Financial Services Commission of Ontario
Neutral Citation: 2001 ONFSCDRS 64 FSCO A00-001016
BETWEEN:
DANA BEAMAN Applicant
and
GUARANTEE COMPANY OF NORTH AMERICA Insurer
DECISION ON A PRELIMINARY ISSUE
Before: William J. Renahan
Heard: April 6, 2001, at the Offices of the Financial Services Commission of Ontario in Toronto
Appearances: David F. MacDonald for Mrs. Beaman Doug Wallace for Guarantee Company of North America
Issues:
The Applicant, Dana Beaman, was injured in a motor vehicle accident on August 17, 1998. She applied for and received statutory accident benefits from Guarantee Company of North America ("Guarantee"), payable under the Schedule.1 Guarantee refused to pay for certain medical benefits which Mrs. Beaman claims pursuant to section 14 of the Schedule. Subsection 281(2) of the Insurance Act requires a person to seek mediation before referring the issues in dispute to an arbitrator. Mediation failed and Mrs. Beaman applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.
The preliminary issue is:
- Has Mrs. Beaman provided Guarantee with a treatment plan with respect to medical benefits as required by section 38 of the Schedule, and if not, what are the consequences?
Result:
- Mrs. Beaman did not provide Guarantee with a treatment plan with respect to medical benefits. Such failure does not bar Mrs. Beaman from proceeding to arbitration for medical expenses incurred before May 15, 2000. Mrs. Beaman may not proceed to arbitration for medical expenses incurred after May 15, 2000 and before April 6, 2001.
EVIDENCE AND ANALYSIS:
The parties submitted joint document briefs and made submissions.
The parties advised me that the medical benefits in dispute in the main hearing are as follows:
Physiotherapy and massage treatments provided by Kingsway Health and Rehabilitation over the period November 27, 1998 to November 25, 1999;
Physiotherapy treatments by Mississauga Orthopaedic and Sports Injury Centre over the period December 6, 1999 to June 22, 2000 and ongoing:
Ongoing physiotherapy and massage treatments as recommended by Dr. Linda MacDonald in a report dated February 24, 1999.
Background:
Section 38 of the Schedule sets out the procedure an insured must follow to claim medical and rehabilitation benefits from his or her insurer. In general, and with certain exceptions it provides:
(1) Before expenses in respect of which a medical or rehabilitation benefit may be payable are incurred, the insured person shall submit an application for the benefit to the insurer.
(2) The application must include a treatment plan.
The term, "treatment plan," is defined in section 2 of the Schedule and must include a conflict of interest statement set out in subsection 38(3). If the insurer will not pay for the goods or services contemplated by the treatment plan, the insurer must require the insured person to be assessed in respect of those goods and services at a Designated Assessment Centre ("DAC"). The DAC report must express an opinion on whether the expense is reasonable and necessary and the insurer must pay or may decline to pay the expense in accordance with that opinion. The DAC is also authorized under subsection 43(6)(b) to make recommendations on future treatment. If the insured wishes to dispute the opinion of the DAC, the insured may bring a proceeding in court or refer the issue to an arbitrator.
At first glance, it appears that no medical or rehabilitation benefit is payable to Mrs. Beaman because she did not comply with the clear wording of section 38 which stipulates that before an insured incurs expenses for medical treatment, the insured "shall" apply for the benefit from the insurer and the application "must" include a treatment plan. However, I also heard evidence and submissions that Guarantee did not comply with the clear wording of subsection 32(2) which requires the insurer to provide its insured with information to assist the person in applying for benefits.
Although section 38 appears clear, the result is not obvious when the words are applied to a specific factual situation which the drafters of the legislation may not have had in mind. I examine the evidence in light of Mrs. Beaman's allegation that Guarantee did not comply with its duty to assist Mrs. Beaman in applying for benefits and cannot now take advantage of Mrs. Beaman's failure to comply with the strict wording of section 38.
Facts:
Kingsway Health and Rehabilitation ("Kingsway") submitted a treatment plan to Guarantee dated August 27, 1998 for physiotherapy to treat Mrs. Beaman's impairments, which Kingsway described as decreased range of motion and muscle spasm in the neck and neural tension in the right shoulder. Guarantee accepted that plan and an extension of that treatment until November 1998. Guarantee denied Kingsway's treatment plan dated November 16, 1998 for a further six weeks of physiotherapy and massage treatment on the grounds that "the prescribed treatment does not appear to be reasonable and necessary." Mrs. Beaman attended a DAC which expressed the opinion that the proposed treatment was not reasonable or necessary.
The physiatrist at the DAC wrote: "At this time, I do not feel the treatment outlined in the Treatment Plan in dispute is reasonable or necessary." The physiotherapist wrote that "no further active treatment is recommended." The massage therapist wrote: "I do not recommend any further registered massage therapy treatment at this time." The Summary Report expressed the opinion that the "proposed treatments are not reasonable and necessary."
On January 21, 1999, the adjuster wrote to Mrs. Beaman his interpretation of the DAC opinion as follows:
. . .wherein the Assessors have provided their opinions that "no additional active physiotherapy is reasonable or necessary."
I believe this interpretation is correct with respect to the opinion of the physiotherapist. However, it overstates the opinion of the physiatrist. The physiatrist expressed his opinion that the proposed treatment was not reasonable or necessary "at this time." He did not express an opinion on any future physiotherapy treatment.
The adjuster also wrote:
Accordingly, as set out in the enclosed Explanation of Benefits, any expenses incurred beyond what have been APPROVED in previous Treatment Plans will not be considered by The Guarantee Company of North America and the responsibility for payment is yours. [emphasis in original]
This is the first of a number of communications from the adjuster which advises Mrs. Beaman that Guarantee will not consider any further claims for medical or rehabilitation benefits.
On February 24, 1999, Mrs. Beaman retained counsel who wrote to the adjuster that he expected further information in support of continued rehabilitation benefits. The adjuster replied:
We would be pleased to receive and review any further documentation that you or Ms. Beaman have in your possession, however at this time given the results of the above noted assessment [DAC assessment] no consideration will be made for payment of any outstanding or ongoing treatment expenses.
Also on February 24, 1999, Mrs. Beaman's family doctor wrote a two-page letter in support of Mrs. Beaman's need for ongoing physiotherapy and massage therapy in her neck area. Mrs. Beaman's lawyer did not include the letter in his letter to the adjuster and the adjuster replied "Please provide the above noted report at your earliest convenience so that we may provide to our principal for review and consideration." More than two months passed before the lawyer sent the report to the adjuster. The adjuster replied on June 3, 1999 that Guarantee had reviewed the matter and that "no further treatment expenses after the date of the DAC assessment . . . will be considered" by Guarantee and that "all such expenses will be sole responsibility of Mrs. Beaman." By letter to the lawyer dated September 7, 1999, the adjuster repeated that "no further treatment expenses . . . will be considered." and
Please be advised that we will be proceeding to close our file on this matter if we do not receive any further documentation or information from you or Mrs. Beaman within 14 days from this letter.
Mrs. Beaman's family doctor referred Mrs. Beaman to Dr. Ruth Smith, a physiatrist. On November 19, 1999, she reported to the family doctor her diagnosis of thoracic outlet syndrome and her recommendation that Mrs. Beaman change physiotherapy facilities from Kingsway to Mississauga. Dr. Smith also did a report for Mrs. Beaman's lawyer which the lawyer forwarded to the adjuster on March 17, 2000.
Guarantee arranged an independent medical examination by an orthopaedic surgeon who did not find any "positive clinical findings to indicate the presence of" thoracic outlet syndrome.
Mrs. Beaman applied for mediation with respect to her claims for physiotherapy. At the mediation teleconference on May 15, 2000, Guarantee's lawyer raised for the first time Mrs. Beaman's failure to submit treatment plans as required by subsection 38(2).
Whether Mrs. Beaman submitted a treatment plan:
A "treatment plan" is defined in section 2 of the Schedule as
"treatment plan" means, in respect of an insured person who sustains an impairment as a result of an accident, a document prepared by a member of a health profession that includes,
(a) a description of the impairment,
(b) a description of any disability that results from the impairment and an estimate of the duration of the disability,
(c) a description of the goods and services that will be used in the treatment or rehabilitation of the insured person and a description of the benefits that are anticipated from the goods and services,
(d) a statement identifying the persons who will provide the goods and services,
(e) an estimate of the duration of the services,
(f) an estimate of the costs of the goods and services,
(g) a statement identifying a member of a health profession who will supervise the implementation of the treatment plan,
(h) a statement by a health practitioner indicating that he or she approves of the treatment plan and is of the opinion that the expenses contemplated by the treatment plan are reasonable and necessary for the insured person's treatment or rehabilitation, and
(i) the statement required by subsection 38 (3).[footnote conflict of interest]
Under section 69 of the Schedule, the treatment plan shall be in a form approved by the Commissioner. The form consists of three pages and is described as OCF-18/59.
In the Assessment Guide for Medical/Rehabilitation DACs published by the Financial Services Commission in September 2000, the significance of the treatment plan is described as follows:
This if the foundation of the Med/Rehab assessment, and the assessment process must always begin with this crucial step.
The documents submitted by Mrs. Beaman do not amount to a "treatment plan." Without deciding whether the information must be contained in the approved OCF-18 form, most of the information required by the definition of "treatment plan" is not included in the doctors' letters. I find that Mrs. Beaman did not submit a treatment plan for the services provided by Kingsway or Mississauga.
Consequences of failure to submit a treatment plan:
The real issue is what are the consequences of Mrs. Beaman's failure to submit a treatment plan. With specified exceptions, section 38 provides that before the insured incurs expenses for medical or rehabilitation benefits, she must submit an application and the application "must" include a treatment plan. Under subsection 38(22) an insurer can agree to pay an expense without the submission of an application or treatment plan. The only legislated consequences of failing to comply is set out in subsection 38(17) which allows an insured to submit an application and treatment plan "within 30 days after incurring the expenses."
Although Guarantee, through its adjuster, wrote that it would consider the family doctor's letter, in the main, it discouraged Mrs. Beaman from applying for benefits and submitting a treatment plan. On at least four occasions, it wrote that it would not consider further claims for medical or rehabilitation benefits, that Mrs. Beaman was responsible for the payment of any such expenses and that the adjuster planned to close his file.
Mrs. Beaman has medical and rehabilitation coverage under her policy with Guarantee for ten years from the date of the accident. Guarantee has a statutory duty under paragraph 32(2)(c) of the Schedule to "promptly provide the person with information to assist the person in applying for benefits." Under section 268.3 of the Insurance Act, I am bound to consider any guideline issued by the Commissioner in the interpretation of the Schedule. Commissioner's Guideline No. 2/96 advises insurers to:
- Inform claimants about the kind of accident benefits that are available under the SABS, let claimants know all the procedures to be followed and documentation needed when applying for benefits.
I do not believe it is fair to allow Guarantee to rely on Mrs. Beaman's failure to submit a treatment plan when it has not complied with its duty to assist her by promptly advising her that it required a treatment plan. This is particularly unfair, when instead of informing Mrs. Beaman that it required a treatment plan, Guarantee discouraged Mrs. Beaman from applying for medical benefits by telling her that it would not consider further applications and that it planned to close its file.
The drafters of section 38 could not have intended to allow an insurer to deny coverage in a situation such as this where the insurer has not complied with its duties.
Guarantee first advised Mrs. Beaman that it was relying on its right to receive a treatment plan at mediation, on May 15, 2000. Mrs. Beaman was represented by legal counsel at mediation and should have understood that Guarantee was relying on its right to receive treatment plans. In my opinion, Mrs. Beaman should have submitted a treatment plan for any proposed services after May 15, 2000.
Accordingly, I find that Mrs. Beaman may proceed to arbitration on claims for medical expenses incurred before May 15, 2000, notwithstanding that she did not submit a treatment plan for those expenses. Mrs. Beaman may not proceed to arbitration for medical expenses incurred after May 15, 2000 and before April 6, 2001, the date of this hearing, since she did not submit treatment plans for those services when she knew that Guarantee was relying on its right to receive treatment plans.
As for medical or rehabilitation treatment incurred or proposed after the date of this hearing on April 6, 2001, I leave it to the parties to comply with the provisions of the Schedule with respect to applying for those benefits and responding to those applications.
EXPENSES:
If the parties cannot agree on the issue of entitlement to expenses of this hearing of a preliminary issue they may make written submissions to me within 30 days of receipt of this decision.
May 1, 2001
William J. Renahan Arbitrator
Neutral Citation: 2001 ONFSCDRS 64 FSCO A00-001016
FINANCIAL SERVICES COMMISSION OF ONTARIO
BETWEEN:
DANA BEAMAN Applicant
and
GUARANTEE COMPANY OF NORTH AMERICA Insurer
ARBITRATION ORDER
Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
- Mrs. Beaman may proceed to arbitration for medical expenses incurred before May 15, 2000. Mrs. Beaman may not proceed to arbitration for medical expenses incurred after May 15, 2000 and before April 6, 2001.
May 1, 2001
William J. Renahan Arbitrator
Footnotes
- The Statutory Accident Benefits Schedule —Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended by Ontario Regulations 462/96, 505/96, 551/96 and 303/98.