Changes to workers compensation surgical fees
SIRA has advised surgeons and relevant medical groups of planned changes to surgical fees in the NSW workers compensation scheme. The proposed change will bring surgical fees in workers compensation in line with AMA rates and fees paid in the CTP scheme, while still being among the highest of all Australian jurisdictions.
Rates for surgery in the NSW workers compensation scheme are significantly out of step with fees in other jurisdictions, Medicare and private health insurance. A recent benchmark study found that surgeon fees in the NSW workers compensation scheme are between 50 to 400 per cent higher than fees in other personal injury schemes (including the NSW CTP scheme) and the broader market.
For example, surgeon’s fees for a spinal fusion in the workers compensation scheme are more than double that of fees for the same surgery in the CTP scheme.
| Doctor | Operation | Bill in workers compensation | Bill in CTP | Difference % |
|---|---|---|---|---|
| Doctor 1 | Percutaneous neurotomy | $2,428.13 | $1,387.40 | 75% |
| Spinal decompression/ fusion | $17,161.87 | $7,858.75 | 118% | |
| Doctor 2 | Pelvic ring fracture | $6,435.00 | $4,290.00 | 50% |
| Knee arthroscopy | $3,412.50 | $2,275.00 | 50% |
Eighty per cent of the top earning surgeons in the workers compensation scheme also work in the CTP scheme – despite the differences in the fees they can charge.
The discrepancy is as a result of a unique loading on top of AMA rates that has been available to surgeons operating in the workers compensation scheme for many years. No other specialists in the NSW workers compensation scheme are paid loadings on top of AMA rates.
The high surgical fees have exacerbated the impact of the growth in the number of surgeries performed. Surgery services grew at 13 per cent each year between 2017 and 2019, compared to an average growth rate of three per cent in private health insurance and Medicare.
Workers compensation healthcare costs have been rising by around 12 per cent each year since 2016, and despite the fact that claim numbers have remained relatively stable.
Under the SIRA proposal, loadings from surgical fees orders would be removed and surgeons would be paid in line with the AMA rates included in the November 2020 AMA Fees List. In providing an extended notice period, SIRA has prioritised continuity of care and sought to minimise disruption to surgeries booked or planned for the first half of 2021.
SIRA has written to the Australian Medical Association, the Australian Society of Orthopaedic Surgeons and relevant medical and surgical groups and asked for any feedback on the proposed change by 31 March 2021.
Rising costs in the scheme are ultimately borne by NSW employers through higher workers compensation premiums. The savings from changes to surgical fees will put around $40-55 million back into the scheme each year.
Removing the loading is part of a broader package of initiatives to address escalating healthcare costs in the NSW workers compensation scheme, which includes measures to improve insurer controls around treatment payments and approvals contributing to growing healthcare costs. SIRA has escalated its supervision of leakage within the scheme after an initial review identified the need for insurers to tighten controls around payments and approvals.
These initiatives are a response to SIRA’s recent Healthcare Review, which considered regulatory and fee setting approaches to ensure injured people have access to the right healthcare at the right time for optimal recovery and return to work. The Review is not about reducing expenditure or treatment available, but rather ensuring that every healthcare dollar delivers value and quality care.
SIRA intends to co-design value-based models of care with surgeons and medical groups, commencing with a roundtable in late March. SIRA will use these models to inform future surgical fee methodologies in the NSW workers compensation and CTP schemes.
SIRA will work with insurers to monitor participation in the scheme by surgeons and orthopaedic surgeons, to determine if there are any changes.
SIRA does not expect that this change will impact surgery quality and access. A comparison of surgery quality and access in the NSW workers compensation and CTP schemes did not find that either scheme performed better.
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