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Administrative Review Council - Admin Review |
Ian Campbell[∗]
This is an edited version of a presentation to the Administrative Review Council’s information and consultation forum, held as part of the Council’s project on automated assistance in administrative decision making in Melbourne on 12 November 2003.
In 1994 the Australian Government Department of Veterans’ Affairs implemented a computerised system for investigating and determining claims from veterans and widows for compensation for disabilities or deaths caused by war service. The system is called the Compensation Claims Processing System, or CCPS.
CCPS has been a major success, resulting in vastly improved client service and considerable savings in administrative expenditure each year. Independent evaluations have shown productivity has improved by 80 per cent, claims processing costs have reduced significantly, and the average time taken to process a claim has fallen from 157 days to about 60 days. Consistency of outcomes has improved, and the cost of implementing the change was recouped within three years of full implementation. Customer satisfaction is at an all-time high and staff have more satisfying jobs.
It would, however, be simplistic to think these achievements were the result of the implementation of the technology alone. As innovative and powerful as the computer system is, its introduction could not by itself have achieved the extensive improvements to the compensation process without other associated policy and administrative changes.
Business process re-engineering was undertaken, dramatically changing the way staff processed claims and liaised with clients.
Important policy changes were introduced to establish an independent agency—the Repatriation Medical Authority—to determine legally binding statements of principles that established causal connections between diseases, injuries and death and service based on sound medical–scientific evidence.
The role of the ex-service community in the claims process and its relationship with the Repatriation Commission was revised. Changes included a jointly developed and delivered training program for ex-service organisations’ practitioners to help them with preparing claims for veterans. Grants are also provided to ex-service organisations to support their claims practitioners.
All these elements of change—technology, policy change, business re‑engineering, and the Repatriation Commission’s relationship with the ex‑service community—were closely interrelated and developed concurrently under an overarching change process. In essence, the technology enabled and enhanced the harvesting of benefits through a far‑sighted and holistic approach to service delivery. As a result, when we talk about the implementation of CCPS, we in fact are talking about a substantial, multi‑faceted change process for which the technology development provided the catalyst and focus.
The totality of the changes has provided greater openness and transparency in the claiming and decision-making processes and led to improved acceptance and cooperation by the veteran community.
A new Military Compensation Scheme is proposed for implementation from July 2004. This will require a new processing system. Following the success of the introduction of CCPS, the Department proposes to use the rule bases developed for CCPS (and Defcare), statements of principles, and business re-engineering concepts for administering the new Compensation Scheme.
One of the core businesses of the Department of Veterans’ Affairs is to pay compensation in the form of fortnightly pensions to veterans and widows for the veterans’ injuries, diseases or deaths that are accepted as war-caused. This business has been a feature of the Australian repatriation system since it was established at the start of World War 1.
The Compensation Program covers the following conflicts and peacekeeping operations: World Wars 1 and 2, Korea, the Malaysian Emergency, the Indonesian Confrontation, Vietnam, Namibia, Cambodia, the Gulf War, Somalia, Rwanda, Bougainville, East Timor, Afghanistan and Iraq. It pays 158 000 disability pensions and 114 000 war widows and orphans pensions, with annual expenditure of about $2.7 billion.
The law applying to the decisions that link medical conditions or death to war service is complex and has been changed and reinterpreted many times over the years. This complexity is now compounded by the amount of time that has elapsed since some service was rendered.
Before 1994 the Department processed claims using what was essentially a manual, paper-based system that had changed little since World War 1. There were four main steps in the process: receipt, investigation, medical recommendation, and decision on the claim. Different staff completed different steps.
There was heavy reliance on the departmental medical officer’s recommendations about the relationship between the veteran’s service and their disabilities or death and also (for deciding the rate of disability pension) the extent of the veteran’s disability. The decision maker, a delegate of the Repatriation Commission, would be required to understand and apply the law and Commission policy with little practical guidance on how to make such decisions. As a result, outcomes were inconsistent. The system was also highly process bound, with little focus on the claimant’s needs.
By the late 1980s the Department had reached the view that patching the existing system was not going to bring about the necessary improvements: a major overhaul of the system and an innovative approach were needed.
In the late 1980s and early 1990s the Department had been trialling the use of expert systems for internal dissemination of legislation and policy guidelines. This work suggested that expert systems could be applied to the compensation process. In early 1992 it was decided to commission a Canberra-based information technology firm, SoftLaw, to build an expert computerised system for processing claims, as the cornerstone of a comprehensive business re-engineering project. It was a bold step to use an outside organisation for a major redesign of the business system.
In 1993 the Australian National Audit Office reviewed the operations of the Compensation Program. The key findings of the review described a system with the following characteristics:
• varying approaches to investigation, interpretation of medical opinion and decision making, leading to serious inconsistencies in outcomes • a high cost of processing claims and appeals • excessive claim processing times, with an average of over 180 days • a cumbersome administrative process, with some claims passing through 13 officers on their way to finalisation • ineffective case management, with no single officer responsible for any particular case • work being carried out at inappropriate levels • deficiencies in liaison with clients during the processing.
This confirmed what the Department already knew and provided support for the reform process.
CCPS is an innovative blend of workplace technologies. It delivers a unique whole‑of‑job claims management system to the desktop of officers processing compensation claims. The system combines expert systems and multimedia hypertext technologies, built with SoftLaw’s STATUTE Expert product. It has a client–server database, document generation facilities, case management and mainframe legacy systems integration, all within a Microsoft Windows environment.
The system combines a natural language claims processing checklist with a sophisticated, object-oriented case management system and uses a massive medical knowledge rule base to direct the investigation and determination of compensation eligibility and assessment.
The knowledge rule base of CCPS contains all the logic of the policy and the questions that have to be answered to apply the policy, as well as commentary on interpretation of the policy. It also has a Research Library that includes military history, repatriation history, legislation and departmental instructions.
CCPS was the first application in the Australian Government to use expert technology for large-scale processing.
CCPS provides support for all aspects of claims processing:
• recording client details and registering the claim • validating the claim to verify that the legal requirements for lodging a claim have been observed, including confirming the entitlement to claim—for example, the claimant is a veteran or a dependant of a veteran • recording the details of the subject of the claim—that is, the medical conditions (disabilities or causes of death) claimed • confirming that the diagnoses of the conditions claimed meet diagnostic criteria • investigating the causes of the conditions claimed • deciding whether the conditions claimed are war-caused • assessing the rate of pension to compensate for conditions accepted as war-caused • paying the pension • notifying the claimant of the decision and the reasons for it.
CCPS produces personalised correspondence to the claimant, appointment letters for claimants and doctors, and draft reasons for a decision.
Throughout the history of the repatriation system in Australia, the question of how to determine whether a veteran’s disability or death was war-caused has been the subject of many legislative changes. During the 1980s and 1990s the law had also been subject to testing and clarification by tribunals and courts. Around the mid-1980s it was clear that not only were there inconsistencies in decision making between primary-level decision makers, but the review bodies, tribunals and courts were also adding to system inconsistency through widely varying decisions. A large part of the problem was that medical–scientific matters were being decided in an adversarial environment by lay people sitting on tribunals and courts.
In 1993 the government of the day established an independent review of the fundamentals of repatriation compensation policy. The report of the review was published in March 1994.[1] In response to the report, the government decided to make a number of major changes to the Veterans’ Entitlements Act 1986, to improve the consistency of decision making. The changes were as follows:
• Questions of medical causation were no longer to be decided by departmental officers or, if on appeal, by lawyers or laypeople. They were to be decided by an independent expert medical committee known as the Repatriation Medical Authority. • The RMA could consider only ‘sound medical–scientific evidence’. • The RMA’s decisions would be in the form of statements of principles stating exclusively what factors, when related to service, must exist to establish a causal connection between diseases, injuries or death and service. • Statements of principles were to be legally binding on decision makers, including review bodies, at all levels.
Parliament also added a review body to the SOP process by establishing the Specialist Medical Review Council to act as an appeal body from RMA decisions.
All claims lodged with the Department after 1 June 1994 were to be determined using the RMA’s statements of principles.
The RMA was established in July 1994 as an independent body of five eminent medical specialists appointed by the Minister for Veterans’ Affairs. It was to provide a forum for the resolution of medical–scientific questions at all levels of the determining system. The 1994 amendments meant that only mainstream medical opinion would be regarded as meeting the requirements to link service and medical conditions, and any alternative opinions would have to have a sound medical–scientific basis.
The RMA has now produced over 700 instruments that cover around 4500 individual disabilities and causes of death. About 95 per cent of claimed disabilities are now covered by SOPs. Only the rarer diseases and injuries are without SOPs, these claims being decided on the best evidence available.
This legislative change has brought about far greater openness and transparency in decision making and has given the ex‑service community an opportunity to have input. Importantly, it has placed the debate about complex medical questions with a body competent to deliberate on these things.
A number of initiatives were introduced in order to engender a cooperative partnership with ex-service organisations and to improve the quality of compensation claims from veterans.
A program of training for ex-service organisation practitioners was developed with veteran organisations. Training modules under the Training Information Program are developed jointly by the Department and veteran organisations and are presented by skilled practitioners from the veteran community.
Grants are also provided to ex-service organisations so they can help veterans prepare and submit pension claims to the Repatriation Commission and represent veterans in appeals against decisions by delegates of the Commission.
These programs have increased the understanding of the disability compensation system and contributed to an improvement in the claims presented to the Commission. They have also resulted in a much more cooperative relationship with the general ex-service community.
The aim of CCPS was to improve the performance and lower the cost of administering compensation claims. It was decided that CCPS should seek to provide the following:
• single-officer determinations • substantially reduced claims processing times—in many cases same-day processing was seen as achievable • greater quality and consistency in decisions • reduced costs of administering the Compensation Program—by reducing the number and classification level of staff involved and eliminating the need for departmental doctors to be involved in all claims • a capacity to incorporate future changes • an improved standard of communication with claimants.
CCPS was to have four central elements:
• ‘one-stop’ processing, so that a single claims assessor was wholly responsible for all aspects of a claim, including receipt, investigation, tracking, decision making, and any resultant payment authorisation • application of leading-edge technology to automate many of the routine tasks and provide ‘expert’ support • the statements of principles • a focus on client service supported by comprehensive training and quality assurance programs.
Development of CCPS involved a number of steps:
• detailed codification and incorporation in the knowledge base of all the SOPs, policies and rules related to the links between medical conditions and service • compilation of an electronic library of departmental legislation, delegated legislation, instructions and guidelines, and military history • links between the personal computer applications and the Department’s mainframe legacy databases • a substantial investment in new hardware and its installation • training of staff in a completely different operating system and new tools.
The deployment of CCPS was timed to coincide with, and augment, a significant business process re‑engineering exercise that included:
• new claim forms and a public relations campaign to encourage claimants to include relevant primary documents with their form • new staffing structures designed to accommodate the single‑officer processing • changes to workflows, practices and supervisory arrangements • the development of diagnostic protocols to be used by staff to reduce reliance on departmental and external medical personnel in confirming the diagnoses of claimed conditions • specification of all the questions required to be answered in order to assess the evidence in particular claims against the requirements of the law, SOPs and pension assessment guidelines.
The new system led to a major cultural change for claims processing staff. Previously, this group had been hierarchically organised, with seniority determined by expertise and a track record in adjudication. When single-officer determinations were introduced there were significant changes for staff.
With the ‘system’ containing the knowledge to assist the decision makers, it was no longer necessary to use senior officers in this process. Mid-range officers now had the necessary skills for determining claims, and one-third fewer staff members were required.
Many of the former officers were used to files and paper-based procedures. CCPS required a major program of training in PC‑based systems, which meant about 250 officers being trained in word processing and database query skills.
Claims assessors were placed in teams with departmental medical officers and their support staff. This required training of staff in how to work in teams.
The new process required claims assessors to take responsibility for a claim from receipt to payment, rather than just their own input as a part of the processing.
Introduction of CCPS required a focus on client service supported by comprehensive training and quality assurance programs. Managers became accountable for outcomes, rather than their area’s particular input to the process.
CCPS was introduced progressively in all states between March and September 1994. The project took two-and-a-half years from commencement to implementation, but at the end of that period the resultant product was substantially superior to that envisaged at the start.
Implementation required an enormous effort in human resource management to overcome the pessimism and scepticism of some affected staff, a reduction in staff numbers, and recruitment and training of new staff.
The first full year of CCPS operation was 1995–96 and performance was outstanding. The Department received a record 54 000 claims, processed a record 59 000 claims, and reduced its work holding from 16 000 to a then record low of 11 000. Today, work holdings have stabilised at around 8000 claims at any one time.
The key results are as follows:
• staffing levels reduced by at least 30 per cent • productivity improvements of about 80 per cent • the average cost to the Department for a disability pension claim down from $868 in 1991–92 to $627 in 2002–03—a significant decrease in real terms • the time taken to process claims and appeals reduced by an average of 60 per cent from 157 days to about 60 days and in some cases an hour or less • improved consistency of decisions
– before changes the range of acceptance rates across the states was around 15 percentage points – the range has averaged about 11 percentage points in the last four years
• more equitable treatment of claimants • simplified administration with the team-based approach and devolution of decision making to the lowest level • a significant reduction in appeals to review bodies
– appeal rates to the Veterans’ Review Board reduced by about 25 per cent – appeal rates from the Veterans’ Review Board to the Administrative Appeals Tribunal reduced by about 50 per cent and in 2001–02 representing only about 3 per cent of decisions completed by the Department in that year
• management information specifically tailored to management needs • more interesting and multi‑skilled jobs and staff empowered to take responsibility for investigating and deciding claims • support and acceptance by the veteran community.
In 1996 the Australian National Audit Office conducted a follow‑up to the 1993 audit. The principal finding of the follow-up was that the reforms to the Department’s processes, including the introduction of CCPS, had led to substantial improvements in the efficiency and administrative effectiveness of claims processing. The Audit Office stated, ‘CCPS has clearly brought considerable benefits to the Department and the veteran community’.
In March 1995 the Department and the Community and Public Sector Union conducted a post-implementation review of CCPS, reporting favourably on the implementation process and recommending some refinements to the system and improvements in processes and the training of staff.
In September 1996 the Department and the Union began a formal portfolio evaluation of CCPS against its original objectives. The evaluation included an updated cost–benefit analysis and concluded that CCPS had achieved all its objectives.
The Repatriation Medical Authority and the system of statements of principles were the subject of a ministerial review by an independent reviewer, Emeritus Professor Dennis Pearce of the Australian National University. Professor Pearce concluded that implementation of the regime had resulted in a more equitable system for the compensation of veterans than had existed previously.
Whilst the emergence of innovative technology can be the catalyst for change, the benefits of innovation were maximised by embarking on the change process with a broad strategic outlook. This approach incorporated a review of policy, processes, staffing structures and the needs and wishes of the client group against stated government and organisational service delivery objectives. Importantly, it also took into account and involved the range of stakeholders early in the process of exploring possibilities for improvement and in reaching the desired outcomes.
In terms of the change process itself, our experience was to establish a clear and explicit set of business requirements through a thorough business analysis process before moving to explore the technology. The business analysis was motivated by an acknowledgment that our current system was not providing an effective and efficient service. In essence, we took a ‘clean sheet’ approach and started by asking the question: In an ideal environment, how can we best process compensation claims in an efficient, fair and consistent way? Once the business requirements were established, it was possible to synergise the three primary elements of the change process—that is, the policy, the technology, and the business process re‑engineering—so that maximum benefits could be realised.
The effort required to inform, involve and manage affected staff during such a change cannot be underestimated.
The focus of jobs changed from process to people skills. It was necessary to carefully match selection and performance criteria to the new environment and provide a completely new training and support regime for those moving into the new environment. Valued competencies and behaviours moved from those traditionally associated with expertise in the subject matter to new areas of communication, client skills, team skills and willingness to accept responsibility.
Some experts felt their influence was downgraded, and many concerns were expressed about loss of expertise through transfer of knowledge to a computer system. This required careful management. The subsequent evaluations of CCPS showed that these fears were largely unfounded and that staff had more satisfying jobs through greater responsibility and providing a whole service to clients. But not all staff adapted successfully.
CCPS is a dynamic system that is regularly updated—approximately three major releases a year—to reflect new and changed statements of principles and other policy changes. There is a robust maintenance and review system involving a support team, internal users and scrutiny by ex-service organisations to ensure that the system accurately reflects law and policy.
CCPS has since been extended to support internal review (appeals) of primary decisions. Appeals lie to independent bodies—in the first instance the Veterans’ Review Board and then the Administrative Appeals Tribunal. The Department can, however, intervene in appeal cases where the evidence suggests the case should be reconsidered. At the time CCPS was implemented for primary claims in 1994, the Department rarely used its internal powers of review when a claimant appealed against a decision. This appeal system proved cumbersome for veterans, with waits of up to two years before appeals were heard by the Veterans’ Review Board.
Using the Department’s internal review powers, there is now a process whereby all decisions appealed to the Veterans’ Review Board are first reviewed internally. If the evidence is sufficient—often new evidence lodged with the appeal—the decision is reviewed using the CCPS rule base. Under this system, appeals to the Board are generally reviewed internally within 30 days of lodgment.
This change using the CCPS tool has resulted in improved service to clients, reduced costs associated with the external review process, and fewer cases going to an external Veterans’ Review Board hearing. It is another example of combining a policy or procedural change with technology to achieve a better outcome.
ELMnet is a CCPS-related computer system the Department has developed in association with SoftLaw. It is a web‑enabled product that is used to test whether a person’s service in the armed forces is eligible service for a range of departmental benefits. The system asks a series of questions and produces a report on a person’s eligibility to apply for benefits. It is used by internal decision makers but, because it is web‑enabled and available as a stand-alone system on the Department’s website, it can also be used by veterans wishing to test their eligibility for certain benefits.
It is important that suitable governance and security arrangements are adopted to ensure adherence to administrative law standards and the correctness and fairness of decisions. Monitoring arrangements need to be tailored to the jurisdiction and the client group that is subject to the decision-support system.
There are a number of internal and external mechanisms for providing assurance that CCPS is being applied correctly:
• continued scrutiny by the Australian National Audit Office, with successive reviews of the compensation process • certification under s. 52 of the Financial Management and Accountability Act 1997 and Financial Management and Accountability Regulation 6, including a strong internal testing regime to ensure accuracy of outcomes before changes to the system become operational • regular scrutiny of CCPS by contracted IT auditors • establishment of two dedicated support teams that monitor and update the operation of CCPS. One team monitors, updates and tests the rule base in conjunction with SoftLaw. The second team monitors operational and quality aspects of the overall system. Both teams consult with decision-making and policy staff and attend consultative forums with ex-service organisations on the operation of the claim and internal review processes • establishment of an effective reporting and follow-up regime for decision makers to report problems with the operation of the rule base and system • evolution of a quality assurance program that assesses the accuracy and quality of outcomes and is subject to regular evaluation and updating • establishment of a number of consultative mechanisms to gain the ex‑service community’s input on and support for the operation of CCPS and the claim and appeal process
– annual claims workshops on the operation of the claim and appeal process – a joint Operational Working Party that meets regularly to specifically examine the operation of CCPS, its rules and the claim process – making the rules, commentary, forms generated and support library available to ex-service organisations and the community through CD-ROMs and the Department’s website
• staff training programs on administrative decision making and understanding and applying administrative law principles.
It should also be noted that the external review bodies—the Veterans’ Review Board and the Administrative Appeals Tribunal—are subject to the statements of principles and their decisions and feedback also provide scrutiny of the decision-support systems that apply the SOPs.
These mechanisms have worked to improve the administration of compensation claims and to provide an effective assurance that CCPS and its outcomes:
• accurately reflect the legislation on which decisions are based • encompass administrative law standards and values • promote administrative justice and do not inappropriately narrow the discretionary powers of decision makers • provide an efficient and effective service • have the general support of relevant community organisations.
The Department considers that the changes introduced, as outlined in this paper, have successfully combined policy, business re-engineering and systems development reforms, bringing significant benefits in the delivery of disability compensation pensions to veterans.
Legislation will soon be presented to parliament to establish a new Military Compensation Scheme, with an anticipated commencement date of July 2004. This scheme will not replace the Veterans’ Entitlements Act 1986 or the Safety Rehabilitation and Compensation Act 1988 (SRCA) for injuries or diseases resulting from service before the new Act is operational. Accordingly, the new scheme will require its own system. The Department proposes to use the rule bases developed for CCPS and Defcare (SRCA), the statements of principles regime and the business re-engineering concepts that have been developed for the existing schemes.
The legislation to establish the new Military Rehabilitation and Compensation Scheme has been passed by parliament and will commence on 1 July 2004. The new scheme will provide rehabilitation and compensation cover for all service in the Australian Defence Force from this date.
Implementation of the new scheme will introduce new complexity and challenges into the Department’s compensation environment. Although incorporating key elements of the existing Safety Rehabilitation and Compensation Act and Veterans’ Entitlements Act schemes, the new scheme contains different legislative rules and differences in the detail of benefits provided. The Department will also need to retain for many years the capacity to process compensation claims under the two existing schemes, which will continue to apply for service rendered before 1 July 2004.
Development work is well under way to introduce system support for the new scheme along lines similar to CCPS, including updated rule-base decision-making support for the statements of principles as they will apply under the new scheme, as well as continuing to support the existing Veterans’ Entitlements Act scheme. This new rule base, being developed by SoftLaw, incorporates SoftLaw’s latest STATUTE Expert technology, which will support eventual web deployment and be able to integrate with new enterprise-wide application software under consideration by the Department.
The long-term aim of this development is to create a single web-based desktop environment capable of handling claims lodged under the new Military Rehabilitation and Compensation Scheme and the existing schemes, seamlessly streaming claims to arrive at the appropriate outcomes under the relevant Act(s). The existing CCPS and Defcare systems will be decommissioned over time; the new system will be based around re‑usable modules with a minimum of duplication of function and will make use of other IT initiatives under way in the Department, such as electronic document management and electronic lodgment of claims.
[∗] Deputy President, Repatriation Commission, and Deputy Secretary, Department of Veterans’ Affairs.
[1] Veterans’ Compensation Review Committee 1994, A Fair Go—report on compensation for veterans and war widows, (Professor P Baume, Chair), Australian Government Publishing Service, Canberra.
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URL: http://www.austlii.edu.au/au/journals/AdminRw/2004/5.html