V401 – The Insurer “Shall” Pay Catastrophic Assessments
There have been several decisions over the years that have dealt with catastrophic impairment and costs of catastrophic assessments. Here are just a few highlights:
– As was stated in Bains and RBC General Insurance Company, (FSCO P09-00005, June 3, 2010): “A finding of catastrophic impairment, by itself, provides no compensation to an insured person. It simply opens the door to a higher threshold of possible benefit entitlement”.
– In Cook and RBC (Appeal Order P14-00038, May 4, 2015), Director’s Delegate Blackman confirmed that the fee or expense associated with a catastrophic assessment is in regard to a threshold determination and not in any connection with any benefit or payment.
– Henderson and Wawanesa (FSCO A14-001758, July 9, 2015) also considered the costs of the catastrophic assessment. Arbitrator Bowles recognized that the expense of a catastrophic assessment is not an application for a benefit; he recognized catastrophic assessment as being a procedure used to access the next tier of benefits. He concluded that the medical and rehabilitation coverage limit, as set out in section 18 of the SABS, is therefore not applicable to the funding of catastrophic assessments. He stated that there is quite simply a right to apply to the insurer for a determination of catastrophic impairment and that, pursuant to s.25, the insurer “shall pay” the “reasonable fees” charged for the catastrophic assessment. He confirmed that each assessor could charge up to $2,000 for their respective reports and that there was also obligation for the insurer to pay $200 for the cost of the treatment plan, $200 for the cost of the catastrophic application, and HST on all fees as relevant.
Now, we fast-forward to present. There have been relatively few published decisions from the Licence Appeals Tribunal as dealing with catastrophic impairment or related assessments. We recognize that the LAT is not bound by past decisions and we are, as an industry, curious and concerned as to whether past well-recognized precedents, such as those above, will be upheld.
Of interest to this discussion is the LAT’s recently published decision of 17-003496, Applicant and TD Insurance. Adjudicator Chris Sewrattan was asked to decide whether the applicant was entitled to receive payment for a multi-disciplinary catastrophic impairment assessment. The assessment had been requested by way of a treatment plan. Upon receipt of the plan, TD Insurance denied the request and gave notice of requirement for the applicant to attend at a multi-disciplinary insurer examination. Based on the results of its examination, which yielded a whole person impairment rating of 0%, TD maintained the denial of the assessment. The applicant then submitted a new treatment plan requesting a catastrophic rebuttal assessment. This plan was also denied.
The facts of this case are intriguing. The applicant, a young man in his early 20’s, had become unwell before the December 2012 accident; he had been hospitalized after presenting with psychosis with differential diagnosis between manic episode and schizophreniform disorder in October 2012. TD obtained opinions from two psychiatrists who independently concluded the applicant’s condition was not accident related. Both doctors noted that adults between the ages of 18 and 22 are vulnerable to the spontaneous presentation of schizoaffective disorder.
TD maintained minor injury coverage limits of $3,500 on the claim. In the course of the claim, TD obtained 13 medical assessments and the applicant obtained none.
The applicant argued that the catastrophic assessment was a substantive right and that the plain wording of s.25 of the SABS suggests that TD must pay for any reasonable fee charged for a catastrophic impairment assessment. This argument falls in line with the Henderson decision as detailed above.
In contrast, TD argued that the catastrophic assessment was a qualified right and that each of the multi-disciplinary assessments proposed must be reasonable and necessary. TD argued that the catastrophic impairment assessment was not reasonable at large. It noted a lack of evidence supporting any ongoing injuries or impairments caused by the accident and highlighted the absence of evidence to suggest a link between the accident and the causation of the applicant’s psychiatric condition.
The Adjudicator opted to not reconcile the substantive versus qualified debate but instead chose to analyze whether it was reasonably possible that the applicant is catastrophically impaired. He further addressed whether it is reasonable and necessary for the applicant to explore the possibility that he is catastrophically impaired. In so considering, he stated:
“There is a reasonable possibility that the applicant is catastrophically impaired. He has a serious psychiatric condition such that he is required to have a litigation guardian. The biggest question against the existence of a reasonable possibility is causation. The applicant’s psychiatric issues precede the accident, and the applicant has a history of not complying with his medication requirements. As well, there is no real evidence of a physical injury caused by the accident. Notwithstanding these issues, which I acknowledge are significant, there remains a reasonable possibility that the applicant is catastrophically impaired. The threshold is low: possibilities versus probabilities… A different question is whether it is probable that the applicant is catastrophically impaired. And that is a question that does not require an answer when considering entitlement to payment for an assessment”.
Given the possibility of catastrophic impairment, Adjudicator Sewrattin ultimately decided that the applicant was entitled to payment for a catastrophic assessment. In coming to this conclusion, he reflected that the applicant ought to be afforded the opportunity to explore the question of causation with assessors of his own choosing; such an assessment would be more robust and would rebut the insurer examination. He spoke also to procedural fairness and highlighted the claim history with imbalance of insurer examination versus applicant selected assessment. In the end, he confirmed six of the requested assessments as being reasonable. As would be anticipated, each assessment was limited to a cost not to exceed the $2,000 assessment fee cap, plus HST.
What is absent in this decision is any mention of, or reliance upon, past relevant cases. While we recognize the outcome as being appropriate in the context of the “shall pay” provision of Section 25 of the Statutory Accident Benefits Schedule, it appears this was not the focus of the decision. The Adjudicator’s arrival at his decision is unusual in its analysis when compared to past disputes. Nonetheless, we are hopeful that insurers will continue to recognize their liability to pay catastrophic impairment assessment costs, at their expense, on the “shall pay” basis as outlined in s.25 of the SABS.
17-003496, Applicant and TD Insurance
FSCO A14-001758, Henderson and Wawanesa