Manitoba takes measures to address claims suppression, review assessment rate model

In late September 2012, Paul Petrie got an important phone call. It was the office of the Minister of Family Services and Labour in Manitoba, asking if he would conduct a review of the Workers’ Compensation Board (WCB)’s process for setting employer premiums, with an eye to strengthening incentives for injury prevention while targeting the illegal practice of claim suppression.

Petrie said yes, and the review was formally announced shortly after, on November 6. Petrie, at the time the vice-chair of the British Columbia Workers’ Compensation Appeals Tribunal, hadn’t been immersed in the world of experience rating and prevention incentives since the mid-1980s when he initiated the Construction Prevention Incentive Program in B.C. Fortunately, as part of his contract with Family Services and Labour, Petrie was asked to attend a conference in Toronto on this very subject, which was taking place in three weeks’ time.

That conference turned out to play an important role in framing the work that Petrie would go on to do. In turn, his work played an important role in the steps that Manitoba is taking to improve its model for assessing workers’ compensation premiums in a way that minimizes claims suppression and promotes legitimate injury prevention and return-to-work practices.

The conference was the International Symposium on the Challenges of Workplace Injury Prevention through Financial Incentives, which took place November 29-30 in Toronto. It was organized and co-hosted by two scientists from the Institute for Work & Health: Dr. Emile Tompa and Dr. Ellen MacEachen. More than 180 people came to the symposium to discuss the social, economic and policy implications of using financial incentives, including experience rating, as a mechanism for preventing workplace injuries.

It gave me a broad sweep of the field; it was almost like doing a literature review live, says Petrie. It allowed me to get caught up with developments in a field I had not been involved in since the 1990s, when I moved over to the administrative justice field. So it was a very refreshing ‘filling in the gaps’ for me.

Symposium presentations inform review’s framework, recommendations

What Petrie heard at the conference helped shape how he carried out his review and, to a lesser degree, the recommendations he would eventually make. The speakers were dynamite, he says. It was quite an amazing collection of individuals and perspectives. … The symposium had a significant impact on the frame I brought to my review.

According to Petrie, the conference prepared him for the “divergent perspectives” and “hard lines” he was going to run into once his boots hit the ground in Manitoba. Having these perspectives meant he “treaded lightly in Manitoba to make sure the questions [he] asked didn’t close off avenues of discussion too soon.”

Petrie presented his final report to the Minister in January 2013. Called Fair Compensation Review, his report identified problems with claims reporting, claims suppression and aggressive return-to-work practices. Manitoba’s current experience-rating system emphasizes claims cost control after an injury occurs, Petrie said in a Manitoba government press release issued in April 2013. My recommendations are designed to minimize claims-suppression activity where it exists, to provide incentives to prevent injuries wherever possible and, where injuries do occur, to restore the worker to safe, productive employment as soon as possible.

Some of those recommendations were informed by what he heard at IWH’s symposium, Petrie says. He points to his call for sector-based solutions (embedded in many of his recommendations), for a two-week window during which time-loss claim costs would be assigned to, and collectively funded by, an employer’s industry sector, for the incorporation of prevention and disability management incentive programs into rate assessments, and for a bi-partite mechanism to evaluate prevention programs.

Review leads to review of WCB’s rate assessment model

To what degree Petrie’s recommendations become practice in Manitoba is yet to be determined. Family Services and Labour Minister Jennifer Howard made it clear in April 2013 that Petrie’s report would be used to develop the province’s new five-year plan for workplace injury and illness prevention. Indeed, that plan, released later that spring, included 10 action areas and the seventh—“Stronger Incentives for Real Prevention”—essentially responds to Petrie’s concerns and recommendations.

The five-year plan outlines the government’s concern, based on Petrie’s report, that the WCB’s “current rate-setting structure inadvertently creates financial incentive to focus more on managing claims than on genuine injury and illness prevention.” To that end, the plan promises to strengthen prevention “by ensuring the WCB experience rating model translates into greater incentive to invest in safe work.”

The government acted on this promise by asking the WCB to review and report back by the fall of 2013 on Petrie’s recommendations, and to develop a strategy to eliminate claim suppression and inappropriate return-to-work practices. That September, the WCB announced a number of new initiatives as part of its repose to Petrie’s report. One of those initiatives was a comprehensive review of the WCB’s rate assessment model to see how it could be improved to ensure employers are rewarded for safe workplaces while removing financial incentives to minimize or suppress claims. Mr. Petrie’s report, along with the other recent review on workplace safety and health in Manitoba, make it clear that … we still have room to improve, said WCB President and CEO Winston Maharaj in a WCB media release.

The review by Morneau Shepell was released in September 2014. It confirms many of Petrie’s concerns and recommends that the WCB consider a rate-setting model that is less aggressive, that enhances collective liability protection and that potentially incorporates non-claims cost-related measures into its experience rating, such as effective injury prevention and return-to-work programs. The WCB’s response to these recommendations is not yet known.

In the meantime, the WCB asked Prism Economics and Analysis to further examine the incidence of claim suppression in the province. Its November 2013 report concluded that claim suppression is a material problem in Manitoba (see the related IWH Issue Briefing). A year later, in October 2014, the Manitoba government proclaimed a bill to amend the Workers Compensation Act. The amendments, among other things, increase penalties as of January 2015 for employers who suppress claims. New staff and resources are being put in place to investigate allegations of claim suppression, said Erna Braun, the Minister of Labour and Immigration, in a press release. This amendment will complement this work.

The thread is there, tying this back to the phone call Paul Petrie received in September 2012 and the IWH conference he attended two months later.

Publication date: 

December 2014

Type of impact: 

Type 2: Evidence of research informing decision-making