A report into WorkSafe Victoria has highlighted the systemic failure by the organisation’s six authorised insurance agents to keep adequate records for workplace injury cases. In a scathing review of the file management systems implemented by insurers CGU, Allianz, Xchanging GIO, QBE and Gallagher Basset, Victorian Ombudsman George Brouwer has reported:

• Privacy breaches involving case files have occurred at all WorkSafe agents, with 222 breaches reported by the agents between July 2008 and December 2010;
• Rogue staff members at CGU Insurance had delayed the processing on invoices for payment to rort WorkSafe’s incentive payments;
• Poor record keeping has been directly responsible for the delay of a number of payments to injured workers; and
• Delays in payments to service providers are causing some medical practitioners to lose faith in WorkSafe.

In one section of the report, Mr Brouwer noted his “concern that WorkSafe and its external auditors have not highlighted the generally poor standard of record keeping despite numerous visits.”

Accompanying photos from the Allianz and Xchanging agent offices show shelving, filing cabinets and even floor space bulging with workplace injury records. Mr Brouwer evidently appreciated the irony of workplace injury case records posing their own occupational health and safety problem.

Delayed Payments: Return to Work Implications

The report notes that delays in payments have become a common cause of complaint by service providers, and many of these delays are directly attributable to poor record keeping by insurance agents. In one case, a medical practitioner was owed more than $1,500 by insurance agent Gallagher Basset for a series of consultations between July 2009 and August 2010. After a formal complaint was lodged with WorkSafe and the matter was investigated, the case file was contained no evidence of whether initial claims were received by the company.

The Ombudsman warns that some medical practitioners or physiotherapists will lose faith in the WorkSafe system and discontinue service for injured workers until receiving payment from authorised agents. This has the potential to negatively affect return to work outcomes in two ways:

• A delay in an insurer agreeing to surgery has the potential to prolong injury and impact on patient satisfaction and wellbeing; and
• When medical practitioners have a negative view of an insurer’s influence on the situation, delays in providing coverage can have doctors unnecessarily keeping patients off work in the misguided belief they are assisting their patient.

Mr Brouwer also found that payments to injured employees had been delayed by inadequate record keeping. In one case, insurance agent Xchanging prevented an injured woman from receiving weekly payments for 18 months, by which time she was owed in excess of $20,000. When the Ombudsman’s office reviewed the case, they found no evidence that Xchanging’s internal review process had been followed.

Delays in payments can cause financial hardship in injured workers. As many payments by agents are made in the form of reimbursements for medical services already rendered, the timely processing of payments is essential to prevent patients from suffering the burden of necessary medical expenses. When delays do occur, Mr Brouwer warns that they have the potential to undermine faith in the WorkSafe system and negatively impact on return to work outcomes.

WorkSafe Response

WorkSafe Victoria is evidently keen to preserve its reputation for positive outcomes. WorkSafe have been proactive in responding to the Ombudsman’s criticisms, with management agreeing in principle to all of the report’s recommendations after consultation with Mr Brouwer.

Over the next three months, WorkSafe will revise its oversight framework to ensure:

• Regular auditing of agent record systems;
• Introduction of a centralised registry system for case correspondence received by agents;
• Implementation of standardised procedures for document storage by agents;
• Random sampling of correspondence leaving agents for oversight purposes; and
• Introduction of a formal handover procedure for when case files are allocated to new case managers.

The full report can be found at the Ombudsman’s website, here.