Comcare embraces contestability to cut cost of workers compensation claims

By Stephen Easton

October 3, 2017

Comcare no longer has a monopoly on managing workers compensation claims in the Australian Public Service.

All departments and agencies can now take charge of managing their own claims with help from private sector insurance companies, with the expansion of a trial that began in early 2016 in the Australian Taxation Office and the Department of Human Services.

Michaelia Cash, the Minister for Employment and Minister Assisting the Prime Minister for the Public Service, announced on Friday:

“Following a successful trial, the Government will now provide Government departments and agencies with the option to utilise private sector insurers for their workers’ compensation claims management.

“This trial resulted in more efficient and cost-effective claims management, together with improved service for individuals with claims.”

Cash said $700 million had been knocked off the Commonwealth’s overall claims liabilities in three years and that premium costs for agencies were down by about $87 million for 2017-18 due to her government’s policies.

The trial saw Allianz insurance win a one-year contract to “provide claims management services” to DHS, which its workers compensation chief Helen Silver described as a “crucial win” for the firm at the time.

CGU got the contract for the trial in the ATO, but it recently dropped out for “commercial” reasons.

The trial gave the agencies themselves the responsibility for managing their own compensations claims, with support from the private companies. Comcare is now taking over from CGU, which has withdrawn from the arrangement with the Tax Office but is transferring some of its staff to the federal agency.

“Under the pilot the ATO has been responsible for determining your claims and entitlements with support and assistance from a third party claims administrator,” explains an email from ATO management to staff, published by the Australian Services Union’s tax branch.

“… The claims management pilot will continue with the ATO maintaining responsibility for determining your claim and entitlements. From 29 September 2017 onwards, Comcare will assist the ATO in place of CGU.

“The team will include CGU staff that will transfer to Comcare to maintain continuity of service and a smooth transition.”

It seems ASU members in the ATO do not support the trial. Their branch argues it involves “an inherent conflict of interest in the ATO, in effect making decisions that relate directly to its own interest” and that it has only been successful in reducing the agency’s compensation liabilities “at the cost of misery for its employees who have workplace injuries”.

The new arrangements only apply to non-corporate entities and Comcare says working with commercial partners in the trials has contributed to its reduced premiums and tighter financial figures, according to an article in The Australian, which got wind of the announcement a day before it came out of the minister’s office.

“The private sector brings a different way of managing claims and certainly those trials have contributed to the overall [improvements in the] scheme,” Comcare CEO Jennifer Taylor reportedly told the newspaper.

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