Financial Services Commission of Ontario
Neutral Citation: 2000 ONFSCDRS 157 Appeal: P99-00013
OFFICE OF THE DIRECTOR OF ARBITRATIONS
Angelo Tsimidis, Appellant and Liberty Mutual Insurance Company, Respondent
Before: Stewart M. McMahon, Director’s Delegate
Representative: Roland Spiegal (for Mr. Tsimidis) Counsel: David G. Lavkulik (for Liberty)
APPEAL ORDER
Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
- The appeal is allowed. Paragraph 1 of the arbitration order dated January 6, 1999 is rescinded and the following order is substituted:
Liberty Mutual Insurance Company shall pay $1,275, with respect to the account rendered by B.I.M., plus interest at the rate of 2 percent per month, compounded monthly, from September 7, 1997.
- Mr. Tsimidis is entitled to his expenses of the appeal
August 28, 2000
Stewart M. McMahon Director’s Delegate
REASONS FOR DECISION
I. NATURE OF THE APPEAL
Mr. Tsimidis was referred by his family doctor to Back In Motion Diagnostic Services (“B.I.M.”) for a functional capacity evaluation and a surface electromyograph. The account for the assessment was sent to the Insurer with a request that it be paid in accordance with s. 24 of the SABS-19961 which requires the insurer to pay for reasonable expenses related to examinations undertaken for “the purpose of this Regulation.”
Liberty Mutual Insurance Company (“Liberty”) initially denied the benefit on the grounds that it had not requested the assessment. At arbitration, Liberty defended the claim on the following basis.
- the expenses were not incurred “for the purpose of this Regulation” as required by s. 24(1);
- no treatment plan was submitted as required by s. 38;
- the diagnostic tests were experimental in nature and hence excluded by s. 14(3);
- the expenses were not: reasonable, necessary, or required because of the accident, and did not significantly benefit the insured person;
- the services provided were of inferior quality, and therefore the account should be discounted.
The arbitrator rejected the first four of Liberty’s arguments. Liberty has not appealed these determinations.
However, the arbitrator found that the quality and value of the assessments and report, justified a 50% reduction in the fee. Mr. Tsimidis appeals this ruling, seeking an order requiring Liberty to pay the full amount of B.I.M.’s account.
II. BACKGROUND and REVIEW OF THE ARBITRATOR’S REASONS
Mr. Tsimidis was injured in a motor vehicle accident on February 3, 1997. Dr. Bergman became his family doctor a couple of months later. Dr. Bergman had some concerns about the nature of Mr. Tsimidis’s treatment and arranged for various assessments prior to submitting a treatment plan to Liberty. One of the referrals was to B.I.M., a clinic owned and operated by Mr. Taverniti, a chiropractor. Dr. Bergman asked B.I.M. to conduct a functional capacity evaluation (“FCE”) and a surface electromoyograph (“SEMG”).
Before any physical testing was done, Mr. Tsimidis was interviewed and asked to fill out a number of questionnaires dealing with the history of the accident, his treatment to date, and the impact of his injuries on his activities of daily living. For present purposes, the most important questionnaire dealt with Mr. Tsimidis’s employment. One of the questions asked him to describe the physical demands of his work. Mr. Tsimidis reported that he was required to lift a 200 pound engine four or five times a day.
A few months before the B.I.M. assessment, Liberty had arranged for Mr. Scott, an employee of Canadian Rehabilitation Institute (CRI), to meet with Mr. Tsimidis at his place of employment, and to review the physical demands of his work. Mr. Scott reported that the heaviest object Mr. Tsimidis had to lift was a 120 pound engine, and that this was done by two men, not one.
After reviewing the evidence, the arbitrator found that Mr. Scott’s version was correct, and that Mr. Tsimidis had given B.I.M. an exaggerated estimate of the lifting requirements of his job. The arbitrator ultimately found that the mistake concerning Mr. Tsimidis’s lifting demands “severely undermines the value of [B.I.M.’s] report.” In this context, the arbitrator is employing “value” in reference to the usefulness of the assessment as a measure of Mr. Tsimidis’s ability to perform the essential tasks of his employment. It is essentially a comment on the value of the opinion.
The arbitrator discounted the FCE portion of B.I.M.’s account by 50%, based upon her finding concerning the value of the report.
The arbitrator also questioned the value of the portion of the report dealing with the SEMG testing. She stated “I find the value of Dr. Taverniti’s report on the results of the surface EMG study questionable in light of his failure to explain what the surface EMG actually measures and in light of his failure to explain the significance of the results.” The arbitrator noted that Mr. Taverniti provided some explanation of the significance of the results when he testified, but she underscored that this information was not available within the report itself. She also stated that she found it “significant that Dr. Bergman, who requested the surface EMG study, did not testify why he requested it, or how he found it useful in preparing his treatment plan.”
The arbitrator reduced this portion of the account by 50%, resulting in a total reduction of the account by 50%.
III. ARGUMENT AND ANALYSIS
It is helpful to start by setting out the relevant portions of s.24:
- (1) The insurer shall pay for all reasonable expenses incurred by or on behalf of an insured person for the purpose of this Regulation in obtaining and attending an examination or assessment or in obtaining a certificate, report or treatment plan, including,
(a) fees charged by a person who conducts an examination or assessment or provides a certificate report or treatment plan;
Both parties agreed that an insurer is only responsible for assessment fees if the decision to undertake the assessment was reasonable, and that the arbitrator must review the circumstances and satisfy herself on this matter before going further. In this instance Liberty conceded that the referral was reasonable.
Mr. Tsimidis argued that if the arbitrator is satisfied that the referral was reasonable, it is inappropriate for her to assess the value of the report and there can be no justification for reducing the fee. I reject this submission. The insurer’s obligation to pay for s. 24 assessment expenses is modified by the word “reasonable.” The drafter’s use of the modifier makes it clear that the arbitrator must assess the quality or value of the assessment and report. A simple, but absurd example illustrates the point. If an assessor spends two minutes with a patient, does no physical examination and thereafter prepares a five line report for which he charges $1,000, there can be no sensible outcome other than a finding that it is not a “reasonable expense.”
As I will discuss in more detail shortly, 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.
This is the first case to consider a s. 24 assessment expense and, accordingly the arbitrator had to look elsewhere for assistance in her deliberations. She quite correctly looked at the way assessment expenses were dealt with in the previous regimes.
The first of the three “no-fault” schemes - SABS-1990 - contained no real equivalent to s. 24. Applicants were forced to seek compensation for the fees charged by assessors as expenses of the arbitration process, or as a benefit payable pursuant to sub-s 6(1)(f), the catch-all provision of the medical and rehabilitation section.
Section 57 of the second “no-fault” scheme - SABS-1994 - is similar to s. 24, but counsel generally continued to claim assessment expenses as a medical or rehabilitation expense pursuant to s. 36(1)(h) and s. 40(5)(e), or as an arbitration expense, and with one important exception there is no jurisprudence considering s. 57.
The medical and rehabilitation benefit provisions in both SABS-1990 and SABS-1994 stipulate that the insurer is responsible for “reasonable” expenses or measures. Section 57 of SABS-1994 refers to the insurers obligation to pay “reasonable expenses.” The assessment of arbitration expenses has always proceeded on the basis that only “reasonable” expenses are payable. Accordingly, it is not surprising that the jurisprudence considering the cost of assessments and reports under any of these heads has included an evaluation of the quality and value of the assessment or report. The arbitrator followed this jurisprudence and concluded that the quality of the report is an appropriate factor to consider.
The arbitrator cites two decisions that bear discussion. The first is the arbitral decision in Salvaggio and Simcoe & Erie General Insurance Company and Wellington Insurance Company, (OIC A96-000978, October, 15, 1997), which considered s. 57 of SABS-1994. Mr. Salvaggio was referred to a psychologist for a psycho-vocational assessment. After eight hours of testing and interviews, the psychologist prepared a report listing a number of occupations that Mr. Salvaggio was fit for, and another set that he could train for if his emotional status improved. The psychologist charged $1,670 for his services. The arbitrator found that the report offered the applicant little insight into things he did not already know. The arbitrator discounted the claim and allowed only $400. He commented negatively on the process suggesting that the exercise could have been completed in a couple of hours, but it would appear that the principle justification for discounting the fee was the marginal value of the ultimate opinion.
The focus on the quality of the opinion, is even more pronounced in Owusu and Prempeh and Allstate Insurance Company of Canada, (FSCO A97-000788, September 30, 1998). In that case, the two applicants claimed to have been injured in a motor vehicle accident. After the alleged accident, the applicants were referred to various doctors and a chiropractor for assessments and treatment. During the hearing the applicants relied upon the testimony of the chiropractor and the reports of two of the doctors, in support of their claims for weekly benefits. In dismissing these claims, the arbitrator discounted the evidence of all three practitioners, principally on the grounds that the information supplied to them by the claimants was unreliable. As part of the arbitration, the claimants also sought payment of the chiropractor’s assessment fees and the cost of the reports prepared by the two physicians. All three claims were dismissed. Underlying the arbitrator’s reasoning was the minimal weight she attached to the opinions of the authors.
When the arbitrator in the present case assessed the reasonableness of the costs associated with the FCE portion of the testing, she followed Salvaggio and Owusu, and focused principally on the value of the opinion. As noted above, because the assessor had an incorrect understanding of the weights Mr. Tsimidis’s had to lift, she found the report of limited value in assessing his ability to complete the essential tasks of his employment. She stated; “Without this information, Dr. Taverniti’s conclusions about Mr. Tsimidis’s restrictions and deficits is of limited value.”
Unfortunately, when the arbitrator assessed this expense, she did not have the benefit of the appeal decision in Salvaggio and Simcoe & Erie General Insurance Company and Wellington Insurance Company (FSCO P97-00062, January 21, 1999) which was released a couple of weeks after her decision. Director’s Delegate Naylor reversed the arbitration order in Salvaggio, and ordered the insurer to pay the full amount of the psychologist’s account, noting that the arbitrator “may have been overly influenced by his view of the value of the end-result, without giving sufficient consideration to whether the assessment was a reasonable measure in the circumstances at the time it was arranged.” The delegate’s reference to value in the sense of the “end-result” is synonymous with my reference to value in the sense of its ultimate usefulness in assessing the applicant’s condition.
In this part of her reasons, the delegate was focusing on the preliminary question; was it reasonable to refer the applicant for the assessment? Later in her reasons, when dealing with the amount of the account, the delegate again questioned the focus on value, in the sense of the usefulness of the opinion and contrasted it with value in the sense of the time that went into the assessment and its cost relative to similar assessments. She stated:
the fact that the conclusions Dr. Lacroix reached were not particularly helpful is a factor to take into account, but the reasonableness of the expense should not be judged solely with the benefit of hindsight. There is no evidence or suggestion that the duration of the assessment, or the amount charged for it, was out-of-line with similar assessments, or the charge was otherwise unreasonable. Given the evidence, there is insufficient reason to deprive Mr. Salvaggio of the full cost of the assessment.
There is a natural correlation between value in the sense of the ultimate usefulness of the report or correctness of the opinion, and value in the sense of the time, care, and expertise, that went into the process. A discussion of value in one sense will inevitably involve a discussion of value in the other sense. This can be seen in the arbitration decisions in both Salvaggio and Owusu. However, it does not inevitably follow that because the opinion is suspect, that the assessment was done hurriedly, sloppily or by ill-qualified individuals.
When the arbitrator is scrutinizing a report in the context of a demand for weekly or medical and rehabilitation benefits, she is assessing its usefulness in determining the individual’s entitlement to benefits. The quality of the process is only significant to the extent that it assists the trier of fact determine how much weight should be given to the opinion. Conversely, when the arbitrator is scrutinizing the report in the context of a demand for payment of the assessor’s account, the opposite is true. The arbitrator should be primarily concerned with the process. The correctness of the opinion is principally important to the extent that it sheds light on whether sufficient time, care, and expertise, went into the conduct of the assessment and preparation of the report.
The arbitrator stated that an FCE cannot be done in a vacuum, and that the assessor must relate the findings to the individual’s job requirements. The arbitrator found that Dr. Bergman had a copy of the work site evaluation done by CRI in his file when he made the referral to B.I.M. She also found that it was a mistake for Dr. Bergman not to forward the work-site report. I agree with all these comments. However, Dr. Bergman had referred many patients to B.I.M. for testing, and
Mr. Taverniti testified that before any testing is done, he usually meets with the patient to review his job demands. Accordingly, it is a fair presumption that Dr. Bergman knew that B.I.M. would review the job demands with Mr. Tsimidis, and that the FCE report would be based upon this information. His failure to forward on the job-site report deprived B.I.M. of the opportunity to verify Mr. Tsimidis’s oral account, and undermined the value of the opinion, but I am not convinced that it justifies the insurer’s argument that it should not have to pay for the assessment.
Nor, reviewing the matter from the perspective of B.I.M.’s conduct, do I believe that it was unreasonable for the assessor to have conducted the FCE solely on the basis of an oral history of Mr. Tsimidis’s job demands. Assessors routinely provide opinions regarding an individual’s work capacity based on the patients recounting of his job demands. Opinions based upon such a history, plus job-site reports, or job descriptions provided by the employer or union, may be more compelling, but I am not satisfied that conducting the FCE without such reports was unreasonable.
Was the fee reasonable in light of the time, care and expertise that went into the conduct of the assessment, and the preparation of the report?
Mr. Taverniti and the kinesiologist who conducted the FCE testified. As reported by the arbitrator, the assessment involved taking an oral history and the completion of questionaries regarding Mr. Tsimidis’s accident, his complaints and treatment, and his work functions. Mr. Taverniti conducted the SEMG and the kinesiologist conducted the FCE using an ARCON system. The assessment lasted about four hours. The report is approximately 35 pages, though it should be noted that much of it is standardized paragraphs reproduced by the computerized testing equipment. Mr. Taverniti is an experienced chiropractor qualified to conduct the SEMG and analyse the results of the ARCON testing. The kinesiologist was relatively inexperienced, but she was qualified to conduct the ARCON testing. The fees charged were within the guidelines set out by the Ontario Chiropractic Association.
The witnesses were cross-examined on these elements, but their evidence was not seriously eroded, nor did the Insurer call any viva voce evidence that challenged the veracity of this evidence. The principle focus of the insurer’s submissions was to compare the report prepared by B.I.M. with the two insurer medical examination (“IME”) reports requested by Liberty. The first was done by AssessMed at about the same time as the B.I.M. assessment. The second was done by North York Rehabilitation Centre Inc. (“North York”) approximately a year later.
Liberty held these two reports out as examples of what a reasonable assessment and report would entail. To paraphrase Liberty’s counsel; when an insurer pays for a report this (the IMEs) is what it expects to get, and given that Liberty was being asked to pay for the assessment, they were entitled to expect a report they could make use of. Counsel’s submission reveals the same misunderstanding of the purpose of this report and the insurer’s obligations pursuant to s. 24 as underlies Liberty’s initial refusal to pay for the assessment because they did not order it.
Some of the expenses contemplated by s. 24 relate to reports requested by the Insurer such as certificates and treatment plans, but many of the assessments will be requested by the insured person or his advisors. In a case such as this one where the report was prepared at the request of a family doctor to assist him in the management of his patient, the question of its reasonableness does not turn on whether or not it is useful or even comprehensible to the insurer. Provided that it was appropriate for the family doctor to order the report, and the expenses associated with the report are reasonable, the insurer is bound to pay the fee irrespective of its usefulness to the insurer.
Liberty’s submission also underscores the danger in comparing too closely an IME and a s. 24 assessment. If the same type of testing is being done, there is obvious merit in comparing the assessment procedures and reports, but the respective audiences and purposes may be different, and this should not be overlooked.
I can see little value in comparing the “work capacity evaluation” prepared by AssessMed with the B.I.M. assessment.
The AssessMed account was $2,153.95 compared to the B.I.M. account of $1,275. This is not surprising, as the AssessMed assessment contained elements not found in the B.I.M. assessment. Notably, the AssessMed team included an orthopaedic surgeon who conducted a review of the medical file, and undertook a physical examination, and authored the final report.
The Insurer emphasized the extensive file review undertaken by the orthopaedic surgeon, and contrasted it with the minimal file review undertaken by B.I.M.. Liberty’s submission that B.I.M.’s assessment should have contained a similar review does not strike me as self-evident. First, the AssessMed report was prepared by a physician qualified to conduct a review of the medical records. It would be unrealistic to expect a chiropractor to undertake such a task. Second, the AssessMed report was prepared for Liberty’s adjuster who probably needed such a file review. In contrast, the B.I.M. assessment was undertaken for the family doctor who would not need such a review.
The additional elements found in the AssessMed report might ultimately make its author’s opinions more compelling at an arbitration hearing, but it would be unfair to expect the B.I.M. assessment to contain all the same elements at 60% of the price, when it is not obvious that the additional elements were needed by the family doctor who was the intended audience. To my mind, little can be gained by comparing the two.
The utility of a comparison to the North York IME is more obvious. The scope of the North York assessment was broader. In addition to the FCE, it also included assessments by an orthopaedic surgeon and a psychiatrist. However, unlike the AssessMed report, the North York report contains separate sections authored by the various assessors. This makes it easier to compare the FCE portion of the IME to the FCE done by B.I.M. In addition, the account is broken down. The total account is $3,300.95, but the FCE component is only $925, which is comparable to the fee charged by B.I.M. However, care must be taken not to draw the comparisons too closely. For example, the North York testing included an O.T. assessment. Conversely, the B.I.M. assessment did not include an O.T. assessment, but did include SEMG testing. In addition, the two reports are quite different. The North York report contains more narrative and commentary that may make it more useful to someone not familiar with the testing procedures or test data. In contrast, the B.I.M. report reproduces more of the raw data, which might make it more difficult to digest, but may make it more useful if it were being compared to later testing.
Comparing the two reports I am unable to say that it is apparent that the testing done by B.I.M. was deficient in any significant way. Nor am I satisfied that the North York report is compelling evidence to rebut the viva voce evidence of Mr. Taverniti and the kinesiologist, that the testing was done carefully and in accordance with normal protocols.
I would allow the portion of the account that deals with the FCE in full.
Finally, the Insurer attacked the reasonableness of the portion of the report dealing with the SEMG, arguing that the report offered little explanation of the significance of the test results.
This issue again raises the question of who the report is for. In this case, it was for the benefit of Dr. Bergman. The appropriate question is; did the report contain sufficient information to make it useful to him? However, it is fair to say that if the insurer challenges the value of a particular test, the assessors must explain to the trier of fact the purpose of the testing and the significance of the results. If they cannot, they run the risk of a finding that there simply was no value in conducting the assessment, and hence it was not a reasonable expense.
The Insurer relied on evidence from Mr. Taverniti that in the past the referring doctors, including Dr. Bergman, would routinely call him up for explanations after they had received his reports. Liberty argued persuasively that this suggested the reports were not adequate for the intended audience.
However, Mr. Taverniti also testified that this was more of a problem in the past, and that as his usual referral sources have become more familiar with his testing and reports, he has received fewer follow up calls. More importantly, Mr. Taverniti did provide some rudimentary explanation during the hearing, regarding the purpose of the testing and the significance of the results, and Dr. Bergman testified that he found the report useful. This evidence was not seriously undermined on cross-examination. I am satisfied that the Applicant has met the onus of establishing that the SEMG portion of the assessment and the corresponding portion of the report were reasonable. I recognize that the evidence concerning the SEMG was minimal, but I am mindful of the fact that the amount was only $475 and that during the hearing, both counsel focused primarily on the FCE portion of the assessment., and at times, the SEMG was simply treated as part of the FCE.
III. CONCLUSION
In conclusion, I am satisfied that when the focus of the inquiry emphasizes the process over the value of the ultimate opinion, the proper disposition is a finding that the assessment expenses were reasonable. Accordingly the appeal is allowed, and the arbitration order is rescinded and replaced with an order that the Insurer pay the full amount of the account plus interest on the outstanding amounts
IV APPEAL EXPENSES
Mr. Tsimidis’s appeal was successful. He is entitled to his reasonable expenses
August 28, 2000
Stewart M. McMahon Director’s Delegate