"The biggest jump in those costs is hospital fees, driven by surgical intervention and the associated anaesthetics," he said. To offset some of the cost increase, iCare is proposing a gap fee for treatment but it has not specified how much. Dr Colqhuon said people would be less likely to claim for procedures they didn't strictly need if there were a fee attached. "If someone is potentially out of pocket for an intervention, they are more likely to do the research to see whether or not that intervention is the best possible treatment for them," he said. "Fundamental regulatory changes are needed to support value-based care and reduce medical costs across the scheme." iCare lost $874 million last year, which it blames on increasing medical fees. The blowout in costs was exacerbated by a drop in the proportion of people returning to work after injury. The return to work rate fell from 90 per cent in 2016 to 80 per cent last year.

But doctors and the SIRA said increases in fees paid per service accounted for just 5 per cent of the recent cost rises. Australian Society of Orthopaedic Surgeons spokesman Stephen Milgate said the main reason claim costs went up last year was growth in service use, not fees. "All treatment requests must be approved by WorkCover agents and the government sets the rules as to what is compensable and what is not," Mr Milgate said. The Australian Medical Association's NSW branch is "disappointed and concerned" about the "unfounded and inappropriate attacks on the medical profession by iCare". "It is the role of iCare to drive policy approaches which improve return to work outcomes and it is no surprise to AMA (NSW) that they are failing to do so," an AMA (NSW) spokesman said.

In NSW, surgeons who perform workers compensation-related operations are paid an extra 50 per cent for the first Medicare item and then a premium of 12.5 per cent for others after that. iCare is proposing that this levy be scrapped as it doesn't apply anywhere else in Australia. Jim Stanford, director of the Australia Institute Centre for Future Work, said workers' compensation benefits were reduced after 2009 when the Liberals came to power in NSW, and premiums were cut "dramatically" to reduce employer costs. "iCare has kept effective premiums at rates more than 35 per cent lower than they were in 2009," Dr Sanford said. However, he pointed out that despite workplace injuries falling, and iCare discounting premiums for employers by $350 million last year, it still lost nearly $1 billion. A welder on the North West Metro, injured by a falling boulder, is put on a stretcher. Credit:Careflight NSW Treasurer Dominic Perrottet said the government would not pre-empt the final SIRA report, which is yet to be handed down. "We look forward to the next stage of the review process," he said.

NSW Labor's finance spokesman Daniel Mookhey said if iCare decided claims faster, injured workers would not wait so long for treatment, and the scheme would not be in financial crisis because costs compound "exponentially" if workers don't return to work. Loading "iCare's new claims model led to an insolvency crisis because injured workers could not get enough care to return to work," Mr Mookhey said. He cited a December 2019 independent report that found the iCare claims model "led to a significant deterioration ... poorer return to work rates, underwriting losses, no competition and therefore, concentration of risk". Dr Colqhuon said when iCare was established four years ago "we took on a fairly ambitious transformation and we're the first to acknowledge we have not been perfect in executing a lot of that".