Local ACC providers lose out

A large Australian health insurer with no relevant track record is among a handful of big organisations to win ACC care contracts worth $110 million previously handled by more than 80 local providers.

All the work has been given to six providers, with Australian newcomer Medibank winning a national contract. The other large contract has gone to Healthcare NZ.

The contract decisions have drawn criticism from Opposition MPs, while home-care providers that missed out say it amounts to outsourcing ACC client management and may affect client care.

The contracts for providing personal support for injured clients were held by 86 mostly small or medium-sized enterprises or not-for-profit non-government organisations, including a number of church groups.

Medibank is Australia's largest private health insurer but its activity in New Zealand has been largely con-fined to operating the Healthline and Mental Health Line telephone services and a limited insurance business. The Weekend Herald understands it has been signing up home-care providers who missed out in the tender process as subcontractors.

ACC said the switch to fewer contractors would allow it "to work more closely with those suppliers under a structured quality and performance framework".

A source who works for a provider that missed out but won a subcontract from Medibank said that while the Australian company was not a provider of home-care services it had good contract management, IT and other infrastructure. The source expected ACC's move would lead to job losses among a "substantial proportion" of its case managers.

"What will happen is ACC will send referrals through to Medibank who will then triage or assess the client and then subcontract providers to deliver the care."

He had "personal discomfort" with ACC "outsourcing" client management but his organisation found Medibank "refreshingly easy to work with" compared with ACC.

Neither ACC nor Medibank would provide information about the value of its contract.

Labour's ACC spokesman, Andrew Little, said ACC had contracted out its home-care management as it had previously done with vocational rehabilitation.

"The ones that are paying for it are the frontline providers. They've had their payments reduced ... They're spending less time with claimants when they're doing their rehabilitative work in order to make it economic for them."

Brian Devonshire of small Palmerston North home-care provider Devon Care, said ACC's new approach was okay for bureaucrats "who don't understand what happens on the ground" but he feared it meant less choice of provider for clients. He said he was now winding up his business.

ACC Minister Judith Collins said the change would "help ensure more consistent quality of care".