Introduction
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Background
ACC contributes to the cost of treating the injuries of claimants
1. ACC pays, or contributes towards, the cost of treating and rehabilitating claimants who have been injured. These payments are set through contracts with treatment providers, prescribed under regulations, or set at an appropriate agreed amount if not covered by regulation or contract.
2. In the 2020/21 year, ACC spent $1.23 billion on injury treatment whose cost was set by contract and $338 million on injury treatment whose cost was set by regulation.
Cost of treatment regulations
3. Section 324 of the Accident Compensation Act 2001 (AC Act) allows the making of regulations prescribing:
- the costs ACC is liable to pay for goods and services related to rehabilitation (which includes treatment)
- when and how payment is made, and
- the people those payments are made to.
4. The regulations set the amount of the payment made to providers by ACC on behalf of the claimant for particular rehabilitation services. How the treatment is provided may differ between providers of the same service.
5. Providers have discretion to set what they charge claimants, so in most cases claimants need to make an additional payment directly to the treatment provider (referred to as a co-payment) to cover the portion of the cost of the treatment not met by ACC.
ACC has to regularly review these regulations
6. ACC has a statutory obligation under section 324A of the AC Act to review, every second year, the amounts prescribed by regulations made under section 324.
7. The purpose of the review is to assess whether adjustment to any of the amounts is required to take into account changes in the costs of rehabilitation. After completing the review, ACC must make appropriate recommendations to the Minister for ACC, which may include various options.
8. The recommendations are assessed to see how well they fit the Government’s policy objectives. After determining which recommendations from ACC to consider adopting, the Minister must consult with appropriate parties before finalising the recommended changes to the regulations. To meet this consultation requirement, MBIE is publishing this consultation document on behalf of the Minister for ACC.
What regulations are proposed to be changed?
9. The proposals discussed in this document affect providers listed under the Accident Compensation (Liability to Pay or Contribute to Cost of Treatment) Regulations 2003 (Cost of Treatment Regulations).
10. The Accident Compensation (Apportioning Entitlements for Hearing Loss) Regulations 2010, which prescribes the payments able to be made for the assessment of hearing loss and the provision of hearing devices, including servicing, fitting and repair, are not proposed to be changed in this review round.
11. Final recommendations on changes to the regulations were originally intended to be provided by ACC to the Minister in December 2020. However, it was agreed that further work be undertaken to develop pricing adjustments to take account of differences between professional groups. This allowed the proposed increases to be tailored to reflect wage movements in the relevant occupational groups in the health sector. At various times the work was also delayed by the impact of COVID-19.