ACC Partners with Private Claim Managers

ACC Partners with Private Claim Managers

The Accident Compensation Corporation (ACC) today announced that it has reached agreement with four companies to manage a small number of its long term claims.

About 600 long term claims (out of a pool of almost 12,000) will be allocated to these companies to manage. These are clients who have been with ACC for more than one year (excluding those that are classified as seriously injured).

The four companies involved are Southern Cross Healthcare (trading as Care Advantage), Wellnz Ltd, Total Rehabilitation Services (an Aon company), and Gallagher Bassett Services. They will each receive 150 claims to manage.

“These agreements will give us access to more resource to manage claims and will also let us benchmark ACC’s performance against other organisations and see if more effective rehabilitation outcomes can be achieved”, said Denise Cosgrove, General Manager, Claims Management.

“Like ACC, these firms have the goal of returning clients to their pre-injury lives as far as practicable, as soon as possible. The fact is, the longer people stay on ACC the harder it gets for them to get back to their normal lives, including work.”

The four firms already have experience managing ACC claims, on behalf of organisations in the ACC ‘Partnership Programme’. The Partnership Programme allows large organisations to fund and manage their own ACC claims, and already covers about 15% of the New Zealand workforce. ACC’s own subsidiary, Catalyst Risk Management, will also continue to manage a number of claims alongside these four firms.

“The individuals will remain ACC clients with the same entitlements as everyone else but the administration of their claims will be handled by the private firm. They will also have the same review rights as every other ACC client”.

“ACC has been concerned about the growth in long term claims for some time and has put in place a number of internal initiatives to address this, such as the Recover Independence Service that was introduced last year. This Service is already delivering positive signs of improvement. We have been considering partnering with external claims managers for more than a year now, as it is one way to help more people, as quickly as possible.”

Questions and Answers

1. Will these clients still “belong to ACC”?
Yes, they will still be ACC clients, but someone else will be managing the claim on ACC’s behalf.

2. Will their entitlements change?
No. Clients’ entitlements and legislative rights won’t change.

3. How will you chose which clients?
ACC will select a representative group of long term clients, but we will also try to match their injuries with the expertise and physical locations of the private companies.

4. What if the client doesn’t want someone else handling their claim or is unhappy with the service they get?
ACC will look at any concerns they have about the management of their claim. This change in case manager does not affect the clients’ right to ask for a review of their decisions.

5. Will the systems and processes of the private firms be the same?
Not necessarily but ACC will work with them to ensure clients continue to receive the entitlements and services required under the ACC legislation, and the firm treats the client according to the Code of ACC Claimants’ Rights.

6. What results are you expecting in terms of client outcomes and financial savings?
For the clients, ACC is hoping that they will all be returned, as far as is practicable, to their pre-injury lives, and as soon as possible. That’s exactly what ACC would have tried to achieve, and more importantly that’s what the clients want.

Estimated financial savings are harder to quantify. It will depend how well the private firms do. But if they can find ways to achieve faster, more effective rehabilitation then that should deliver financial savings.

7. Is this just about cost cutting?
No, it’s about rehabilitating more people, and doing it faster. It’s true that it may reduce scheme costs and that’s important too if ACC is to become affordable again. The rising costs of long term claims is one factor that is making ACC unsustainable and action is required.

8. Is this a way to get around the government’s cap on hiring new staff?
No. ACC has already moved more resource to the frontline, having hired about 100 new frontline staff in the last year, funded from savings in corporate office.

9. So will there be any job losses since work is being sent elsewhere?
No, this is about getting extra resource to do more work so ACC can help more clients to recover their independence.

10. But didn’t you just close your Blenheim and Thames branches? Couldn’t those staff have done this work?
Case management positions have not been lost as a result of the closure of those branches, just moved to other locations.

11.
What will happen once they have finished with the initial group of clients – will you pick another group of clients and start again?
There are no plans to do more at this stage, but if it produces great results for ACC clients and achieves savings then it would be appropriate to consider extending the idea. It’s not out of the question.

12. How long is it expected to take/last?
ACC will initially look to work with these firms for a period of up to two years.

13. Has this been tried before?
No, not like this. However, some organisations in ACC’s Partnership Programme do use private firms to manage their claims, so the concept is not entirely new. The Partnership Programme covers about 15% of NZ workers.

14. Is this a repeat of the 1999 experience with private insurers?
No, in 1999 the private firms actually ‘owned’ the clients. In this case they are still ACC clients, but someone else is helping ACC with some of the work.

15. Is this the first step to privatisation?
No, it’s about getting more resource to help clients. The arrangement will not see private providers in competition with ACC, but working with the organisation.

16. Did the Minister ask you to do this?
No.

17. How were these companies selected?
ACC approached firms it believed had the experience and resources to do the work. All of the firms approached currently manage claims as part the ACC partnership programme which allows Employers to use private firms to manage the rehabilitation of their employees following a work accident

18. How much will you pay them?
How much they are paid is commercially confidential but if they get better outcomes for our clients, sooner than would otherwise have occurred, then it is money well spent.

19. Will they receive any additional incentive payments for getting people off ACC?
Part of the fee payable is being held back and is only payable upon the company achieving aggregate targets around returning clients to independence. Any such independence would need to be proven to be sustainable in the longer term.

ENDS

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