Neutral Citation: 2001 ONFSCDRS 29

FSCO A00–000498

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

ALBA ALEMAN

Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

Insurer

REASONS FOR DECISION

Before:

K. Maine Palmer

Heard:

February 6, 7, and 8, 2001 in Toronto

Appearances:

Rod Hare for Mrs. Aleman

Philippa Samworth for State Farm Mutual Automobile Insurance Company

Issues:

Mrs. Aleman was injured in a motor vehicle accident on November 8, 1998. She applied for statutory accident benefits from State Farm Mutual Automobile Insurance Company ("State Farm"), payable under the Schedule.¹ State Farm refused to pay $800 for an in-home assessment conducted at Mrs. Aleman's apartment on October 27, 1999 by a kinesiologist. The parties were unable to resolve their dispute about this account through mediation and Mrs. Aleman applied for arbitration at the Commission under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The issues in this hearing are:

Is Mrs. Aleman entitled to be paid $800 for the in-home assessment of October 27, 1999, under the provisions of section 24 of the Schedule?
Who should pay the expenses of this arbitration?

Result:

Mrs. Aleman is not entitled to be paid $800 for the in-home assessment of October 27, 1999.
The issue of payment of the expenses of this arbitration has not yet been addressed.

EVIDENCE AND ANALYSIS:

Mrs. Aleman was injured in a motor vehicle accident on November 8, 1998. She was a passenger in a car that was stopped at a red light when it was hit from behind. Mrs. Aleman did not go to hospital after the accident, but she did see her family doctor, Dr. V. V. Madison, the next day. On February 1, 1999, Jane Lockley, a physiotherapist, provided a Treatment Plan on an OCF-18/59 form to State Farm. Ms. Lockley requested that State Farm pay for eight weeks of physiotherapy treatment for Mrs. Aleman such as heat, cervical traction, ultrasound, massage and exercises to decrease Mrs. Aleman's muscle spasm, referred pain, cervical pain, and headaches and to increase the range of movement of her cervical spine. State Farm approved this treatment plan.

On February 24, 1999, State Farm sent Mrs. Aleman a letter asking her to permit an occupational therapist to "perform an analysis of your activities of daily living within your home environment." State Farm's adjuster wrote that "[t]his will provide valuable information to be used in developing your rehabilitation plan." As well, State Farm advised that "the Occupational Therapist will meet with your physician in order to discuss the appropriateness of his/her treatment recommendations." According to the letter, State Farm required Mrs. Aleman to cooperate with this home assessment and doctor's visit under the terms of section 42 of the Schedule, which provides for insurer examinations.

Kelly Hayes, an occupational therapist, subsequently met with Mrs. Aleman on two occasions-March 3, 1999 and March 15, 1999. In her report of March 8, 1999, Ms. Hayes reviewed Mrs. Aleman's lifestyle before the accident, the history of the accident, and reported Mrs. Aleman's current complaints and therapy she was then undergoing. The occupational therapist reported on Mrs. Aleman's household activities and completed an Activities of Daily Living chart with her. Ms. Hayes noted Mrs. Aleman's physical abilities by visual inspection. She made several recommendations, including educating Mrs. Aleman on the nature of soft tissue injuries and the therapeutic benefits of engaging in household activities. Ms. Hayes recommended a cervical pillow, a back support, and that Mrs. Aleman enroll in an aquafitness class at the local parks and recreation building. Ms. Hayes returned for a follow-up visit with Mrs. Aleman on March 15, 1999.

Ms. Hayes also met with Dr. Madison on April 20, 1999. In her summary report of the meeting, Ms. Hayes indicated that the purpose of the meeting was to gather medical information to establish whether Mrs. Aleman qualified for a "non-earner" benefit under subsection 12(1) of the Schedule. Ms. Hayes recorded Dr. Madison's comments that the accident had worsened the symptoms of Mrs. Aleman's osteoporosis and arthritis and that she had complained to her of back, neck, shoulder, left hip and left leg pain. According to Ms. Hayes' report, Dr. Madison indicated that Mrs. Aleman was depressed, tired and experiencing dizziness as a direct result of the accident.

State Farm next sent Mrs. Aleman for a multidisciplinary insurer's examination, also under section 42 of the Schedule. These examinations were conducted by an orthopaedic specialist and a psychologist on April 29 and May 3, 1999, respectively. The examiners considered whether Mrs. Aleman met the test for entitlement to non-earner benefits, that is a complete inability to carry on a normal life, as a result of the accident. Based on the conclusions of these examiners, in early June 1999, State Farm sent Mrs. Aleman a form denying her eligibility for weekly non-earner benefits (that would have begun in mid-May, had she been entitled to them). State Farm also sent her a copy of the two reports.

The psychologist, Dr. G.K. Lau, did recommend in his report that Mrs. Aleman be monitored by a psychiatrist with respect to her medication and that she receive eight to ten sessions of psychological intervention to help her cope with her pain and stress. According to a letter in the State Farm file, dated June 24, 1999, State Farm forwarded a copy of these reports to Mrs. Aleman's family doctor, Dr. Madison. The letter drew Dr. Madison's attention to Dr. Lau's recommendations. The State Farm adjuster asked Dr. Madison to provide a written report if she had any further recommendations to make.

At the end of June 1999, Mrs. Aleman was discharged from her physiotherapy program. Her treating physiotherapist wrote: "heat, cervical traction and ultra sound and cervical exercises, neck education given. She is much better now. No longer cervical pain or referred pain."

In early August 1999, Mrs. Aleman retained a lawyer and through him requested a disability assessment by a Designated Assessment Centre (DAC) under section 37 and 43 of the Schedule. The DAC examinations were conducted by a psychiatrist and an orthopaedic specialist on September 3, 1999. The DAC concluded that Mrs. Aleman did not suffer a "complete inability to carry on a normal life due to either psychological or musculoskeletal impairments arising from the subject accident."

On October 18, 1999, Mrs. Aleman's lawyer sent State Farm an Application for Expenses relating to chiropractic treatment, transportation, and prescriptions for the period between April 28 and October 16, 1999. State Farm replied directly to Mrs. Aleman denying payment of the entire claim of $767.95. State Farm requested that a treatment plan form be completed by the chiropractor for his services and for the orthotics. State Farm also asked that Mrs. Aleman detail her prescription and transportation expenses. State Farm invited Mrs. Aleman to contact the new claim representative on her file if she had any questions. I have no evidence of any response to these requests by the Applicant personally or by anyone on her behalf.

However, a letter dated February 8, 2001 from Dr. J. Balkansky, Doctor of Chiropractic, was filed. In the letter, Dr. Balkansky confirmed that he treated Mrs. Aleman from July 30, 1999 to December 17, 1999 for a "recurrent left sided L5/S1 nerve/facet irritation." Dr. Balkansky wrote that Mrs. Aleman had been referred to his clinic by Dr. Madison, on July 29, 1999.

The next assessment that Mrs. Aleman appears to have undergone was an in-home assessment that is the subject of this arbitration. The in-home assessment was conducted by Sue-Anne Lee, a certified kinesiologist, on November 13, 1999 for a firm called Profile Evaluations. The evidence at the hearing established that Mrs. Aleman's lawyer, Jorge Barroilhet, facilitated Mrs. Aleman's cooperation with this assessment. The evidence also included a referral form dated October 20, 1999 signed by Dr. Madison, Mrs. Aleman's family doctor. In the space designated for "Diagnosis, impairment or malady" I accept that Dr. Madison appears to have written "low back pain."

When Profile Evaluations sent its account for the assessment to State Farm, State Farm replied that it would not pay for it "as we already have a home site assessment on file and as such it is not reasonable and necessary." It repeated this response when it was billed a second time by Profile Evaluations in January 2000.

By the time of the hearing, however, as noted above, State Farm was denying payment of the account for other reasons. State Farm stated that the assessment did not meet the criteria of section 24 of the Schedule, as outlined in the Tsimidis appeal decision.² State Farm submitted that the referral was not reasonable, the report was not ultimately helpful, and the cost charged was not reasonable in view of the time spent, care and expertise of the assessor.

On the other hand, Profile Evaluations submitted that this was a referral from the patient's physician to help Mrs. Aleman's medical/rehabilitation providers manage her problems. It submitted that Mrs. Aleman was entitled to their services under the policy.

For the reasons set out by Arbitrator Wacyk in Sivanesan and CIBC Insurance,³ I find that State Farm is able to rely on new reasons for denial of payment of the in-home assessment. As she wrote:

...the legislative intent appears to have been to encourage insurers to respond to claims quickly, rather than delay by crafting all possible arguments in the event the matter proceeds to arbitration.

Consequently, I find insurers are not precluded by section 41 from expanding the reasons claims ought to be denied, once the denial becomes a dispute.⁴

The Law:

When an assessment account is disputed, the arbitrator must decide whether the Applicant has proved, on a balance of probabilities, that the assessment meets the applicable criteria set out in the Schedule. Although the arbitration process at the Commission is less formal than court proceedings, the Applicant still bears the legal burden of proof in what remains an adversarial process.

Section 24 of the Schedule sets out the details as to provisions when examination costs must be paid by the insurer. It provides that:

(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; (...)

The key elements of subsection 24(1) for the purposes of this arbitration are:

did she obtain a certificate, report or treatment plan?
was it for the purpose of this Regulation?
was the expense reasonable?

The Law, applied to this Case:

Beginning with the most obvious criterion, I find, on a balance of probabilities that Mrs. Aleman did obtain a seven-page report of Ms. Sue-Ann Lee of an in-home assessment dated November 13, 1999.

Did Mrs. Aleman prove that this report was "for the purpose of this Regulation?" The answer to this question is less obvious, though the Applicant throughout the arbitration hearing appeared to treat the answer as obvious, or as admitted by the Insurer, which it was not. However, nothing on the face of Dr. Madison's referral for the report, dated October 20, 1999, indicates any connection with the Schedule or a motor vehicle accident. The referral form, which had been provided by Profile Evaluations, makes no reference to a motor vehicle accident, a date of loss, or a policy number whatsoever. Dr. Madison's diagnosis was "low back pain."

Dr. Madison did not testify at the arbitration, nor were her clinical notes and records part of the documentary evidence filed. A single report by Dr. Madison was in evidence—her Disability Certificate dated January 19, 1999. In Dr. Madison's opinion, two months after the accident, Mrs. Aleman was impaired by "back and upper back pain, headaches, dizziness, nausea, weak, low in energy, left shoulder pain, left leg pain, and low back pain." At the same time, Dr. Madison acknowledged in her January 19, 1999 certificate that she had treated Mrs. Aleman for "tension headaches and low back pain" prior to the accident. On the meagre medical evidence provided in this arbitration I cannot reasonably connect Dr. Madison's signature on the Profile Evaluations referral form in October 1999 and her diagnosis of "low back pain" to the accident of November 8, 1998.

The purpose of an examination or assessment can often be found in the report itself.⁵ The Profile Evaluations report itself, on its cover sheet, refers to a policy or claim number, a date of loss (November 8, 1998), and an "insurer contact" being the named claim specialist. The "Notice to Insurer" at the bottom of page one instructs that the cost of the report is covered by paragraph 24(1)(a) of the Schedule. However, the mere fact that the pertinent insurance details are recited on the cover page do not make the report one "for the purpose of the Regulation."

The first paragraph of the body of the report, which Ms. Lee testified was part of a standard Profile Evaluations' format, stated that the assessment was required for the preparation of a treatment plan or for the ongoing medical rehabilitation management of claim and benefit entitlement issues. In my view, then, to establish that this specific report was "for the purpose of the Regulation" evidence should have been offered that this report was intended to be used to establish a treatment plan, was otherwise useful in the course of Mrs. Aleman's rehabilitation, or was used in some way in a dispute with the Insurer over her entitlement to some benefit under the Schedule.

However, no evidence produced at this hearing established that the information gathered in this report was used by anyone for any purpose. Dr. Madison did not testify, nor was any report from her produced, other than her initial Disability Certificate dated January 19, 1999. I do not even know if she received a copy of the report. No treatment plan dated after the in-home assessment was filed. The chiropractor who treated Mrs. Aleman in the summer and fall of 1999 until December 17, 1999 wrote a short report dated February 8, 2001, but did not refer to either this assessment or the motor vehicle accident of November 8, 1998. I do not know if the chiropractor received a copy of the report. Although the report was at least partly arranged or facilitated by Mrs. Aleman's lawyer, no one testified that this report was useful for any ongoing benefit entitlement issues between Mrs. Aleman and State Farm.

In her decision in Sivanesan and CIBC Insurance, Arbitrator Wacyk agreed with the Tesfai decision that the purpose of an examination or assessment can be found in the report itself. In the context of the Sivanesan case, the arbitrator found that the reports at issue dealt with matters addressed in the Schedule "such as the degree of disability experienced by Ms. Sivanesan, its cause, and/or her need for treatment, rehabilitation, or other benefits." Arbitrator Wacyk dealt with disputed reports written by a physiatrist, an orthopaedic specialist and two psychologists. None of the reports before her, nor the reports before the Director's Delegates in Tsimidis and Salvaggio were in-home assessments by kinesiologists to determine the physical demands of a party's reported pre-injury activities of daily living. Ms. Lee's report gathered data on Mrs. Aleman's pre-accident life, in theory to allow her doctor or rehabilitation provider to set goals for her rehabilitation. As such, it is more of an adjunctive report than the reports considered in other cases. Standing alone its value is minimal.

For all these reasons, in my view, the Applicant has failed to prove that the report was "for the purpose of the Regulation."

Cost of the Report:

Having failed to prove that the report was "for the purpose of the Regulation" it is not strictly necessary to continue in an analysis of the cost of the report. However, for the sake of completeness I will consider whether the actual cost of the report was reasonable. Ms. Lee testified Profile Evaluations paid her about $200 to produce the report. Mr. Rowe of Profile Evaluations testified Ms. Lee was paid about $40 per hour plus expenses for each assessment. Profile Evaluations charged State Farm $800 for the report.

Ms. Lee testified that she spent about one hour with Mrs. Aleman. She stated she could not recall how long it took her to prepare the report, but that a "typical report" in the fall of 1999 took her approximately three hours to produce. I accept that Ms. Lee spent approximately one hour with Mrs. Aleman, but it is not plausible that she would have reasonably spent three additional hours producing the report, for the following reasons.

A large part of the report is standard text provided by Profile Evaluations or text repeated in other home assessments Ms. Lee performed. Exhibit 6 was another report of an in-home assessment dated October 4, 1999 dealing with an anonymous Profile Evaluations client. That report shows how similar in content and recommendations at least two of the reports Ms. Lee produced about this time were. In addition, although the report about Mrs. Aleman runs to seven pages, the information in narrative form on pages three to five is reproduced or duplicated in a one-page table entitled Critical Task Inventory on the final page of the report. The final page, then, although convenient in format, is not additional material.

Profile Evaluations produced a breakdown of the administrative or clerical tasks involved in arranging this assessment. I do not accept that clerical tasks such as "receive referral, set up file on system, obtain file information" are appropriately billed at $120 per hour—the same rate charged for the time of the kinesiologist. The claims examiner in charge of Mrs. Aleman's file provided information on the charges of two other firms for in-home assessments in 1999 that ranged from $400 to $700. Similar in-home services provided by Ms. Hayes, the occupational therapist, in March 1999 to Mrs. Aleman cost $538.82, including a five-page report and completion of an Activities of Daily Living form.

For purposes of comparison, it is useful to look at the fee guidelines in place for some health professionals involved in rehabilitation after motor vehicle accidents. No guideline with respect to the services of certified kinesiologists was in effect at the time of Mrs. Aleman's accident or has come into effect since that time. The Professional Fees Guideline for Physiotherapists published by the Commission in 1997 called for a range of fees for services provided by physiotherapists between $95 and $120 per hour for direct one-on-one treatment time and including administrative time such as report writing. The Professional Fees Guideline for Occupational Therapists published by the Commission on February 3, 2001 calls for a range of fees for services provided by occupational therapists beteen $95 and $120 per hour for professional time. Travel time and travel expenditures is specifically excluded from the guideline fees range.

In the Tsimidis appeal decision, Director's Delegate McMahon suggests that the emphasis in scrutinizing a disputed report should be on the process— "the amount of time, care and expertise that went into the conduct of the assessment and the preparation of the report"— rather than on the usefulness of the ultimate opinion. In the Tsimidis case, however, the parties agreed that the referral was reasonable. Not so in this case. Similarly, in the Salvaggio appeal case, Director's Delegate Naylor felt the arbitrator had not given "sufficient consideration to whether the assessment was a reasonable measure in the circumstances at the time it was arranged" and may have been "overly influenced by his view of the value of the end-result." The distinguishing point in this case is that Mrs. Aleman has failed to prove that the referral to Profile Evaluations for an in-home assessment was even related to the injuries she received in the motor vehicle accident of November 8, 1998.

In Tsmidis the Director's Delegate also noted:

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 to 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.

[emphasis added]

I am satisfied that Ms. Lee spent sufficient time with Mrs. Aleman in her one-bedroom apartment to take measurements and gather the data she required for her report. I am satisfied that the in-home assessment she performed carefully verified the physical demands of Mrs. Aleman's pre-injury activities of daily living, at least as reported by Mrs. Aleman. I am satisfied that Ms. Lee brought to her report a degree of expertise acquired through four years of study for a bachelor of science degree majoring in human kinetics and 20 months' work experience as a kinesiologist and functional capacity evaluator. Whether Ms. Lee's report would have been of much more use to a rehabilitation provider than the OCF-12 form completed by Mrs. Aleman as part of her application for benefits or the Activities of Daily Living form completed with the occupational therapist in March 1999, remains unknown.

If I had been satisfied that the report was an expense contemplated by section 24 of the Schedule and it was appropriate for Dr. Madison to order the report, I would have been prepared to allow $400 as a reasonable expense for the report. I calculate this figure based on three and a half hours of Ms. Lee's time billed at $100 per hour, including travel time and report writing, and $50 for fifty minutes of administrative time in completing clerical tasks associated with providing the service.

EXPENSES:

In compliance with Rule 75 of the Dispute Resolution Practice Code, the parties advised me at the close of the hearing that they wish me to consider an Offer to Settle or a Response to an Offer to Settle in connection with an award of expenses. If the parties cannot settle the issue of expenses between themselves, a party may apply to the case administrator for the hearing to be resumed for submissions on this issue.

March 6, 2001

K. Julaine Palmer Arbitrator

Date