Administrative and scheme delivery changes

New standard for the management of psychological injury claims (Standard 33)

A new standard for the management of psychological injury claims took effect on 1 March 2021. The new standard (Standard 33) is included in the existing workers compensation Standards of practice: Expectations for insurer claims administration and conduct. Standard 33 is based on the principle that psychological injury claims are to be managed with empathy and a strong focus on early treatment, tailored communication, and timely recovery and return to work.

Following the commencement of the new Standard of practice 33 on 1 March 2021, an updated insurer guidance note “GN2.3 Managing claims for workers with a psychological injury” has now been made available on SIRA’s Claims Management Guide. This note provides guidance to insurers on how to adopt and tailor key evidence-based case management practices to achieve better outcomes for workers with psychological injuries.

Standard 32: Managing claims during the COVID-19 pandemic

In June 2020, a new Standard of practice was developed to set expectations for insurers about the handling of COVID-19 workers compensation claims and claims handling practices more generally throughout the period of the pandemic. Specifically, Standard 32 was designed to:

• clarify expectations regarding insurer decision making and determination of weekly payment entitlements to promote transparency and consistency, and provide certainty for impacted workers
• reduce barriers and ensure workers are fully informed of supports and options available to them
• support workers through their recovery and return to work.

The Standard also supports the presumptive provisions introduced in May 2020 to enable workers in prescribed employment who are diagnosed with COVID-19 to automatically be presumed to have contracted the disease in the course of their employment.

SIRA will continue to closely monitor the management of COVID-19 related claims and will consult on the need to further refine this Standard if appropriate.

Healthcare review

SIRA continued its comprehensive review of regulatory requirements for healthcare arrangements in the workers compensation scheme. The review improves regulatory and fee setting approaches to ensure injured people have access to the right healthcare, at the right time, for optimal recovery and return to work.

Increased transparency

In 2020/21 SIRA published more scheme information than ever before - through regular updates on the performance of the schemes, insurers, service providers, and other regulated entities. There was a particular focus on SIRA’s open data portals, which provide self-service visual analytics tools to make it easy to view and compare scheme data and insurers' performance over time. SIRA continues to refine the way it measures and publicly reports on scheme and regulatory performance as part of its commitment to increasing transparency and accountability.

Independent Review of icare and the five-year statutory review of the State Insurance and Care Governance Act 2015 (SICG Act) (McDougall Review) on 4 August 2020 – McDougall Review

NSW Government established the Independent Review of icare and the five-year statutory review of the State Insurance and Care Governance Act 2015 (SICG Act) (McDougall Review) on 4 August 2020. The review, headed by the Hon Robert McDougall QC, brought forward and broadened a scheduled statutory five-year review into the SICG Act. It was also expanded to include a root and branch examination of icare and the operations, structure, finances, management, and culture of the workers compensation scheme.

On 30 April 2021, the McDougall Review published the final report, which made 49 recommendations. The review stated that, once all relevant recommendations have been implemented, “… the result should be a workers compensation system in this State that delivers fairly to injured workers the full measure of their statutory entitlements and does so efficiently and at the least cost possible to employers.” Key recommendations included:

• That the legislature consider amending legislation to state clearly the objectives sought to be achieved by the creation, and the roles, powers and functions, of icare, SIRA and SafeWork NSW as legally distinct entities.
• That the legislature consider amending legislation to extend SIRA’s investigative powers to icare, to the extent necessary to enable SIRA properly to perform its functions.
• That the government appoint a suitable agency or body to conduct a review and reconciliation of the WC Act, WIMWC Act and the SICG Act into a single consolidated piece of legislation.
• That SIRA develop an accelerated plan for implementation of the findings from its Healthcare Review.

The NSW Government immediately accepted 35 recommendations that could be implemented operationally.

Law and Justice Review

On 18 March 2020, the Standing Committee on Law and Justice commenced its 2020 Review of the Workers Compensation Scheme. The Committee handed down its report in April 2021. It included seven recommendations, some of which overlap with recommendations of the McDougall Review.

SIRA’s Return to Work Action Plan

1. SIRA has required all workers compensation insurers to resubmit their business plans with detail on how they will improve 4-week return to work performance. Resubmitted business plans are due to SIRA by 28 February 2022.
2. SIRA will review all insurers’ return to work practices in the first half of 2022. The review will include an assessment of insurers’ injury management program, file reviews, interviews with customers and claims staff, and a review of the systems and controls in place to identify workers at risk of not returning to work.
3. SIRA is introducing a return to work and early intervention Standard of Practice. The standard articulates SIRA’s expectations when it comes to return to work and provides a checklist to help identify the risk factors for delayed recovery. SIRA is publicly consulting on the standard until 28 February 2022.
4. SIRA will commence publishing the return to work performance of all insurers in 2022. SIRA is committed to improving transparency in the workers compensation scheme and holding insurers accountable for their performance.
5. SIRA is establishing a dedicated return to work inspectorate. The inspectorate will seek to improve workers’ recovery and return to work outcomes through education initiatives and, when necessary, enforcement action targeted at employers.
6. SIRA is funding a research fellowship at the Black Dog Institute for 2 years to focus on return to work for people with a psychological injury. This initiative will help SIRA understand barriers to recovery and help workplaces manage successful return to work for people with a psychological injury.
7. SIRA has expanded the scope of its review into the compliance and performance of Treasury Managed Fund (TMF) government agencies to audit return to work performance. The review will support the public sector to implement improvements where they are needed and ensure that it has best practice systems in place.
8. SIRA will use predictive modelling to identify and target employers with workers that may be at higher risk of delayed return to work. SIRA will seek to support and educate the employers through outbound calls, site-visits and the provision of information to improve workers’ return to work outcomes.
9. SIRA is trialling its successful CTP Assist program in the workers compensation scheme for 12 months. As part of the program, SIRA will make outbound calls to workers at risk of delayed recovery as early as possible in the claims process. This contact will equip workers with the information they need to improve their understanding of the health benefits of good work and drive their recovery.
10. SIRA has partnered with the Australian Rehabilitation Providers Association (ARPA) to further explore the benefits of workplace rehabilitation providers on positive return to work outcomes. Recent research shows that the timely engagement of workplace rehabilitation providers improves return to work outcomes by up to 5% for physical injuries and 20% for psychological injuries. SIRA and ARPA will seek to expand on this research base to understand the circumstances and implement initiatives that allow workplace rehabilitation providers to have the greatest impact.

Recovery Boost Program

The third and final round of the Recovery Boost grant program opened in July.

Part of the NSW Government’s Mentally Healthy Workplaces project, the Recovery Boost program offers $50,000 grants to individuals and organisations who come up with innovative ways to improve mental health recovery at work.

In 2021 there were two streams for grant proposals:

1. Supported program – opened ahead of the main program launch on 1 June 2021
2. Independent program – opened 2 July 2021

The supported stream is designed to help targeted groups (like university students, small business, community representatives, regional NSW workplaces, Aboriginal, youth, and Culturally and Linguistically Diverse (CALD) groups) identify a mental health problem and articulate a solution for consideration for the Recovery Boost grant program.
The supported stream will provide mentors and business coaches to selected participants to help develop their idea into a Recovery Boost project application.

Workers' compensation regulatory activity

SIRA’s regulatory activities are focused on areas of highest risk to injured people, policy holders and the workers compensation scheme. SIRA’s enforcement is informed by the severity of harm or potential harm, the degree of negligence, and/or the need for deterrence. During the 2020-2021 financial year, SIRA maintained targeted compliance and enforcement activity, alongside education and assistance initiatives, to deliver on its strategic goals of improving customer experience and results, maintaining scheme and policy affordability, and building public trust. Key regulatory activity for 2020–2021 included:

• $37,500 in penalty notices were issued to businesses that were uninsured
• 139 complaints about employers not providing suitable work were referred for investigation
• SIRA commenced audits of claims management by the Nominal Insurer and an audit of icare’s pre-injury average weekly earnings (PIAWE) calculations and compliance with workers compensation legislation.
• three performance audits were conducted on self and specialised insurers
• 340 allied health providers were suspended from delivering services in the workers compensation scheme for failure to meet the approval criteria.

Stronger supervision

SIRA continued its focus on the supervision and performance of regulated entities during the reporting year and took significant steps to drive improved performance in the workers compensation system

Policy Developments

GIG Economy - Approach to food delivery riders

In April 2021, SIRA published a discussion paper to explore the personal injury insurance arrangements for food delivery riders in the gig economy followed by stakeholder consultation June 2021. Options included in the paper were:

• Maintain the status quo with increased education and awareness about existing personal injury and income protections.
• Require gig platforms to provide personal injury insurance for their food delivery riders.
• Establish a scheme to provide a personal injury insurance safety net for food delivery riders.
• Establish a scheme to provide personal injury insurance to food delivery riders modelled on motor accidents (CTP) scheme benefits.
• Establish a scheme to provide personal injury insurance for food delivery riders modelled on workers compensation protections.
• Extend the existing workers compensation scheme to cover food delivery riders by deeming food delivery riders as ‘workers’ for the purposes of workers compensation legislation.
• SIRA is continuing to provide advice to NSW government.

COVID-19

The impacts of the COVID-19 pandemic continued to be felt throughout 2020-2021 across the NSW workers compensation system. To provide flexibility and support to injured people, employers, and services providers, various COVID-19 measures, such as those outlined below:

• Greater use of telehealth
• Telehealth remained available without insurer pre-approval for nominated treating doctors, medical specialists (within three months from the date of injury), and some allied health services.
• Easier access to certificates of capacity/fitness
• Treating physiotherapists and psychologists to issue second and subsequent certificates for injuries and illnesses. The first certificate is still required to be issued by the nominated treating doctor.
• Financial assistance for recovery at work
• Financial assistance through SIRA’s recovery at work programs remained available. The equipment program, for example, was able to help set up workers to work from home so they could continue their recovery at work.

Legislative amendments

Personal Injury Commission (PIC)

The Personal Injury Commission (PIC) and Independent Review Office (IRO) commenced operation on 1 March 2021 as provided for under the Personal Injury Commission Act 2020. The Commission now manages both workers compensation and Motor Accident insurance disputes, taking over the former functions of the Workers Compensation Commission and SIRA’s Dispute Resolution Services.

The IRO has expanded the functions of the former Workers Compensation Independent Review Office (WIRO) to now receive complaints from injured people about their workers compensation or CTP insurer. SIRA will continue to receive complaints that may require regulatory or enforcement action.

Several workers compensation guidelines and fees order were updated to reflect changes resulting from the commencement of the Personal Injury Commission Act 2020. The updates are available in the NSW Government Gazette (No 78, 26 February 2021) on the NSW legislation website.

Miscellaneous amendments

The Motor Accidents and Workers Compensation Legislation Amendment Bill 2021 was introduced into the NSW Parliament on 9 June 2021. In addition to amendments to the NSW compulsory third party legislation, it provides for a number of minor workers compensation amendments. This includes amendments to the Workers Compensation Act 1987 to provide an additional compensation entitlement for the benefit of the dependent children of deceased workers, amendments to the Workers Compensation (Bush Fire, Emergency and Rescue Services) Act 1987 to better align workers compensation entitlements for both paid and volunteer workers in NSW, and amendments to the State Insurance and Care Governance Act 2015 to provide greater powers for the NSW State Insurance Regulatory Authority to regulate the provision of services to injured workers. The Bill passed the Legislative Assembly on 23 June 2021 and has been deferred in the Legislative Council for a later sitting.

Legislation Amendment (Emergency Measures) Act 2020

The COVID-19 Legislation Amendment (Emergency Measures) Act 2020, which commenced on 25 March 2020, amends the Workers Compensation Act 1987 to relieve pressure on general practitioners and the overall health system during the COVID-19 pandemic.

COVID - 19 Legislative Amendment (Emergency Measures – Miscellaneous) Act 2020

The COIVD-19 Legislative Amendment (Emergency Measures – Miscellaneous) Act 2020, which commenced on 14 May 2020, introduced a presumption for workers in prescribed employment. Workers in prescribed employment diagnosed with COVID-19 are presumed to have contracted the virus in the course of their employment. The new provisions are designed to make it quicker and easier for workers in prescribed employment to claim and access workers’ compensation entitlements.

This amendment also enables the sharing of financial risk arising out of COVID-19 between all insurers. The cost-sharing mechanism would enable COVID-19 claims costs to be redistributed across the workers’ compensation system. This would prevent individual employers and insurers bearing a disproportionate and inequitable amount of risk and will help to maintain a healthy and competitive workers’ compensation market in NSW. It is anticipated that redistributed costs would largely be passed on through employer premiums. In this way, all employers would contribute to supporting workers who contract COVID-19 at work.

COVID - 19 Workers Compensation Amendment (Consequential COVID-19 Matters) Regulation 2020

In July the Workers Compensation Amendment (Consequential COVID-19 Matters) Regulation 2020 commenced to support the legislative provisions around presumption.

The Regulation sets out the medical tests and results required for workers to be taken to have contracted COVID-19 for the purposes of the presumption. The Regulation also provides further detail about these workers’ presumptive right to weekly payments and clarifies the categories of prescribed employment.

Other changes include:

• Amendments to the Workers’ compensation guidelines to remove barriers for workers to access consultations and examinations by telehealth or video consultation and requiring insurers to consider public health orders when requiring workers to attend appointments.
• Changes to certificates of capacity came into effect in April 2020 to relieve pressure on the health system during the pandemic, and to make it easier for workers to continue to receive their weekly payments, without needing to visit their nominated treating doctor. The changes mean that the SIRA-approved treating physiotherapist or psychologist can issue second and subsequent certificates of capacity.
• Introduced changes to the Workers’ Compensation Market Practice and Premiums Guidelines to minimise the impact of JobKeeper payments on workers’ compensation premiums and to ensure that employer premiums are not inflated by government programs designed to support workers and employers during the COVID-19 pandemic.
• Developed a new Standard of practice 32: Managing claims during the COVID-19 pandemic, which is aimed at ensuring a flexible and adaptable approach to claims, applicable to all claims and insurers from 26 June 2020. The Standard of practice is designed to expedite certain claims management decisions, reduce barriers, and support workers through their recovery and return to work.
• Updating various Workers’ Compensation Fees Orders to reflect changes to telehealth, certification of capacity and fitness by treating physiotherapists and psychologists, various definitions, payment classification coding and independent medical examinations.