or inconclusive – or ignoring it if it didn’t support termination,” she said.
“Many of the decisions and actions we saw were not only unjust, unreasonable and wrong. Some were downright immoral and unethical.”
The Ombudsman’s report details 59 individual cases.
In one case involving an aged care worker with a back injury, insurer Gallagher Bassett had stalked the worker without “sufficient justification … in line with the requirements of the WorkSafe Claims Manual”.
“The agent used surveillance to check her mobility. Even though the surveillance report confirmed she walked with a limp throughout, the agent considered extending it,” Ms Glass said.
“The surveillance must have been intrusive, as Sophia asked the agent if they were doing it.
“Even more troublingly, the agent denied it and told her if she had concerns about being followed she should go to the police.”
‘WorkSafe is too often unwilling or unable to deal’
Ms Glass also found shortcomings in WorkSafe’s role to oversee agents, noting questionable audit passes on decisions, workers being referred to conciliation or court despite inadequate decision making and insufficient oversight of IMEs.
“The system is failing to deliver just outcomes to too many people; agents continue to make unreasonable decisions, the dispute process is time consuming, stressful and costly, and Worksafe is too often unwilling or unable to deal”, she said.
“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.”
The Victorian Government has agreed to the Ombudsman’s recommendations to commission an independent review of the claims management model and introduce a new dispute resolution process.
The Ombudsman also made 13 recommendations to WorkSafe which it has agreed to, including the regulator setting up a dedicated business unit to review disputes.