The State Insurance Regulatory Authority (SIRA) of New South Wales (NSW) will remove the loadings from surgical procedure fees in the NSW workers’ compensation scheme, beginning July 01, 2022.
Currently, surgical fees in the NSW workers’ compensation scheme are between 50% to 400% higher than fees in other personal injury schemes (including the NSW compulsory third-party [CTP] insurance scheme) and the broader market due to a unique loading on top of Australian Medical Association (AMA) rates available to surgeons operating in the NSW workers’ compensation scheme. No other specialists in the scheme are paid loadings on top of AMA rates.
SIRA expects the removal to bring surgical procedure fees in line with Australian Medical Association (AMA) rates and fees paid in the compulsory third-party (CTP) insurance scheme while remaining among the highest of all Australian jurisdictions.
However, loadings on surgical consultation will remain in response to surgeons’ feedback giving the go signal for additional administrative processes associated with the NSW workers’ compensation scheme.
SIRA’s decision is part of a broader package of initiatives to address rising healthcare costs, including improving insurer controls around treatment payments and approvals.
In the 2019/20 financial year, healthcare costs in workers’ compensation grew by only 0.75%, mainly due to the COVID-19 pandemic – slowing a trend in place since 2016 that saw healthcare costs grow at an inflation-adjusted rate of 12% each year. Moreover, allied health services remained the fastest-growing healthcare service in workers’ compensation, with their expenditure seeing a 10% increase in the year to 2019/20, according to SIRA.
This month, SIRA pointed out that high surgical fees and the increasing number of surgeries performed, despite claim numbers remaining relatively stable, had exacerbated rising healthcare costs in the NSW workers’ compensation scheme. Therefore, removing loadings from surgical procedures could put up to $41 million back into the scheme each year.
SIRA is providing an extended notice period of the changes to surgical procedure fees to help surgeons embed the changes. It will also monitor surgeons’ participation in the scheme to determine if there are any changes and will assist workers, insurers, and GPs find available surgeons as needed.