Ombudsman reads the riot act to WorkSafe Victoria & insurers

06.01.11

A report by the Victorian ombudsman has delivered
scathing criticism of the records and information
management practices of WorkSafe Victoria and the
six major insurance companies it authorises to
manage workplace claims – Allianz,
CGU, Gallagher Bassett, GIO, QBE,
and Xchanging.

Outdated information technology systems, inadequate
file maintenance and inadequate understanding of
statutory obligations were highlighted as the
reasons for the substandard recordkeeping.

The Ombudman found that poor record keeping at
the insurance companies caused delays in payments,
breaches of privacy and resulted in manipulation
of the WorkSafe incentive scheme for agents.

Ombudsman George Brouwer told the Victorian
government that the number of complaints about
WorkSafe and its agents has increased over the
past three years by 27 per cent, and the trend appears
to be continuing this year.

Examples of suboptimal file storage identified by
Worksafe inspectors at Victorian insurers.It found that
staff at CGU had been involved in a practice that
artificially distorted the the WorkSafe incentive
scheme for agent. WorkSafe has since fined
CGU $2.8 million, and CGU has agreed to
make restitution for $2.5 million.

Mismanagement of workers’ files has led to medical
reports and other information being sent to third parties in
error, and the report showed evidence of files kept in
a state of disrepair.

“With the exception of QBE and GIO, the physical files
inspected:

• were in poor order, not folioed and contained loose
documents

• contained incorrectly filed documents, unrelated to
the claim or the claimant contained a lack of
contemporaneous notes of conversations and meetings

• were poorly secured with documents and files housed
at officers’ work stations and not secured overnight.

“The management of these files is unacceptable and
creates a risk of documents being lost, destroyed or
allocated to the wrong file. The private and often very
personal information of injured workers being kept in
such a state is of concern.”

The report found much to blame in the IT infrastructure.

“The WorkSafe scheme is administered using inadequate
information technology (IT) systems. One of the two IT
systems that underpin the entire WorkSafe scheme is a 25
year old DOS system called ACCtion. Developed in 1985,
the ACCtion system is outdated and has limited capabilities.
Managers from all agents considered that ACCtion is
inadequate, calling it ‘archaic’, ‘insufficient’, ‘dated’,
‘antiquated’ and ‘inefficient’. All agency staff
interviewed nominated upgraded IT systems as
their highest priority. “

Document management was not up to standard.The
Ombudsman’s report criticised the insurance companies
for their lack of awareness of requirements under the Public
Records Act, as well as their storage of physical files.

On numerous visits to the insurance companies it fond
examples as follows: “Files inspected by my officers
were in a state of disorder. Files had loose documents,
torn covers and were overfull. Files at Allianz were
stored on shelving which were not capable of being locked.
CGU’s files were stored in lockable cabinets. However
there were files stored on top of these cabinets and my
officers were advised that these cabinets are not generally
locked at night. Files inspected by my officers were
in a state of disorder. “

However the Ombudsman found insurer QBE was a
shining light.

“QBE has implemented an electronic file system and
as such does not have physical files. All physical
documents relating to a file are scanned into the
electronic system by an external contractor and
then stored off-site.

In place of a physical file QBE
maintains the correspondence related to files on
an electronic IT system called Automated Workflow
Distributor.

“With the exception of QBE, none of the agents scan
or record incoming or outgoing mail. Therefore the
physical file houses the only record of correspondence
that relates to the claim and used by the agent to
 manage the claim. Such correspondence includes
medical reports and certificates relating to the injured
worker; legal documents concerning legal proceedings;
surveillance reports undertaken for the agents monitoring
the activities of injured workers; and relevant referrals
for treatment.

The Ombudman’s report also found much to criticise
in the email management and filesharing protocols at the
insurance companies. The report reads like a
basic textbook for modern enterprise content management.

“The personal email accounts of case managers often
record and store email communication with employers,
injured workers, service providers and WorkSafe.
Although my investigators were advised that emails relating
to a case are meant to be copied and recorded on the
Novus system or the physical file, my investigators found few
emails on either Novus or the physical files examined
at any of the agents.

[Worksafe responded: Agents have always operated
with their own e-mail systems and a technical solution
may not be possible in the short term. Where a
worker e-mails information directly to a claims
officer the work practice is that a hard-copy of the
email should be then placed on the physical file or
an e-copy of Novus]

“Complaints from injured workers, employers or service
providers were rarely recorded on the claim file, if at all,
and were kept on a separate system at many
of the agents. Allianz, Xchanging and CGU
advised that written complaints were
kept on file after they were actioned. During
file inspections, my officers found
this was not the case at these agents.

“Records and the details of privacy breaches are
also kept separately from the injured worker’s claim file.

“Claim-related letters for which no templates exist are
created by case workers and are stored on shared hard
drives on the agent’s computer network under the
case manager’s name, not the injured worker’s name.

“Accounts and invoices, whether paid or otherwise,
are not usually retained on the physical claim file once
they are actioned by the accounts team. They are
kept in a separate storage area.

“My investigators found that it was difficult to review
individual case/claim management given the difficult
information systems that needed to be searched.
A manager from Gallagher Bassett said: ‘The
difficulty with the whole administration is that the
information can be in many places with regards
to the file.’”

[Worksafe responded: While managing millions of
documents and around 56,000 active claims each
year is never easy in a system like ours,
WorkSafe recognises there is room for improvement.]