Insurance agents working for WorkSafe were "gaming the system" for financial incentives by unfairly denying payments to injured workers, Victoria's Ombudsman has found.
The workers' compensation system had "failed some particularly vulnerable people", Ombudsman Deborah Glass wrote in the report tabled on Monday.
WorkSafe outsources claims management to five private insurance agents.
While the overall system is not broken, Ms Glass found when it came to complex cases, all five agents engaged in "unreasonable decision making".
"In a number of cases we saw you have, in effect, people being injured again by the system," Ms Glass told AAP.
The system uses financial rewards and penalties to drive agent performance.
The investigation found:
* Emails by agent management encouraging staff to 'do everything they could' to stop claims exceeding termination time frames and monetary rewards to staff who terminated the highest number of claims
* In some cases employers improperly influenced agent decision making
* Examiners were engaged in doctor shopping to support rejecting a claim; and
* Providing inadequate review process
There was "some compelling evidence of agents gaming the system" Ms Glass wrote in the report.
In accepting all of Ms Glass' recommendations, the Victorian government says it is unacceptable injured workers seeking compensation have not been getting the support and respect they deserve.
WorkSafe has begun addressing criticism from the report, which uncovered "instances of conduct which were totally unacceptable", chief executive Clare Amies said in a statement.
