In the decision of Mandamin v. Pafco Insurance Company, released on July 31, 2017, an Arbitrator at the Financial Services Commission of Ontario (“FSCO”) held that the Licence Appeal Tribunal (“LAT”) does not have the jurisdiction under s. 280(1) of the Insurance Act to hear an Arbitration that solely involves a dispute over whether or not an insured is catastrophically impaired (“CAT”).
Section 280(1) of the Insurance Act prescribes the types of disputes that may be heard at the LAT; namely, those “in respect of an insured person’s entitlement to statutory accident benefits or in respect of the amount of statutory accident benefits to which an insured person is entitled.” Since recent decisions have held that a CAT determination is a determination about a “designation” rather than a “benefit”, there must be some actual “benefit” in dispute which then gives rise for the need to make the CAT determination.
In Mandamin, the Arbitration was set to proceed solely over the issue of whether or not the insured was CAT. No other denials had been disputed as part of the Application. Notably, there was a denied treatment plan on the file; however, a) it had not been included in the FSCO/LAT Application and b) even if it had, the stated reason for the insurer’s denial was that the impairments giving rise to the proposed treatment plan were not accident-related, as opposed to a denial based upon the absence of funding due to non-CAT med-rehab limits being exhausted.
Below are some ideas for ways that insureds and their personal injury lawyers may avoid running into the same problem as the insured in Mandamin :
- Trigger a Denial Based Upon the Exhaustion of Non-CAT Med-Rehab Limits: Before submitting the LAT Application, have a health care provider submit a Treatment and Assessment Plan (OCF-18) that is likely to trigger a denial based upon the absence of funding. Seek funding for a good or treatment that the insured unequivocally needs (e.g. ongoing prescription medication); that the insurer was previously funding without issue until the non-CAT med-rehab limits exhausted; or that had been recommended by an insurer examination (“IE”) assessor.
- Trigger a Denial of Enhanced Benefits: The issue of the accessibility to enhanced benefits that only become available through a CAT designation appears to have been only tersely addressed, based upon a reading of the decision. Consider submitting an OCF-18 for case management services, an OCF-6 for mileage expenses incurred within the 50 km deductible, or a letter requesting that the insurer directly pay an agency for PSW-provided housekeeping services. All of these expenses are forms of med-rehab or housekeeping benefits that only become available with a CAT designation. It may be helpful to trigger an explicit denial of these benefits.
- Trigger a Denial of the Amount of the OCF-18: If you are concerned about being able to trigger a denial of an OCF-18 based solely upon the non-CAT med-rehab limits being denied, then trigger a denial for any reason so long as the OCF-18 incorporated the higher rates for professional services. Under the Superintendent’s Professional Services Guideline, health care professionals are restricted in what they can charge as hourly rates in an OCF-18 for services. Further, those restrictions are different (lower) for non-CAT cases than for CAT cases. Recall that s. 180(1) of the Insurance Act not only deals with the denial of benefits but the amount of the benefits, so there should be some focus on the hourly rates claimed in the OCF-18.
- Bring an Application in the Ontario Superior Court of Justice: Under the new regime, insureds can no longer sue in Court over accident “benefit” disputes. The whole point of the Mandamin decision is that since a CAT designation is not a “benefit” but rather a “designation”, its denial is not something, alone, that can be disputed at the LAT. This opens the door to disputing these CAT denials per se in the Ontario Superior Court. The Court will not be able to order the insurer to pay any benefit or money to the insured, but there may be strategic reasons why fighting the CAT denial in Court may be better and then dealing with the insurer and/or the LAT thereafter regarding individual benefit disputes.
It should be noted that this decision raises an interesting question about the limitation period for disputing a CAT denial. Typically, all denials have a two year limitation period. This decision, however, says that an insured is actually prohibited from initiating a dispute over a CAT denial unless and until some other benefit has been denied as a result of the non-CAT status. As such, there may be circumstances where this case may help insureds who, for strategic reasons, wish to hold off on disputing the CAT denial. For example, consider a case where there is an adjunct tort case. The insured may want to hold off on filing the CAT dispute, despite the denial, so as not to have to ultimately give credit to the tort Defendant. Later, once the tort case has settled, the insured could then take steps (like the ones suggested above) to trigger the denial of a benefit for funding-related reasons and then dispute that denial together with the CAT denial.