Rightly or wrongly, when we think of workers’ compensation scams the first thing that tends to come mind is a “dodgy” claimant rorting the system.

However, in Victoria recently a different kind of rort – allegedly perpetrated by medical service providers – has been making the headlines, leading to a three-way argy bargy between the Australian Medical Association (AMA), WorkSafe Victoria and the Victorian Ombudsman.

The issue was brought to the fore at the end of 2008, when the Ombudsman released a report into the billing practices of a surgeon at Alfred Hospital, who was said to have billed WorkSafe, the TAC and Medicare for surgical procedures that were:

• Not performed;
• Not performed by him;
• Mutually exclusive, that is, operations not normally performed simultaneously; and
• Unnecessary.

In a subsequent report released at the end of July 2009, the Ombudsman found that, as you might already have surmised, WorkSafe Victoria’s lax checking procedures made them ‘vulnerable to fraud and being taken advantage of by service providers’. This is no trivial issue: the potential costs associated with these vulnerabilities may have been substantial.

We don’t know how much WorkSafe’s lax bill checking procedures have cost Victorian businesses overall, nor what proportion of the described inappropriate claiming was due to doctors deliberately exploiting loopholes, as opposed to simple error. We do know that WorkSafe Victoria, although initially ‘defensive’ in response to the Ombudsman’s criticisms, has since acknowledged procedural inadequacies and tightened up its systems around the payment of medical practitioners.

While it’s good news that WorkSafe is taking its fiscal responsibilities seriously, it is also important to ask what impact the scandal has had on the relationships between the return to work stakeholders involved in it. 

Consider the inflammatory reporting of the matter in The Australian on the 30th of July. “Victoria’s main government accident insurers appear to have been systematically rorted by unscrupulous medical practitioners and their systems were not able to catch the culprits or prevent losses,” political reporter Rick Wallace claimed. Predictably, the AMA came out swinging, asserting that the Ombudsman’s report contained ‘important factual errors’ and taking umbrage at media representations of “doctor rorting”. “No doctors have been charged with fraud,” the AMA stressed.  Fair enough: however, as all but the most idealistic amongst us know, an absence of criminal charges doesn’t equate to an absence of wrongdoing.

The AMA’s defensiveness probably sounds familiar to anyone who has observed the impact that workers’ comp claims’ investigations have on the relationship between employers, employees, treating practitioners and insurers. No one likes to have suspicion directed at them: it often brings out the worst, and causes individuals and institutions to dig their heels in and harden their response.

We do not under any circumstances condone rorts. However, the pragmatics of return to work dictate that some borderline claims are better off accepted than exposed. In the long run, high morale, cooperative relationships and goodwill can be more useful than weeding out every questionable claim. Is there a similarly pragmatic approach worth considering here?

The situation provides us with a lot of food for thought, and more questions than answers:

• Was there some value (as well as some risk) in WorkSafe taking doctors at their word?
• What kind of impact will this have on the level of trust between employers and treating practitioners?
• Has there been a change in employers’ perceptions of WorkSafe’s ability to manage their money wisely?
• Will doctors now be bogged down in paperwork, making them less enthusiastic participants in the return to work process?

There’s no easy answers to these questions but it is important to ask them because for return to work, healthy relationships and a sense of partnership are at least as important as finances.