ACC bonus pay for claimant cull

By Adam Bennett, Herald Online staff

Cabinet minister Judith Collins has admitted that ACC staff get paid more if they get rid of long-term cases. File photo / Ross Setford
Cabinet minister Judith Collins has admitted that ACC staff get paid more if they get rid of long-term cases. File photo / Ross Setford

ACC's departing chief executive Ralph Stewart has rejected suggestions getting claimants off the corporation's books was a priority for ACC.

Cabinet minister Judith Collins has admitted that ACC staff get higher pay for kicking long-term claimants off the ACC's books but defends the strategy as "a good thing" because it gets the clients back to work.

The financial incentives are just one of a number of tactics - including handpicking medical assessors - that ACC has adopted to improve its bottom line, Green Party MP Kevin Hague alleges.

ACC documents obtained by Mr Hague yesterday showed case managers' pay was bumped up when they exceeded management targets, including reducing the number of long-term claimants being paid weekly compensation.

Their pay was reduced if they failed to meet those targets.

The performance-pay structure amounted to "a bonus - or a disincentive if they don't kick them off as fast as ACC would like", said Mr Hague, the Greens' spokesman on ACC.

The performance-pay plan also applied to team leaders, technical claims managers and branch managers.

Ms Collins said that while meeting targets for the number of long-term claimants on ACC's books was among the criteria staff pay was linked to, it was only one component.

"If they do well in the rest of their framework then that shouldn't affect their remuneration," the ACC Minister said.

She said measures that helped ACC encourage people back into work where appropriate were "a good thing".

"I don't see any problem with that, but where I do see a problem is if anyone's being forced off ACC when they're simply not able to work, and I think that's a different thing all together," Ms Collins said.

And Ralph Stewart - ACC's outgoing chief executive - agreed.

"No one can leave ACC until they are rehabilitated," he told Radio New Zealand's Morning Report.

"There are two clear steps. The rehabilitation step's first, leaving the scheme second - it's not the other way around."

Mr Stewart said long-term claimants have dropped by about 1200 since November, to about 10,400-10,500, but denied he was put in the job to move on claimants.

He said only 20 percent of staff incentives relate to rehabilitation.

"I've worked in insurance for 28 years. I believe the process of insurance, providing for people when they have accidents, is a noble purpose in fact, and I think ACC is paramount in that in New Zealand.

Mr Stewart acknowledged recent scandals had affected the ACC's image.

"I think trust and confidence is an important part of how people perceive ACC and the events over the last four or five months haven't been easy, there's no doubt that impacts on how people feel about ACC And I think that could improve over time."

But Mr Hague said the performance pay increased the risk that "we end up with decisions about whether or not someone is entitled to compensation being driven by the financial interests of the case managers and their managers rather than the clinical needs of the claimants, which is the basis they should be made on".

He said the information he obtained yesterday under the Official Information Act was unsurprising given "we've known now for quite some time that ACC has been pursuing a deliberate strategy of targeting these long-term claimants".

The performance-pay scheme "works hand in glove with ACC's use of medical assessors whom they have handpicked on the basis of being likely to give ACC the decision they would like, and that would be in the financial interest of the case managers".

Responding to Mr Hague's questions in Parliament yesterday, Ms Collins said ACC used specialist, independent vocational rehabilitation services and clinicians, "and that is quite different from the case managers".

ACC's strategy around long-term claimants dates back three years when the corporation identified them as a threat to its long-term financial sustainability.

A 2009 Executive Leadership Team Issues Paper by senior manager Phil Riley outlined a tougher new approach to long-term claims, including a "culture change" he said should foster "a stronger balance by staff between customer focus and scheme-liability management, and increasing personal responsibility by clients".

Mr Riley estimated that the strategy could reduce ACC's liabilities by $900 million to $1.4 billion by next year.

Yesterday, Mr Hague said: "This sort of scheme is symptomatic of a sick culture within ACC. ACC needs to return to being an organisation that focuses on prioritising claimants needs."

In 2010 and again this year, the Herald ran a series of articles about the ACC's hard line with claimants, particularly those making claims for surgery.

During the series, more than 400 people complained about their ACC cases.

Some lawyers and independent orthopaedic surgeons criticised ACC over its crackdown on surgery access.

They alleged it relied on brief, weak opinions from its doctors, some of whom had retired from treating patients and were often not specialists in the areas they advised on.

- NZ Herald

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