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Safeguard Magazine

Comment—The move away from TPAs

CARL STENT asks: where to from here for ACC’s Accredited Employer Programme?

The Accredited Employer Prgramme (AEP) has been going for 13 years in its current form, which must make it arguably one of the longest running ACC claim management initiatives.

Over this period very little has changed in the way ACC administers the AEP. The Minister for ACC has clearly expressed her interest in expanding the programme, so change is on the horizon – but the path to that horizon is unclear. It is clear that the employers in the AEP have evolved. Now it is time for the AEP itself to also evolve.

In the early years the driver for entry into the AEP was to reduce the cost of levies, but there are now more layers to employers’ motivation. Once in the AEP, safety practitioners realised that the annual audit procedures kept the organisation focused; some organisations found that the claim management skill set could be expanded into wellness programmes.

The AEP established a new footprint for health and safety standards, with the secondary or tertiary ACC Audit standards even becoming a measure of safety performance to pre-qualify companies seeking supply and contracting agreements. The Achilles’ heel in this approach is that the ACC Audit standards were derived from the more robust AS/NZS4801, but leaving out some aspects of the standard that were less important to ACC, such as contractor management.

The focus of the ACC Audit standards is the management of work injury claims rather than the management of risks and hazards. However, participation in the AEP has given employers tangible evidence that health and safety is being taken seriously. In addition, the responsibilities for accident compensation entitlements shifted from the sole domain of ACC into the work-places of employers.

The success of the AEP in the early years owes a lot to the presence of Third Party Administrators (TPA) to provide the knowledge, experience and capability necessary to meet the required contract arrangements. In the beginning it was almost certain that employers would engage a TPA, but 13 years on, the extent of employer understanding and ability has grown and more employers want to manage work related injuries themselves.

The move to self-management has been a particular feature among larger employers. There will always be a place for TPAs but, whether a claim is work related or non-work related, whether it is managed by ACC or a TPA, the employer must be involved in the return of the employee to work.

I estimate that almost 25 percent of all claims arising from Accredited Employers are under the control of self-managing employers. There are a variety of models used. Some manage the whole process from end to end, including using claim management applications that have been built in-house. Others use a TPA-owned claims management application to look after reporting to ACC, while others engage case managers from TPAs if required.

Self-managing members of the NZAAE believe they get better results because they take direct responsibility for their employees and have a better understanding of injuries and return to work requirements in their businesses than can be achieved by an outside organisation.

It is notable that in recent years ACC has differentiated between TPA-managed and self-managed claimants for the research they carry out into claimant satisfaction. While there is some debate around the survey samples, there is evidence of better results being achieved by self-managers compared to the results achieved by ACC and TPAs. I accept that the jury is still out on the materiality of these findings but it is encouraging that the results are tending in this direction.

I believe that the AEP provides incentives for safer workplaces and responsible claim management because employers have some skin in the game in terms of risk, and ACC remains a referee of performance to protect claimants. Whatever initiatives the Minister plans to implement to expand the AEP, I believe that employers taking direct responsibility for the management of their injured workers will be one of the main areas of growth for the AEP in the coming years.

We all need to work together to get smaller employers to be involved in the AEP so that the success of the last 13 years doesn’t stop at the door of the largest employers.

What do you think?

Carl Stent argues that employers in ACC’s Accredited Employer Programme are increasingly abandoning third-party providers and doing it all themselves – and that this is to be encouraged. Do you agree? Visit safeguard.co.nz where you can read the story online and respond to it.

CARL STENT is chair of the New Zealand Association of Accredited Employers. www.nzaae.co.nz

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