The Co-Mingling of Med/Rehab and Attendant Care Expenses: How to Get It Straight For Fair Cash-outs

Accident benefits law continues to be an area of law which is rife with complexities. One of the more complex areas within accident benefits law is the strategy and mechanics surrounding the negotiation of a full and final “cash-out” of the injured person’s entitlement to past, present and future statutory accident benefits. When the injured person and the insurer sit down and attempt to negotiate a cash-out, one issue that frequently arises is a dispute about potential intermingling between attendant care benefits and medical and rehabilitation benefits. This paper is intended to provide an overview of situations in which intermingling between attendant care benefits and medical and rehabilitation benefits can occur and to provide some methods by which adequate categorization can be made in order to ensure that any negotiated cash-out is both fair and accurate.

Statutory accident benefits are a type of no-fault disability insurance coverage that is attached to every automobile insurance policy issued in Ontario. The benefits are also codified by way of a regulation made under the Insurance Act1 The Statutory Accident Benefits Schedule2 (the “SABS”) provides that a person in Ontario, who suffers an impairment3 directly caused by the use or operation of an automobile4, is eligible to receive statutory accident benefits. The statutory accident benefits available to injured parties in Ontario are among the most comprehensive offered in any jurisdiction in North America. That is particularly true when an injured person has suffered an impairment that rises to the level of “catastrophic impairment” as defined in the SABS5. In Ontario a catastrophically impaired injured person will be eligible to receive, inter alia, a maximum of $1 Million in medical and rehabilitation benefits and $1 Million in attendant care benefits6 payable over the injured person’s lifetime7.

While not contemplated anywhere within the SABS, insurers and counsel for injured individuals have developed a system in which the injured person can “cash-out” his or her entitlement to accident benefits. In other words, the insurer provides a lump sum payment to the injured person to cover past, present and future accident benefits that the injured person would otherwise be eligible for under the SABS-8. In exchange for receipt of the lump sum payment the injured person releases the accident benefits insurer from any further obligation to pay benefits arising from the subject motor vehicle accident. The lump sum cash payment is then invested by the injured person to generate a stream of payments which will allow him or her to receive the medical, rehabilitation, attendant care and other services that are expected to be incurred in the future. The benefit to the insurer is that its exposure is capped; it can close its file and save itself the expense of having an adjuster spending time evaluating Treatment Plans and other requests for benefits made over the rest of the injured person’s lifetime.

Calculating the appropriate amount of a cash-out in a catastrophic case is an art unto itself. Generally the parties obtain an annuity costing from a structured settlement broker that establishes the cost for the injured person to purchase an annuity to fund the necessary services in the future. The parties then use that annuity costing as a starting point for cash-out negotiations. When negotiating a cash-out the goal of both parties is to ensure that the injured person receives sufficient compensation to fund the care and treatment that they would be eligible for under the SABS had they not chosen to cash-out their benefits, while at the same time providing the insurer with an appropriate reduction from the full value of the annuity costing in order to reflect future contingencies.

As mentioned above, one issue that arises frequently during the cash-out negotiation process is the accurate categorization of services which could arguably fall under medical/ rehabilitation benefits or attendant care benefits. Since there are separate pools of money available to the injured person for attendant care and medical and rehabilitation benefits under the SABS a small miscalculation when estimating the amount and categorization of the monthly benefits can result in a cash-out which creates a large deficit or windfall.

Attendant Care

The SABS provide that the accident benefits insurer will pay attendant care benefits to the injured person to cover all reasonable and necessary expenses incurred by or on behalf of the injured person as a result of the accident for (a) services provided by an aide or attendant or (b) services provided by a long-term care facility, including a nursing home, home for the aged or chronic care hospital. The monthly amount of attendant care benefits payable under the SABS is set after the injured person has filed a document known as the Assessment of Attendant Care Needs (Form 1). The catastrophic maximum per month is $6,000 and the non-catastrophic monthly maximum is $3,000-9 The Form 1 is usually completed by the occupational therapist on the file and summarizes the level of attendant care required by the injured person as a result of the automobile accident. The Form 1 addresses the need for routine personal care (e.g. dressing, feeding and mobility) and basic supervisory care (e.g. safety).

The line between attendant care and treatment can occasionally be blurry. There are times when treatment professionals are providing treatment and other times when, for various reasons, the treatment professionals are not spending their time working toward treatment goals with the injured person but are actually providing attendant care. For example, a personal support worker (“PSW”) may begin the day by providing a brain injured client with treatment by way of attempting to implement a personal support care plan under the direction of a health care professional. This time would be payable by the accident benefits insurer under the heading of a medical benefit. That same support worker can then drive the injured person to a counselling session with a social worker. The travel time to and from the appointment is payable as a rehabilitation benefit under s. 15(5) (k) of the SABS. While at the social worker’s office the PSW may wait with the brain injured client for one hour in the waiting room before the appointment can take place. That time in the waiting room is attendant care and is payable by the insurer as an attendant care benefit. It is crucial that plaintiffs’ counsel and the occupational therapist that completes the Form 1 ensure that every hour of attendant care is adequately reported and categorized correctly with the insurer. This is particularly true in catastrophic traumatic brain injury cases where the injured person requires constant supervision for their own safety due to impaired judgment. If a treatment provider such as a personal support worker is providing tasks of attendant care such as supervision, helping the injured client dress, etc. that falls into the category of attendant care. If this attendant care is done on a regular basis but not allocated as attendant care in the Form 1 a cash-out could be negotiated which provides far too little money to fund the future attendant care.

It is also important to note that if for any reason the insurer reduces the attendant care benefit during the course of the claim and the reduction is not clearly justified the injured person should dispute that reduction vigorously by filing for mediation and subsequently arbitration with the Financial Services Commission of Ontario if necessary. If the injured person simply accepts the reduction in attendant care benefits and a cash-out is later negotiated, the insurer will use the reduced amount as a ceiling on future monthly attendant care benefits and argue that the benefit will likely decrease in the future. Thus, where the injured person did not dispute the reduction in their current attendant care benefit, it is possible that the attendant care portion of the lump sum payment could be greatly reduced leading to negative financial consequences for the injured person and their family.

At the same time, many attendant care like services are provided by rehabilitation and treatment professionals and are overlooked on the Form 1. This underreporting of attendant care of even a few hundred dollars a month can be significant when the monthly benefit is projected over 25 to 35 years. Ensuring that the Form 1 accurately reflects all of the attendant care that is provided to the injured person, both by the family and the treatment team, will allow a fair and accurate cash-out of future attendant care benefits.

Medical and Rehabilitation Benefits

The statutory accident benefits in the SABS are intended to provide coverage for reasonable and necessary expenses incurred by or on behalf of the injured person for various goods and services including reasonable expenses resulting from the accident and caring for the injured person after the accident.  These include a vast array of services including medical, surgical, dental, optometric, hospital, nursing, ambulance, physiotherapy, occupational therapy, chiropractic, occupational therapy, audiometric and speech language pathology services. In addition the rehabilitation benefit  is intended to provide life skills training, family counselling, social rehabilitation counselling, financial counselling, employment counselling, vocational assessments, vocational or academic training, workplace modification and workplace devices, home modifications and home devices, vehicle modifications, transportation, and other goods and services that the person requires.

Once the Form 1 is filed and the monthly attendant care benefit is set it is important that the treatment team adequately document the treatment they are providing to the injured person. If the treatment professional does not outline the treatment/rehabilitation goals in a Treatment Plan and proceed to file regular reports with the insurer documenting how these goals are being met, they may be faced with the argument that what they are doing is actually providing attendant care and not treatment. This occurs quite often with personal support workers and rehabilitation support workers but it can also happen with occupational therapists, speech language pathologists and physiotherapists.

If there is a dual role being performed by a treatment provider, where attendant care is being provided along with treatment, it is very important that the provider, both in invoicing and in preparation of a Treatment Plan, clearly sets out the percentage of time allocated to attendant care.  On the other hand, if all of the professional’s time is spent providing treatment but the insurer may argue that the service provided was actually attendant care, it is imperative that the professional file regular reports outlining how the time spent with the client was spent in pursuit of a rehabilitation goal. Even if the treatment professional is having difficulty meeting his or her rehabilitation goal (example: the client is not participating actively in the therapy due to lack of insight) the treatment provider needs to provide regular reports to the insurer that set out how they are working towards their rehabilitation goals.  As long as there is a justifiable reason why the treatment is not terribly effective at present (e.g. the level of anxiety of a brain injured client is too high for the treatment to be effective) then the expense should be allocated by the insurer to the category of medical or rehabilitation benefits and not attendant care benefits.

Another type of treatment that can occasionally blur the line between attendant care and treatment is when a surrogate is used. For example, a speech language pathologist or physiotherapist may go in and see the client once per week and work with the client. On the remaining days in the week a personal support worker will attend with the client and ensure that they follow the plan that was implemented by the speech language pathologist or physiotherapist.  This type of treatment is done because it is too expensive to have the speech language pathologist or physiotherapist attend every day to work with the injured person.  It is important that plaintiffs’ counsel and the treatment team adequately convey to the insurer that the surrogate PSW is providing treatment and not attendant care.  The insurer will often claim that the surrogate is not qualified to provide the treatment and therefore they are actually providing attendant care.  The lesson here is to always document everything thoroughly, ensure that you anticipate these issues in advance and keep the insurer in the loop.  By keeping these benefits separate and adequately documenting every hour of attendant care and treatment that the injured person receives it will likely result in a fair cash-out that more adequately reflects the injured person’s ongoing future needs.

In many catastrophic cases the $1 Million in available medical and rehabilitation benefits will quickly be exhausted. The primary issue in cash out negotiations tends to be the amount of future attendant care that is required.  For every hour of supervisory or other attendant care services that are provided by a treatment team member and not paid for by the insurer under the heading of attendant care benefits there will be a commensurate and substantial reduction in the cash-out lump sum. It is very important that plaintiffs’ counsel work with the occupational therapist completing the Form 1 and the treatment team as a whole to ensure that adequate time is allotted on the Form 1 for the attendant care provided by various treatment providers. By following these steps it is hoped that injured parties in catastrophic cases can ensure there is little or no intermingling between attendant care benefits and medical and rehabilitation benefits so that they will receive a fair cash-out that will adequately compensate them for their future needs.

1. Statutory Accident Benefits Schedule – Accidents on or After November 1, 1996 – O. Reg. 403/96 (hereinafter “SABS”)
2. SABS, supra.
3. Impairment is defined in s. 2(1) of the SABS as “a loss or abnormality of a psychological, physiological or anatomical structure or function.”.
4. Automobile is not defined in the SABS but is defined as “a motor vehicle required under any Act to  be insured under a motor vehicle liability policy, and a vehicle prescribed by regulation to be an automobile.” in s. 224 of the Insurance Act, R.S.O. 1990, c. I.8.
5. Section 1.2 of the SABS:  For the purposes of this Regulation, a catastrophic impairment caused by an accident that occurs after September 30, 2003 is: (a) paraplegia or quadriplegia; (b) the amputation or other impairment causing the total and permanent loss of use of both arms or both legs; (c) the amputation or other impairment causing the total and permanent loss of use of one or both arms and one or both legs; (d) the total loss of vision in both eyes; (e) subject to subsection (1.4), brain impairment that, in respect of an accident, results in, (i) a score of 9 or less on the Glasgow Coma Scale, as published in Jennett, B. and Teasdale, G., Management of Head Injuries, Contemporary Neurology Series, Volume 20, F.A. Davis Company, Philadelphia, 1981, according to a test administered within a reasonable period of time after the accident by a person trained for that purpose, or (ii) a score of 2 (vegetative) or 3 (severe disability) on the Glasgow Outcome Scale, as published in Jennett, B. and Bond, M., Assessment of Outcome After Severe Brain Damage, Lancet i:480, 1975, according to a test administered more than six months after the accident by a person trained for that purpose; (f) subject to subsections (1.4), (2.1) and (3), an impairment or combination of impairments that, in accordance with the American Medical Association’s Guides to the Evaluation of Permanent Impairment, 4th edition, 1993, results in 55 per cent or more impairment of the whole person; or (g) subject to subsections (1.4), (2.1) and (3), an impairment that, in accordance with the American Medical Association’s Guides to the Evaluation of Permanent Impairment, 4th edition, 1993, results in a class 4 impairment (marked impairment) or class 5 impairment (extreme impairment) due to mental or behavioural disorder. O. Reg. 281/03, s. 1 (5).
6. Maximum monthly attendant care benefit in catastrophic cases is $6,000.00 per month.
7. This assumes that no optional benefits have been purchased and that the catastrophically impaired person meets all of the eligibility tests and procedural requirements set out in the SABS.
8. This generally cannot be done for the first year following the accident- O.Reg. 275/03
9. Assuming that no optional benefits have been purchased this amount is payable up to a maximum of 104 weeks after the accident occurs or $72,000

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