In this issue, we summarize recent decisions under Section 24 of the current legislation. This remains a complex and confusing area for most involved and we welcome your inquiries at any time.
Tsimidis v Liberty Mutual Insurance Company(FSCO A98-00038, Appeal P99-00013)
Issue: payment of functional capacity evaluation and surface EMG
Result: at arbitration, the arbitrator ordered partial payment. On appeal, the Director Delegate ordered full payment
Director Delegate McMahon provides:
“The real question is what aspects of the assessment and report ought to be scrutinized. Should the emphasis be on the usefulness of the ultimate opinion, or should it be on the process; by which I mean the amount of time, care and expertise that went into the conduct of the assessment and the preparation of the report? To my mind, the emphasis must be on the latter”.
The correctness of the ultimate opinion does not govern the obligation to pay for the cost of the report. Rather, payment should be made where there has been a reasonable expenditure of time, care and expertise so as to make the report useful.
Sivanesan v CIBC (FSCO A99-000872)
Issue: payment of the report costs of a physiatrist, an orthopaedic surgeon, a psychologist and an FCE
Result: payment in full
The assessments at issue all took place prior to the application for arbitration having been filed. Consequently, the reports “cannot be characterized as medical/legal reports”.
The insured is entitled to her own reasonable assessments. The fact that they were requested with a view to making a claim, or in the course of or in anticipation of a dispute with regard to entitlement, does not take them outside of Section 24. The fact that the reports may be useful in a tort context is irrelevant. The critical issue is whether or not the expenses are reasonable, and the examinations or assessments were taken for the purpose of determining entitlement under the SABS.
Aleman v State Farm (FSCO A00-000498, Appeal P01-00014)
Issue: payment of an in-home assessment
Result: no payment
Under Section 24, there are two limitations:
- the expense must be reasonable;
- for the report, certificate, examination and/or assessment to be payable, the expenses must be incurred for the purposes of determining entitlement pursuant to the SABS.
“The insured failed to adduce sufficient evidence to establish a link between the assessment and her claim for benefits”.
Tesfai v Allstate Insurance Company of Canada (FSCO A99-000321, Appeal P00-00048)
Issue: payment of a multi-disciplinary assessment
Result: partial payment
That portion of the assessment that related to an orthopaedic examination was denied. The denial was based upon the following findings of fact:
- At the time of the referral to the multi-disciplinary assessment centre, the family doctor had received minimal information from the treating orthopaedic surgeon;
- The insurer had received a report from the treating orthopaedic surgeon and there was no evidence led by the insured to suggest any deficiencies in the treating surgeon’s report or treatment.
The real problem was that the arbitrator received very little evidence about the family doctor’s reasons for making a referral for a further orthopaedic assessment.
MD v Halifax Insurance Company Site Arbitration Decision
(FSCO A99-000321, Appeal P00-00048)
Issue: payment for a multi-disciplinary assessment
Section 24 does not provide to the insured an unfettered right to obtain her own medical assessment, at the insurer’s cost (including a second opinion to challenge an unfavourable DAC assessment). In the appeal, Director of Arbitrations Draper provides:
“The DAC report is just not another opinion. Although either party can challenge it through the dispute resolution system, the DAC’s conclusions govern the payment of benefits in the meantime…an assessment arranged for the purpose of challenging the DAC through the dispute resolution process is better viewed as a litigation expense, recoverable through negotiation or as arbitration or court cost.”
I believe this case to be fact specific. Respectfully, it is incorrect to state that a DAC’s conclusion governs the payment of benefits pending resolution. In fact, arbitration authority has found insurers liable for a special award if they unreasonably rely upon the findings of an unreasonable DAC. In this particular case, the physician who requested the referral to the multi-disciplinary assessment centre testified that he had never heard of this facility, nor would he have made the referral had he known the centre only conducted assessments (as opposed to treatment). Even though the conclusions of the assessment centre found the insured unable to return to her pre-accident occupation, the insured did not challenge the insurer’s decision to terminate her entitlement to income replacement benefits. The arbitrator also found that the reports generated were not useful.
Khan v Allstate Insurance Company of Canada (FSCO A98-001157)
Issue: payment for an occupational therapy report
Result: full payment
An occupational therapy assessment was undertaken at the request of the insured’s representative. Notwithstanding the fact that the arbitrator found a conflict of interest as between the assessment facility and the representative of the insured, such a finding was irrelevant insofar as the issue of payment for the report was concerned. Although this “relationship” may impact upon the value of the opinion expressed, the cost of the report as claimed was reasonable, as was the need for the assessment.
Tanzo v State Farm (FSCO A99-000711, Appeal pending)
Issue: payment of a multi-disciplinary assessment
Result: the cost of the orthopaedic assessment was paid and the cost of an FAE was not
In this matter, the arbitrator focused upon the evidence of the referral source, the treating family physician. The physician indicated that the referral was reasonable because the DAC assessors failed to take into account any of the subjective complaints made by his patient. He testified that the reason for making the referral was to assist and to help him decide on a further course of treatment. In the circumstances, the arbitrator held that the orthopaedic aspect of the assessment was appropriate. Conversely, the arbitrator did not award payment for the FAE. No evidence was led regarding the difference between an ARCON assessment and the standard FAE utilized by the DAC facility. In view of this, and the fact that the family physician had requested the FAE to be conducted prior to receiving or reviewing the DAC report, the expense was determined to be unreasonable.
Nunes v St. Paul Fire and Marine Insurance Company (FSCO A00-000501, Appeal pending)
Issue: payment for five health care assessments and reports
This is another fact specific case where the arbitrator found that the insured had not complained to her family doctor about her accident related injuries after September of 1998. Despite this finding, and after having retained counsel in August of 1999, five subsequent assessments were undertaken. The arbitrator confirmed that there is no automatic right to request assessments, at the expense of the insurer, but rather, the assessments must be reasonable. The arbitrator concluded:
“I find that at the time Ms. Nunes underwent these assessments, they were not intended to establish a useful treatment plan, were not useful for her rehabilitation and were not otherwise useful in respect of some income replacement benefits or any other potential claim for accident benefits.”
Smith v Citadel General Insurance Company (FSCO A00-000984, appeal pending)
Issue: payment for an in-home and work site assessment
The first question is whether the assessments were for the purpose of the regulation. If they were, the next question is whether the expenses were reasonable. Whether the expense is reasonable involves two tests. Was it reasonable to refer her for assessment, and if so, was the cost of those assessments reasonable.
In this matter, the insurer had conducted previous assessments. The arbitrator concluded that he had heard no evidence to persuade him that the initial recommendations were inadequate or that the Section 24 assessments were any better than those initially performed. He heard no evidence that any one had any concern that the insured had medical problems or rehabilitation needs that were not being addressed. Accordingly, he could not determine the “use” of the Section 24 reports. As such, the reports were deemed unreasonable.
With the utmost respect to the arbitrator, his findings utilized the benefit of hindsight. How can the insured assess the reasonableness of the recommendations contained within an IME without professional consultation. From a review of the above, one should be aware of the following:
- there is not an automatic right to recover payment for all assessments;
- a report must contain sufficient information so as to make it useful;
- the fact that a report may be useful for another purpose (i.e. a tort claim) is irrelevant;
- the insured is entitled to seek independent medical advice with regard to her needs (however, if a report is requested, subsequent to a DAC, be careful to address the deficiencies contained within the DAC report and why the DAC findings are inaccurate and/or incomplete);
- there must be a link between the report and the insured’s entitlement to benefits.;
- the cost of the report must be reasonable.