Neutral Citation: 2009 ONFSCDRS 146 FSCO A07-002502

BETWEEN:

SURJIT SINGH LUBANA Applicant

and

MARKEL INSURANCE COMPANY OF CANADA Insurer

REASONS FOR DECISION

Before: John Wilson Heard: September 17, 2008, at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances: Sharon E. Ramsden for Mr. Lubana Kevin S. Adams for Markel Insurance Company of Canada

Issues:

The Applicant, Surjit Singh Lubana, was injured in a motor vehicle accident on June 10, 2006. He applied for and received statutory accident benefits from Markel Insurance Company of Canada ("Markel"), payable under the Schedule.¹ Mr. Lubana was found to meet the criteria for catastrophic impairment, opening a further range of benefits to him. There is no dispute that Markel did fund and continues to fund further benefits under the catastrophic designation.

Markel did not resist the reasonableness and necessity of some of the services provided by caregivers and service providers. However it could not agree with Mr. Lubana as to the appropriate rate of pay for services provided by a social worker performing case management services. Although Markel paid towards the cost of the services, there was a serious discrepancy between the payments and the cost of the services to Mr. Lubana.

The parties were unable to resolve their disputes through mediation, and Mr. Lubana applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended. The issues in this hearing are:

Are the case management services provided to Mr. Lubana by Nancy Haston and Associates and billed to Markel payable at the rate set for a registered social worker or a rate set in accordance with the Professional Services Guideline as it relates to case management services?

Result:

The case management services provided to Mr. Lubana by Nancy Haston and Associates and billed to Markel are payable at a rate appropriate to a registered social worker and is not governed by the Professional Services Guideline as it relates to case management services.

EVIDENCE AND ANALYSIS:

The facts in this dispute are quite straightforward. Among the services provided to Mr. Lubana are certain services provided by members of the College of Social Work, employed by Nancy Haston and Associates as case managers.

Markel takes comfort in the fact that the Schedule specifically provides for a limitation on the billings of treatment providers, limiting them to rates agreed upon by the professional association or set by FSCO.² At the same time jurisprudence has tended to limit the pay scale of non-professional treatment providers to a level approximating the prevalent minimum wage in effect in Ontario at the time that services were provided.

The wording of the Guideline relied upon by Markel is as follows:

This Guideline establishes the maximum expenses payable by automobile insurers under the SABS related to the services of any of the health care professions or health care providers listed in the Guideline. (emphasis added) These maximums are applicable to:

a medical benefit under clauses 14 (2) (a), (b), or (h) of the SABS;

a rehabilitation benefit under clauses 15 (5) (a) to (g) or (l) of the SABS;

case management services under subsection 17 (1) of the SABS; or

conducting an examination or assessment or provision of a certificate, report or

The Guideline continues, clarifying its ambit somewhat:

Insurers are not prohibited from paying above any maximum amount or hourly rate established in the Guideline.

Services provided by health care professionals/providers, unregulated providers and other occupations not listed in the Guideline are not covered by the Guideline. (emphasis added) The amounts payable by an insurer related to services not covered by the Guideline are to be determined by the parties involved.

The effect of such a Guideline is set out in 268.3 (2) of the Insurance Act:

(2) Subject to section 268.2, a guideline shall be considered (emphasis added) in any determination involving the interpretation of the Statutory Accident Benefits Schedule, 1993, c. 10, s. 27.

Hence, if there is an applicable Guideline affecting the provision of case management services professional social workers, it must be considered in determining the reasonableness of the expenses claimed for such services.

It is important to note the use of the word "consider" in this context. Consider can be taken to mean:

Contemplate mentally, esp. in order to reach a conclusion; 2. examine the merits of a course of action a candidate claim; 3. give attention to; 4. take into account.

In essence, if there is a valid Guideline addressing case management services provided by professional services, that Guideline would be one factor that is to be taken into consideration in making any determination as to entitlement. This choice of wording strongly suggests that a Guideline once considered, is not mandatory, provided that there are valid reasons to reject its application.

It is common ground however that there is no specific guideline or other directive in the context of statutory accident benefits mandating a specific fee schedule for the work undertaken by professional social workers.

Markel suggests that one should, in effect, extrapolate from the Guideline addressing case management services in general to arrive at a fee level for social workers providing such services. I do not accept that such an exercise is sustainable in light of the principles of both statutory and contractual interpretation, and the wording of both the Schedule and the Guidelines issued by the Superintendant.

There no dispute that both case managers employed by Nancy Haston and Associates were members of the College of Social Work, and qualified social workers.

It is also clear that the College of Social Workers of Ontario has established recommended hourly rates for social workers involved in medical rehabilitation work related to motor vehicle accidents. These rates are contained in a range between $130 to $150 per hour, with a maximum of $160 per hour in cases where the services can be described as "medical legal."

That the College has addressed the type of services provided to Mr. Lubana by employees of Nancy Haston and Associates is clear from the notation on Exhibit 2, relating to recommended hourly rates, that defines work related to motor vehicle accidents as including "DAC Assessments, future care costs and needs assessments, rehabilitation/case management assessments."

Markel has taken the position that, notwithstanding the above, the various case managers provided by Nancy Haston and Associates should not be paid as social workers, but rather as case managers, whose rates either are covered by the Guideline or are subject to agreement by both parties.

Section 17 (1) of the Schedule specifically deals with the provision of case management services, such as those claimed by Mr. Lubana in this arbitration.

(1) The insurer shall pay all reasonable and necessary expenses incurred by or on behalf of an insured person as a result of the accident for services provided by a qualified case manager in accordance with a treatment plan if,

(a) the insured person sustains a catastrophic impairment as a result of the accident; or

(b) the accident occurred on or after October 1, 2003 and the optional medical, rehabilitation and attendant care benefit referred to in section 27 has been purchased and applies to the insured person. O. Reg. 281/03, s. 6.

(2) The insurer is not liable under subsection (1) to pay expenses related to professional services rendered to an insured person that exceed the maximum rate or amount of expenses established under the Guidelines applicable to the claim. O. Reg. 281/03, s. 6.

This provision, in addition to being contained in subordinate legislation also forms part of the insurance contract and is hence subject to all the rules surrounding the interpretation of contracts, especially contracts of indemnity.

One of the fundamental principles of non-life insurance such as automobile insurance is that of indemnity. As Brown and Menezes have stated in Insurance Law in Canada: that "The essence of indemnity insurance as a commercial transaction is the promise to repay the insured in the event of a particular type of loss..."³

Such textbook statements derive from and correspond with the traditional jurisprudence⁴ in this area.

The accident benefit scheme is, with some minor exceptions, seen as essentially an indemnity insurance scheme.⁵ Such is clearly the case in section 17 of the Schedule, cited earlier.

The question in this arbitration turns on whether the rate for a registered social worker should be limited by analogy to other similar professions, whether in the absence of a specific authorized fee level the rate defaults to that of another unqualified provider, or whether the social worker may simply bill at his or her accustomed rate.

Given the nature of the accident benefit scheme as indemnity insurance which provides for payments as incurred⁶ up to any legislative maximum, the latter would seem to be the preferable course.

Section 17 (2) as noted earlier, also includes a limiting provision, potentially providing for a maximum rate for case manager services.

I reiterate that it is common ground between the parties that there were no such professional fee guidelines in place duly published in The Ontario Gazette, specifically setting rates of pay for social workers acting as case managers at the time Mr. Lubana engaged his case manager.

The Legislation Act⁷ tells us that the provisions of the accident benefit scheme as subordinate legislation, should be interpreted liberally. The Supreme Court suggests in Smith⁸ that the accident benefit scheme itself should be treated as a consumer protection provision, and so interpreted.

Consequently, although the legislature can and does provide limits on certain accident benefits, any derogation from the rights granted under the Schedule must be clearly stated and unequivocal. As well, as a contract of insurance, where there is any vagueness, or contradiction in the wording of a contract provision, the interpretation that favours the insured should prevail.

In this case, it is the right to full indemnity under an insurance contract that should not be unduly restricted in the absence of a clear provision to that effect.

Consequently, in the absence of official Professional Fees Guidelines for social workers working as case managers, published in The Ontario Gazette by the Ontario Insurance Commission or Financial Services Commission of Ontario, the full indemnity principle of section 17 remains intact and in place, provided of course that the bill for services constituted "reasonable and necessary expenses" provided by "a qualified case manager."

Nowhere in the Insurance Act or its regulations is the phrase "qualified case manager" defined.

Section 2 (1) of the Schedule however defines a "case manager" as "a person who provides

services related to the coordination of goods or services for which payment is provided by a

medical, rehabilitation or attendant care benefit; ("gestionnaire de cas")."

There has been no evidence that a social worker is specifically unsuited to the provision of case management services in cases such as Mr. Lubana's.

Nor was there was any evidence that there is any professional organization regulating case managers, and restricting such activities to its members. Consequently the use of the adjective "qualified" in connection with "case manager" would suggest that the case manager must merely be "competent or fit for the purpose."⁹

Since qualification is related to the purpose of the services it follows that a more complex case would demand a higher degree of qualification.

As noted, as of the date of the hearing Markel had conceded that Mr. Lubana met the criteria for catastrophic impairment.

It is clear from the correspondence and documentation filed in this arbitration as well as testimony at the hearing by Ms. Haston, that the case administrator performed important and complex tasks. For example, the October 5, 2007 "follow up report" issued by Nancy Haston and Associates lists among the "approved activities conducted:"

Maintain contact with Mr. Lubana to obtain information on current medical/functional status, and to provide support, as required
Liase with Dr. Oshidari (Physiatrist, Lyndhurst, TRI) to obtain a medical update
Communicate with all treatment providers including PT and Kinesiologist regarding progress with rehabilitation goals
Liase with Dr. DeCunha regarding psychological treatment recommendations
Communication with NHA OT regarding Mr. Lubana's Attendant Care Needs
Communicate with Dr. Svoboda (Dental Surgeon) regarding dental work recommended
Maintain contact with Mr. Jeff Baum of Adapt-Able Design Group regarding long-term housing solutions
Maintain contact with Mr. Mitson of Dr. N. Doxey & Associates to facilitate a referral for a Psychovocational Evaluation
Communication with Woods Pharmacy to facilitate payment for medications and GU supplies, as needed
Maintain contact with the insurer regarding implementation of various recommendations
Maintain contact with legal counsel.

Other reports filed show a similar pattern of high-level co-ordination.

The work outlined above is far and beyond the simple co-ordination that could be accomplished by a clerk. Indeed, such wide-ranging activity co-ordinating complex assessment, treatment, and provision of services to a catastrophically-impaired person not only appears compatible with the qualifications of social workers in general, but with the qualifications and experience of the individual social workers detailed by Nancy Haston and Associates for this project.

As noted, earlier, the College of Social Workers clearly perceives work as a case manager in motor vehicle accident cases, as within the purview of a registered social worker. I accept that the position of the College is reasonable. I note however that it does not claim a monopoly on such services for its members.

Markel has not presented any evidence as to the reasonableness of using a social worker for such services, apart perhaps from raising the rhetorical question of whether a highly-paid specialist physician could also get away with charging his or her going rate for simple case management.

I find however that case management is one of the competencies of a registered social worker.

Consequently, I find that the use of a registered social worker for the case management services can constitute the use of a "qualified case manager" as that term is used in the Schedule.

As noted earlier, there is no controversy that, given Mr. Lubana's undisputed catastrophic status, and the need to co-ordinate both treatment and daily living services, case management services are necessary.

It is clear from the Guideline itself that services not covered by the Guideline are to be set on agreement between the parties. In absence of agreement, as in any other dispute between an insured and an insurer, it is left to the dispute resolution procedure chosen by the insured to determine an appropriate rate. The primary criterion for the decision is whether, in the context of the claim, those services were reasonable.

On the criterion of reasonableness, I find, as well, that in the context of the complex work undertaken by the case managers employed by Nancy Haston and Associates, and in the light of normal charges for a registered social worker, the expenses claimed by Mr. Lubana as case management expenses are reasonable.

Where there is no contract setting out agreed rates to be charged for a necessary service, it is trite law that a judge or adjudicator having jurisdiction over the issue may set an appropriate fee level based on reasonableness.¹⁰ Such an award is given "to compensate for the value of work, goods, or services supplied where contractual provisions for such compensation do not exist..." ¹¹

In this matter the insurer has accepted the provision of case management services by a social worker but has refused to pay at a rate appropriate to that profession, in the absence of an agreement as to level of funding.

Whether specifically defined as quantum meruit or not the principle is the same. It is the same analysis and serves to set the extent of liability for services as implied by law.

The amount of any award is only the reasonable value of the services rendered.

While Markel may not have had a direct contractual relationship with Nancy Haston and Associates, there was a contractual nexus between it and Mr. Lubana for whom the services were provided.

It was clear however that Markel was not ignorant of the services provided. The case managers were in direct contact with Markel and their adjusters¹², to whom they submitted both reports of activity, and ultimately invoices for the services provided.

To use the words of Cronk J.A. the case management services "were furnished at the request, or with the encouragement or acquiescence, of the opposing party in circumstances that render it unjust for the opposing party to retain the benefit conferred by the provision of the services." ¹³

While Markel may have clearly indicated its preference not to pay the full rate appropriate to a social worker, it ultimately recognized Mr. Lubana's catastrophic status and his need for case management services.

It did so without either an agreement with the treatment provider to limit billings, or the benefit of a legislative limitation on billing rates such as would be provided by a valid Fee Guideline, published by FSCO. Consequently it could not unilaterally impose a fee limitation on the services provided by Nancy Haston and Associates.

While Mr. Lubana has an obligation to obtain value for money and not claim indemnity for unreasonable services, it would be unjust to allow Markel to discharge its obligation to fund case management services by unilaterally underpaying highly skilled professionals engaged in an essential service.

Notwithstanding Markel's submissions that this is a claim "being advanced on behalf of and for the sole benefit of Nancy Haston and Associates Inc." I accept that this claim is all about indemnifying Mr. Lubana for the true value of the services rendered to him to address catastrophic impairments arising out of a motor vehicle accident. I also accept that it is clear that Markel is obliged to fully fund these services.

I find that the best evidence before me of the going rate for social workers acting as case managers in such matters is that proposed by the social workers themselves, and billed by Nancy Haston and Associates.

Consequently, I find that Markel is obliged to pay for Mr. Lubana's case management at a rate appropriate to social workers, and not at a lower rate for case managers who either belong to a different professional group subject to a fee limitation, or who are unaffiliated with any other specific professional group.

Since the amount owing by Markel to date is reflected in a series of ongoing invoices, less partial payments over a period of years, I would encourage the parties to settle the amount currently outstanding, failing which I may be spoken to on that issue.

INTEREST:

Since interest is mandatory from the date a payment is overdue in accordance with section 68 of the Schedule compound statutory interest shall be payable from 30 days following the date of each invoice on the unpaid portion of that invoice until such time as the amounts are paid in full.

If the parties are unable to agree on the calculation of such interest amounts, I may be spoken to on that issue, provided that the request is made within 60 days of the delivery of this decision.

EXPENSES:

Given Mr. Lubana's success in this matter, barring unusual circumstances, it would likely follow that he would be entitled to his expenses in this arbitration. If the parties are unable to agree on the issue of expenses, I may be spoken to on that issue, provided that the request is made within 60 days of the delivery of this decision.

October 28, 2009

John Wilson Arbitrator

Financial Services Commission of Ontario