Financial Services Commission of Ontario

Neutral Citation: 2011 ONFSCDRS 39 FSCO A10-003206

BETWEEN:

MEGHAN INNES Applicant

and

INTACT INSURANCE COMPANY Insurer

MOTION IN REGARD TO INSURER’S MEDICAL EXAMINATIONS

Before: Edward Lee Heard: By telephone conference call on February 2, 2011.

Appearances: Deanna S. Gilbert for Meghan Innes Brian Evoy-Smith for Intact Insurance Company

The applicant, Meghan Innes, brought a motion for an order declaring that the in-person medical examinations proposed by the insurer (Intact Insurance Company), are not reasonably necessary to assist the insurer in determining whether or not she is catastrophically impaired. The applicant also sought an order requiring the insurer to make its determination on catastrophic impairment by reviewing medical documentation already available to it, or by referring the question to its assessors who have recently examined the applicant.

In response, Intact sought an order to stay these proceedings until the applicant has attended assessments with Dr. Dost, Dr. Bordoff and J. Turgeon, or any similarly qualified assessors who might be substituted for them, to assist Intact in determining whether the applicant has sustained a catastrophic impairment.

Issues:

The issue in this hearing is:

1. Are the in-person medical examinations proposed by the insurer reasonably necessary to assist the insurer to determine if the applicant is catastrophically impaired?

Result:

1. The in-person medical examinations proposed by the insurer are reasonably necessary to assist the insurer to determine if the applicant is catastrophically impaired.

2. The proceedings are stayed until Ms. Innes makes herself reasonably available for insurer’s examinations by Dr. Dost, Dr. Bordoff or J. Turgeon or any similarly qualified assessors who must be substituted for them in order to assist Intact to determine whether Ms. Innes has sustained a catastrophic impairment.

3. The examinations with these assessors must be scheduled for a date that is no later than 60 days from the date of this order.

AGREED FACTS:

Ms. Innes was involved in an automobile accident on January 26, 2008.

On December 10, 2009, Ms. Innes submitted an Application for Approval of an Assessment or Examination (OCF-22). At Part 5 of the application, “Provisional Clinical Information”, the following information was given: “Detailed physiatrist and psychiatric assessments are proposed to determine if the claimant has sustained a catastrophic impairment.” Under Part 7, Proposed Goods and Services, the services included the following: “A physiatrist file review, WPI analysis and report”.

In response to earlier requests, Ms. Innes then attended three Insurer’s medical examinations on December 16, 2009, March 18, 2010 and March 30, 2010, performed by a neurologist, an orthopedic surgeon, and a psychologist respectively. The purpose of these examinations was to determine whether Ms. Innes was entitled to income replacement benefits (“IRBs”) post 104-weeks.

These examiners issued reports in January 2010 and April 2010, and concluded that Ms. Innes was not entitled to post 104-week IRBs.

Ms. Innes filed an Application for a Determination of Catastrophic Impairment (OCF-19) on May 3, 2010.

On May 31, 2010, the Insurer informed Ms. Innes that it was unable to determine if she had sustained a catastrophic impairment. The insurer then requested that she attend four more in-person medical examinations before a neurologist, a physiatrist, an occupational therapist and an orthopedic surgeon to determine if she had been catastrophically impaired.

Ms. Innes attended the first of these insurer’s medical examinations in July 2010, but subsequently refused to attend the three remaining scheduled catastrophic assessments on the grounds that they were neither reasonable nor necessary.

MS. INNES’ ARGUMENT:

Ms. Innes argued that the medical examinations were neither reasonable nor necessary for the following reasons.

First, no new issues were raised in the claim requiring further medical evaluation by the insurer. Although the application for a determination of catastrophic impairment raised the new issue of catastrophic impairment, the impairments upon which such an opinion would be based are not new. The insurer had already conducted numerous in-person assessments of Ms. Innes, including the four most recent, performed between December 2009 and July 2010.

Second, Intact could have asked Ms. Innes to attend an in-person examination on the catastrophic issue at any time based upon section 42 of the Schedule, so long as the request was reasonable and necessary. Intact did not have to wait to receive the Application for a Determination of Catastrophic Impairment, because Intact had already received notice of the impending catastrophic claim through the Application for an Approval of an Assessment or Examination (which referred to the applicant’s own assessment for the purpose of determining catastrophic injury) filed by Ms. Innes in December 2009. At that time, the section 42 examinations for the post 104-week IRBs had not yet taken place. Intact could have taken steps to have the catastrophic assessments performed simultaneously with the post 104-week IRB assessments.

Third, Intact failed to consider whether it already had sufficient information to determine whether Ms. Innes was catastrophically impaired before sending Ms. Innes to four further assessments. In the five months preceding the requests for examinations on catastrophic impairment, Intact had received five reports arising from in-person examinations before a neurologist, an orthopedic surgeon, a psychologist, a general practitioner and a physiotherapist, all chosen by Intact. Thus the proposed examinations to determine catastrophic impairment were redundant. Further, no information had been given as to why the insurer required an occupational therapist’s assessment.

Finally, Ms. Innes argued that Intact did not provide evidence that it had asked any of its recent section 42 assessors to opine on the catastrophic issue, based on results they obtained from the section 42 examinations to determine entitlement to post 104-week IRBs.

THE LAW:

The relevant provisions of the Schedule read as follows:

Determination of Catastrophic Impairment

40(1) An insured person who sustains an impairment as a result of an accident may apply to the insurer for a determination of whether the impairment is a catastrophic impairment.

(2) Within 30 days after receiving an application under subsection (1), the insurer shall give the insured person,

(a) a notice stating that the insurer has determined that the impairment is a catastrophic impairment; or

(b) a notice advising the insured person that the insurer requires the insured person to be examined under section 42 to assist the insurer in determining if the impairment is a catastrophic impairment. O. Reg. 546/05, s. 18.

Examination Required by Insurer

42(1) For the purposes of assisting an insurer determine if an insured person is or continues to be entitled to a benefit under this Regulation for which an application is made, an insurer may, as often as is reasonably necessary, require an insured person to be examined under this section by one or more persons chosen by the insurer who are members of a health profession or are social workers or who have expertise in vocational rehabilitation.

(2) Subsection (1) does not apply with respect to,

(a) a benefit to which section 37.1 applies, other than an amount claimed for ancillary goods or services referred to in section 37.2; or

(b) a funeral benefit or death benefit.

ANALYSIS:

Both parties referred me to the decision of Al-Shimasawi and Wawanesa Mutual Insurance Company¹ where the arbitrator provided a long and detailed summary of the most important principles and factors to consider in this type of motion. They can be paraphrased as follows:

1. the onus is on the insurer to establish that the proposed examination is reasonable;
2. The timing of the request;
3. The possible prejudice to both sides;
4. The nature and number of previous examinations and the nature of the examinations being requested;
5. Whether any new issues are being raised;
6. Whether there is a reasonable nexus between the examination requested and the applicant’s injuries.²

It is clear that not every factor enumerated in the Al-Shimasawi decision will be relevant in every case. The following are relevant to the circumstances of this case.

First, no arbitration hearing date has been set and there is no risk of delaying an upcoming arbitration. The requests for insurer’s examinations are likely not a matter of “trial brinkmanship” or pre-hearing jockeying for position.

Second, the current scheduled insurer’s examinations relate to a determination of catastrophic impairment. The previous and most recent insurer’s examinations were assessments to determine entitlement to post 104-week IRBs. Ms. Innes’ application for catastrophic impairment is based on ‘whole person impairment’. An examination of this nature is conducted as part of a multi-disciplinary assessment in compliance with and under the direction of the American Medical Association’s Guides to the Evaluation of Permanent Impairment.³ Although similar benefits may be claimed before and after a catastrophic determination (as suggested by Ms. Innes), an applicant would undergo a different assessment in a catastrophic determination than she would in an assessment for entitlement to post 104-week IRBs. The catastrophic assessments would not be a mere repeat of the previous assessments for post 104-week disability.

Therefore, I am not convinced that the information currently available from the section 42 examinations in regard to post 104-week IRBs would be sufficient to assess a claim for catastrophic impairment.

Third, I am not entirely convinced that Intact could have proceeded with a catastrophic assessment at any time based on section 42 of the Schedule (as suggested by Ms. Innes), and that having received notice in the form of Ms. Innes’ Application for an Approval of an Assessment or Examination (OCF-22) in December 2009, it should have immediately proceeded to combine its catastrophic assessments with its assessments on the post 104-week IRBs issue. Section 40 of the Schedule deals specifically with catastrophic determination, and that section allows an insurer 30 days after receiving an Application for a Catastrophic Determination to give the insured a notice to attend a section 42 assessment to determine if the person is catastrophically impaired.

Further, the receipt of an OCF-22 only informs the insurer that the applicant intends to undergo her own assessments for catastrophic impairment. The OCF-22 alone does not notify the insurer that the applicant has been determined to be catastrophically impaired. That determination cannot be known until the insurer receives the applicant’s own assessments. It is possible that an applicant might be determined to be not catastrophically impaired by her own assessors. Therefore, the scheme of the Schedule certainly suggests that an insurer could wait until it received the Application for a Determination of Catastrophic Impairment before trying to send the applicant to insurer’s examinations.

In the present case, at the time of the post 104-week IRB assessments, Ms. Innes had not filed her Application for a Determination of Catastrophic Impairment. That application only took place on May 3, 2010. Within 30 days, and as permitted by section 40, the insurer responded and requested that Ms. Innes attend assessments for catastrophic impairment.

Ms. Innes relied heavily on the decision of H.T. and Security National Insurance Co./Monnex Insurance Mgmt. Inc.⁴ to argue that an insurer must provide evidence as to why in-person examinations were contemplated and whether consideration had been given to the sufficiency of a paper review of existing medical documentation. With respect, most of the discussion in H.T. in regard to that requirement was obiter dicta.

In that decision, the arbitrator determined that the requested assessments for catastrophic impairment were neither reasonable nor necessary based on two grounds that are absent in the present case. The arbitrator found as follows:

I accept that on the evidence before me, H.T. has made a credible case that further assessments as planned would likely have caused her harm or increased the risk of suicide. I also accept that, as noted earlier, Security has an obligation in setting up the assessment of catastrophic impairment determination in such a way that any examinations at the very least do not harm H.T. Consequently, the further assessments outlined in the OCF-25 dated September 10, 2008 were not reasonable.

Nor were they necessary. It should be remembered that Dr. Jerome's psychiatric IE had not yet taken place at the time that the OCF-25 was signed. Security, had it acted promptly could have consulted Dr. Jerome and the other consultants with regard to catastrophic impairment, obviating the need for further examinations. [Italics mine]

Clearly, the arbitrator in H.T. decided that the proposed catastrophic examinations were neither reasonable nor necessary because (1): there was a risk to the insured of suicide, and (2): the application for catastrophic impairment preceded the date when the section 42 examination was conducted. In the instant case, there is no evidence that any prejudice might accrue to Ms. Innes (apart from the presumed inconvenience) if she were to attend further examinations. Further, her application for a catastrophic determination had not been filed until after the post 104-week IRB assessments were done. Unlike the H.T. case, it was not possible for the insurer to combine the post 104-week IRB assessments with the catastrophic assessments.

Further, much of the discussion in H.T. concerning the insurer’s obligation to present evidence as to whether a process other than an in-person catastrophic assessment was contemplated seemed to stem from the arbitrator’s attempt to address the risk to the insured. The arbitrator even observed that in most cases, an insurer would not have to present such evidence:

I note that in this matter there was no evidence as to why in-person examinations were contemplated, or even as to whether any consideration had been given to the sufficiency or not of a paper review.

In most situations, the lack of such an evidentiary foundation for assessment would not be critical. Indeed in the light of the psychological nature of the claim for catastrophic impairment, recourse to a psychological assessment would normally be understandable. In this case however, because of the unusual potential consequences of further assessment, the decision process becomes more critical …⁵ [italics mine]

The arbitrator in H.T. recognized the “normally understandable” requirement that there be a psychological component in a catastrophic assessment when the claim is of a “psychological nature”. It was the potentially unusual consequences in that case (the possibility of suicide) that convinced him the request was unreasonable.

Finally, even if H.T. were not so readily distinguishable on its facts, I am convinced by the comments in Dr. Levy’s letter⁶ that different assessments would be required for a catastrophic determination based on whole body impairment and the post 104-week IRB entitlement test.

CONCLUSIONS:

In the present case, I find the following:

First, the timing of the request is reasonable.

Second, a new issue, that of catastrophic impairment, has been raised. The tests and assessments for catastrophic impairment differ from those appropriate to a post 104-week IRB assessment. The insurer reasonably requires this information to assess the claim.

There is a reasonable nexus between the examinations requested and the applicant’s injuries.

The prejudice to Intact of being unable to properly assess Ms. Innes for a catastrophic impairment exceeds the prejudice to Ms. Innes of attending the assessments.

Therefore, I find that the requests for in-persons examinations with the persons named by Intact to assess catastrophic impairment are reasonable and necessary.

April 14, 2011

Edward Lee Arbitrator

ARBITRATION ORDER

Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

1. The in-person medical examinations proposed by the insurer are reasonably necessary to assist the insurer to determine if the applicant is catastrophically impaired.

2. The proceedings are stayed until Ms. Innes makes herself reasonably available for insurer’s examinations by Dr. Dost, Dr. Bordoff or J. Turgeon or any similarly qualified assessors who must be substituted for them in order to assist Intact to determine whether Ms. Innes has sustained a catastrophic impairment.

3. The examinations with these assessors must be scheduled for a date that is no later than 60 days from the date of this order.

4. The issue with respect to the expenses of this motion is deferred.

April 14, 2011

Edward Lee Arbitrator

Footnotes

1. 1(FSCO A05-0202737, at page 8)
2. 2Ibid at page 7
3. 3Letter of Dr. S. Levy dated December 6, 2010, Affidavit of Cindy Dermo, Tab D
4. 4(FSCO A08-002642, February 9, 2009)
5. 5See H.T. and Security National Ibid., at page 14
6. 6Supra Dr. Levy letter, Affidavit Cindy Dermo