What’s wrong with Comcare? ACT boycott and Abetz will act

By Stephen Easton

Tuesday March 3, 2015

Last week’s announcement that the ACT government will develop its own public service workers’ compensation scheme rather than stick with Comcare has brought long-standing criticism of the federal government’s workplace insurer back into the open.

While the territory government has barely begun hammering out the new scheme, its ministers are confident they can create one that costs much less. Given Comcare’s premiums have skyrocketed 180% in nine years, it seems they have taken some solid advice.

Australian Lawyers’ Alliance ACT branch president Phil Schubert — who immediately applauded the decision to go it alone — believes the new scheme could also easily achieve outcomes that are far more satisfactory from the point of view of both employers and employees making claims.

Employment Minister Eric Abetz doesn’t blame the ACT’s Labor government for getting sick of paying the massive fees. He told The Mandarin:

“The concerns expressed by the ACT government about the operation of the scheme are valid. Premiums under the Comcare scheme are unnecessarily high due to a number of flaws in the legislation which has not been updated since 1988.”

But he does blame their federal Labor colleagues for not doing something about it when they were in government, and pledges:

“The Commonwealth will shortly introduce amendments to clean Labor’s mess, and improve the Comcare scheme, and to improve return to work outcomes for workers.”

Schubert suspects Abetz is planning to introduce “arbitrary time limits” for coverage of medical treatment and cuts to injury and rehabilitation entitlements, and urges the ACT government not to go down that path.

“Eric Abetz has got some grand plans and most of them are pretty dire, most of them involve cutting off people after they’ve been on a claim for a while, but the problem is they’re still sick and they’re still injured, so they’d just end up on Centrelink and it’s kind of shifting it from one budget line to another,” he told The Mandarin. He says similar changes in NSW had the same effect, but with the cost moving from state to Commonwealth.

Abetz and his cabinet colleagues are not short on advice about how to improve their in-house workers’ compensation system. A 2009 review delivered detailed recommendations to fix the scheme, as did a considered report by actuaries Taylor Fry on which it was largely based. In 2013, retired senior public servant Allan Hawke and top lawyer Peter Hanks reviewed the Safety, Rehabilitation and Compensation Act 1988, which Comcare operates under.

The ALA’s man in Canberra believes the Comcare system is “fundamentally flawed” because it lacks the mechanisms to bring cases to a close quickly. Comcare can’t settle claims through commutation — a single payout in lieu of any future rights and entitlements — and claimants can’t go outside the system to pursue common law damages in the courts. It means workers are kept on what he calls “the drip” for long periods of time, unable to move on or go back to work, and causing great expense to their employer.

“The issue is that it takes huge amounts of manpower inside Comcare to administer that …”

“The issue is that it takes huge amounts of manpower inside Comcare to administer that, and then each department will usually also have its own injury management person who’s involved in keeping the files open,” Schubert said. “In the ACT right now, there are over 500 open claims but [less than] 50 of them are less than one year old, so what that says is there’s this huge tail of claims that are just dragging the chain and basically costing heaps of money to keep administering.”

He suggests the long tail also means assistance provided to claimants costs employers in the scheme more overall than would be the case with a lump sum payout.

Comcare’s problems, according to Schubert, are cultural as well as structural. He says simple, open-and-shut cases run their course much as they would with any insurer, but when things are less clear — when different doctors disagree, for example — bureaucrats are loathe to settle the claim and move on.

He observes that in these “grey-area” cases, Comcare staff tend to err on the side of denying claims, and that it takes many months for them to reach a decision.

“Then the person has to put in for an internal review, a reconsideration, and that again can take months and months and months, so often this process can take, pushing one or two years,” said Schubert. “If at the end of that internal review stage, it’s still a ‘no’ from Comcare, then the person can still apply to the [Administrative Appeals Tribunal] to have the decision reviewed.”

Schubert says Comcare needs to become more pragmatic like a commercial firm, instead of fighting protracted battles for many years at a time over matters which are inherently subjective.

Elsewhere it has been reported that federal mandarins are also very dissatisfied with the amount of money poured into Comcare and the outcomes achieved under the framework, such that they are “close to open revolt”. When asked whether it had received such complaints from any government-funded bodies, the agency’s media team responded:

“Comcare has discussions frequently with employers in the scheme about premiums, focusing on reducing the number of claims and the time lost due to injury. Comcare’s focus is to work with employers and injured workers to improve return to work and health. Improving these outcomes will help to reduce the cost of claims and employer premiums.”

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