Health insurer Southern Cross battles ACC

Even young people can have pre-existing conditions that entitles ACC to turn down claims.
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Even young people can have pre-existing conditions that entitles ACC to turn down claims.

A crack team of specialists at health insurer Southern Cross is forcing ACC to reverse decisions to decline cover for surgery.

There's a fresh focus on how hard it is for injured people to challenge ACC when it declines a claim with the release of the Solving the Problem report, and outspoken comments from former prime minister Geoffrey Palmer.

Southern Cross set up its team a decade ago because it believed ACC was wrongly turning down legitimate claims by policyholders, leaving the health insurer to pay the cost of treating them.

The insurer said it scrutinised around 200 cases a month where policyholders had had claims declined, usually older people whose injuries ACC concluded were wholly or substantially caused not by their accidents, but by underlying medical conditions. Usually age-related degenerative conditions.

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In the past financial year the insurer succeeded in turning over 28 declines a month.

"Over the past five years, the number of members assisted each year has ranged between 294 and 438, and the claims payments recovered (each year) have ranged between $3.8million and $4.95m," Southern Cross spokeswoman Rebecca Ogilvie said.

During the year to the end of June 2016, the insurer helped 340 members, and ACC reimbursed Southern Cross $4.95m, she said.

ACC spokesman James Funnell said the no-faults accident insurance scheme had a dedicated alternative disputes resolution (ADR) process arranged with the insurer.

Injury or pre-existing condition?
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Injury or pre-existing condition?

"We acknowledge that many ACC claims are not clear-cut but our decision will always be informed by expert advice from medical, legal or technical advisers, and we reject suggestions that we have a bias towards declines," Funnell said.

In the year to the end of June 2016, 138 declines went through the ADR process.

"We reversed 52 decline decisions as a result of new information, Southern Cross agreed that our decision was correct on 48 decisions, and we re-declined 38 after new information was provided."

Southern Cross challenged 28 of those re-declines, taking them to a formal review, 18 of which went in Southern Cross' favour.

In total, ACC said there were 196 formal reviews against surgery decisions involving Southern Cross clients in the year ended 30 June 2016, with the insurer winning more than half.

ACC changed its decision in 67 cases, and had 49 decisions overturned.

ACC annual target for the proportion of claims that end up at "formal" review was 2.7 per cent in the past year, lower than the proportion being challenged by Southern Cross, though the vast bulk of claims made to ACC were "minor claims"  not involving expensive surgery like the claims Southern Cross challenges.

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There are around 6000 formal reviews of ACC decisions heard by Fairway Resolution each year, and ACC won in 84 per cent of them.

ACC acknowledged it was stressful for injured people to challenge its decisions, so it tried to avoid the formal review process where possible and use more user "friendly methods" to settle matters. It funded advocates to assist people with claims and, if necessary, reviews.

"We also pay for all the review costs including medical reports obtained by the customer," Funnell said.

Southern Cross' team helps members gather evidence and challenge ACC, effectively acting as lawyer and advocate to counter the legal muscle of ACC.

But it also pays to treat them while the challenge is underway. People without health insurance who are declined for treatment by ACC must wait for treatment on the public health system.

Ogilvie said sometimes Southern Cross victories resulted in policyholders also getting weekly compensation for lost earnings.

Last month, lawyer Warren Forster released a report claiming that when challenging ACC: "an injured person must navigate a complex area of law and policy, often without adequate resources or expert assistance, against a statutory Crown Entity with an abundance of both."

A Government report last year from lawyer Miriam Dean found there was "a considerable imbalance in the resources ACC can bring to bear on cases compared with those available to claimants."

ACC chief executive Scott Pickering told said the organisation's systems and processes were "complex and difficult to navigate for customers and our own staff", but it had been going through a "transformation" over the last three years to address this.

 - Stuff

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