ACC's quota deal with Smith revealed

PHIL KITCHIN
Last updated 05:00 25/06/2012

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ACC'S policy of ridding itself of thousands of long-term clients is laid bare in agreements the corporation signed with the Government revealing that a far tougher quota system was adopted two years ago.

Senior ACC managers have since spoken of their success at cutting long-term clients from the books at a conference in Australia, saying the "low-hanging fruit" was gone but the job would get harder.

General manager of claims management Denise Cosgrove told the actuary conference in Brisbane in November that ACC has now shifted its focus to high-cost claims and had "an absolute strategy" but was keeping it secret.

"But that's what we are developing this year. The dollar amount we can achieve in savings from the long-term tail service, so that's how we can drive some of these improvements," she said.

"You might sit there and say, 'Well yeah, sure, that's just all the low-hanging fruit and the easy gains. How are you going to sustain that momentum?' And I get that constant message from the board every day."

In June 2010, then ACC minister Nick Smith and outgoing ACC chairman John Judge signed a three-year agreement that stated as a "priority" that the corporation would get rid of 1150 long-term clients a year. It had 13,157 such clients when the service and purchase agreement was signed.

For the first year of the agreement, ACC beat its target by "exiting" 1542 clients. The agreement was then amended, and last year aimed to reduce long-term client numbers by 406. ACC again beat that figure by cutting 843.

Ms Cosgrove told the group of insurers and actuaries in Brisbane that ACC had "an absolute strategy ... and we're not reporting it as a public measure yet". Its focus was now on high-cost claims because the "actuarial release" would be stronger.

The policy has drawn criticism from ACC clients, advocates and politicians.

Greens ACC spokesman Kevin Hague said the agreements showed ACC's board was under pressure to "literally remove thousands of claimants from the corporation".

The pressure from Dr Smith led to the board pressuring frontline staff and managers into adopting "highly unacceptable practices" such as bonus payments for getting clients off its lists, he said.

ACC had not yet signed an agreement with current ACC Minister Judith Collins, which would give her an opportunity to show her stated intent to "drive a culture change in ACC to restore public trust and confidence" in it.

"If, instead, the agreement she signs looks more or less the same as those of her predecessor, then her words will be seen as hollow," Mr Hague said.

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An ACC spokeswoman said the long-term claims pool had decreased in recent years because there were fewer claims entering it and more leaving it.

- The Dominion Post

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