Financial Services Commission des Commission services financiers of Ontario de l’Ontario

Neutral Citation: 2017 ONFSCDRS 196

FSCO A16-003615

BETWEEN:

YOAV OZERI

Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

Insurer

DECISION ON A PRELIMINARY ISSUE

Before:

Arbitrator Paulina Gueller

Heard:

In person at ADR Chambers on April 27, 2017 and by written submissions completed May 11, 2017

Appearances:

Mr. Yoav Ozeri, Applicant, did not participate Mr. Alon Rooz, Lawyer, represented Mr. Yoav Ozeri Mr. Kapil Gautam, Adjuster, participated for State Farm Mutual Automobile Insurance Company Ms. Viktoria Anteby, Lawyer, represented State Farm Mutual Automobile Insurance Company

Issues:

The Applicant, Mr. Yoav Ozeri, was injured in a motor vehicle accident on August 2, 2014 and sought accident benefits from State Farm Mutual Automobile Insurance Company (“State Farm”), payable under the Schedule.¹ The parties were unable to resolve their disputes through mediation, and Mr. Ozeri, through his representative, applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act (“the Act”), R.S.O. 1990, c. I.8, as amended.

The issues in this Preliminary Issue Hearing are:

1. Is Mr. Ozeri precluded from proceeding to Arbitration regarding the following issues in dispute, for failure to attend Section 44 Insurer’s Examinations (“IEs”) pursuant to Section 55(2) of the Schedule:

i. $2,008.50 for an OCF-18 Treatment Plan for Physical Therapy, service provider Dr. Aliya Salayeva of Health-Pro Wellness, dated March 26, 2015;

ii. $1,375.62 for an OCF-18 Treatment Plan for Orthotics, service provider Dr. Aliya Salayeva of Health-Pro Wellness, dated March 26, 2015;

iii. $1,994.35 for an OCF-18 for a Chronic Pain Assessment submitted by Dr. Aliya Salayeva of Health-Pro Wellness, dated June 3, 2015;

iv. $1,518.03 for an OCF-18 for a Home Exercise Program submitted by Dr. Aliya Salayeva of Health-Pro Wellness, dated June 23, 2015; and

v. $357.19 per month for Attendant Care Benefits (“ACBs”), from August 2, 2014 to date and ongoing, detailed in a Form 1, dated July 17, 2015?

2. Is either party entitled to its expenses of the Preliminary Issue Hearing?

Result:

1. Mr. Ozeri is precluded from initiating mediation proceedings pursuant to Section 55(2) of the Schedule, due to his failure or refusal to attend IEs in accordance with Section 44 of the Schedule. Accordingly, he may not arbitrate the following issues:

i. $2,008.50 for an OCF-18 Treatment Plan for Physical Therapy, service provider Dr. Aliya Salayeva of Health-Pro Wellness, dated March 26, 2015;

ii. $1,375.62 for an OCF-18 Treatment Plan for Orthotics, service provider Dr. Aliya Salayeva of Health-Pro Wellness, dated March 26, 2015;

iii. $1,994.35 for an OCF-18 for a Chronic Pain Assessment, submitted by Dr. Aliya Salayeva of Health-Pro Wellness, dated June 3, 2015;

iv. $1,518.03 for an OCF-18 for a Home Exercise Program, submitted by Dr. Aliya Salayeva of Health-Pro Wellness, dated June 23, 2015; and

v. $357.19 per month for ACBs, from August 2, 2014 to date and ongoing, detailed in a Form 1, dated July 17, 2015.

2. The question of expenses related to this Preliminary Issue Hearing is deferred to the Hearing Arbitrator.

EVIDENCE AND ANALYSIS:

THE INSURER’S POSITION

The Insurer submits that:

a) The Treatment Plan, dated March 26, 2015, was first denied because Mr. Ozeri did not attend an IE scheduled with Orthopedic Surgeon, Dr. Osama Gharsa, of Soma Assessments on Tuesday, May 5, 2015;

b) On July 8, 2015, the Applicant was advised that another IE with Orthopedic Surgeon, Dr. Paul Marks, of Soma Assessments was scheduled for Tuesday July 21, 2015, regarding the Treatment Plans, dated March 26 (x2), June 3 and June 23, 2015. On July 14, 2015, the Applicant was reminded of his pending IE scheduled on July 21, 2015. The Applicant failed to attend the scheduled IE on July 21, 2015;

c) On July 27, 2015, the Insurer advised that the four Treatment Plans were denied as the Applicant refused to comply with Section 44 of the Schedule and advised the Applicant that Section 55 of the Schedule states that an insured person shall not commence a mediation proceeding under Section 280 of the Act unless the insured person has complied with Section 44 of the Schedule;

d) On December 11, 2015, the Applicant’s counsel advised the Insurer that the Applicant was prepared to attend the IE. Subsequently, on December 31, 2015, the Insurer again scheduled an IE with Dr. Marks for February 2, 2016, regarding the four Treatment Plans;

e) On January 15, 2016, the Applicant’s counsel requested re-scheduling the February 2, 2016 IE, and requested transportation for the Applicant. The Insurer submits that on February 1, 2016, the IE was rescheduled to March 15, 2016;

f) The Insurer also submits that on March 15, 2016, when Rapid City Transport went to pick up the Applicant, no one answered the door. Rapid City Transport phoned the Applicant and was advised that the Applicant would not attend the IE, without reason;

g) On March 17, 2016, the Insurer advised the Applicant that the OCF-18s, dated March 26 (x2), June 3 and June 23, 2015, were denied, as the Applicant failed or refused to comply with the Section 44 IE on March 15, 2016.

ACBs

The Insurer further submits that:

a) On July 17, 2015, Yana Granovsky (RN) of Health-Pro Wellness submitted a Form 1 for ACBs at $357.19 per month. The Applicant did not attend the Section 44 IE scheduled for September 15, 2015. Consequently, State Farm denied the benefit;

b) The Applicant’s counsel advised on December 11, 2015, that the Applicant would attend the IE;

c) State Farm scheduled another In-Home Assessment for January 12, 2016, to be conducted by Ms. Lorolie Royer from Soma Assessments. Ms. Royer advised that she attended at the Applicant’s address, but no one answered the door. Consequently, the Insurer advised the Applicant that ACBs were denied for failure to comply with Section 44.

The Insurer advised the Applicant that Section 55 of the Schedule states that an insured person shall not commence a mediation proceeding unless that person has complied with Section 44.

The Insurer submits that the Applicant did not attend the IEs regarding Medical and Rehabilitation Benefits and ACBs.

The Insurer also submits that Arbitrator Newland found that notice of denial would be adequate if the Insurer provides the best medical reason possible, given the amount of information it possessed at the time.²

The Insurer submits that on March 9, 2016, mediation was conducted, and the Insurer raised a Preliminary Issue pursuant to Section 55(2) of the Schedule, as the Applicant ignored the Schedule and commenced mediation without ever having attended the IEs.

THE APPLICANT’S POSITION

The Applicant submits that Section 38 of the Schedule requires an Insurer to provide medical and other reasons for denying Medical and Rehabilitation Benefits. In all its responses, the Insurer failed to provide meaningful reasons for denying Medical and Rehabilitation Benefits, and instead, only used general terms explaining denials. The Applicant also submits that the Insurer’s position when denying Treatment Plans was that the Applicant’s Treatment Plans were not reasonable and necessary.

The Applicant submits that:

a) Section 38(8) of the Schedule requires the Insurer to provide the Applicant with medically-supported reasons for the denial of Medical and Rehabilitation Benefits;

b) It is not within an Insurer’s adjuster’s right to second-guess the medical findings of qualified health professionals and make determinations of the Applicant’s medical condition;

c) Medical findings should be made solely by qualified health professionals;

d) The legal test is that the reasons given by an Insurer for denying benefits must be sufficient to permit the Insured to decide whether to challenge the Insurer’s denial;³

e) The Insurer has a duty to make its inquiry and provide an unbiased determination to the Insured, advising the Insured with the full particulars as to how it came to its decision;⁴

f) The Insurer used generic statements in its denials;

g) The Insurer’s denial notices were deficient, as they were based on the Applicant’s attendance at an IE to determine whether the Treatment Plan is reasonable and necessary. This does not relieve the Insurer from the obligation to include in its notice “medical and any other reasons”;

h) None of the Insurer's notices to schedule or reschedule IEs offered to accommodate the Applicant pursuant Section 44(9)(2)(i) of the Schedule;

i) The alleged missed IEs were not missed, as there was no confirmation from the Applicant;

j) The Applicant sent two letters to the Insurer, advising he was prepared to attend IEs as long as a list of the proposed assessments, assessors, dates, times and locations was provided;

k) The Applicant asked the Insurer to provide three available dates and times so both parties could avoid going back and forth in scheduling dates;

l) An offer of availability to attend IEs effectively cures non-compliance with obligations when an Insurer refuses their own IE;⁵

m) The Insurer should not schedule IEs more often than is reasonable;

n) One must look at the sufficiency of the notice itself. The test is objective. The onus is on the Insurer to establish that the Applicant has received the proper notice. An Applicant is entitled to ignore improper denials as the Applicant does not owe the Insurer the same duties the Insurer owes the Applicant;

o) On receiving an application, the Insurer’s obligations are to conduct a proper investigation, adjust the file in a fair and even manner and to assess and critically examine the medical evidence and opinions.⁶

THE LAW

Examination Required by Insurer

44. (1) For the purposes of assisting an insurer to determine if an insured person is or continues to be entitled to a benefit under this Regulation for which an application is made, but not more often than is reasonably necessary, an insurer may require an insured person to be examined under this section by one or more persons chosen by the insurer who are regulated health professionals or who have expertise in vocational rehabilitation. O. Reg. 34/10, s. 44 (1).

(5) If the insurer requires an examination under this section, the insurer shall arrange for the examination at its expense and shall give the insured person a notice setting out,

(a) the medical and any other reasons for the examination;

(b) whether the attendance of the insured person is required at the examination;

(c) The name of the person or persons who will conduct the examination, any regulated health profession to which they belong and their titles and designations indicating their specialization, if any, in their professions; and

(d) if the attendance of the insured person is required at the examination, the day, time and location of the examination and, if the examination will require more than one day, the same information for the subsequent days. O. Reg. 34/10, s. 44 (5).

(6) If the attendance of the insured person is required at the examination, the insurer shall give the notice required under subsection (5) not less than five business days before the examination, unless the insured person and the insurer mutually agree otherwise. O. Reg. 34/10, s. 44 (6).

(9) The following rules apply in respect of the examination:

2. If the attendance of the insured is required:

i. the insurer shall make reasonable efforts to schedule the examination for a day, time and location that are convenient for the insured person,

ii. The insured person and the insurer shall, not later than five business days before the day scheduled for the examination, provide to the person or persons conducting the examination such information and documents as are relevant or necessary for the review of the insured person’s medical condition, and

iii. The insured person shall attend the examination and submit to all reasonable physical, psychological, mental and functional examinations requested by the person or persons conducting the examination.

3. If the examination relates to an application for attendant care benefits, the report of the examination must include an assessment of attendant care needs prepared in accordance with section 42. O. Reg. 34/10, s. 44 (9).

Mediation Proceeding

55. An insured person shall not commence a mediation proceeding under section 280 of the [Insurance Act]⁷ if any of the following circumstances exist:

56. The insurer has provided the insured person with notice in accordance with this Regulation that it requires an examination under section 44, but the insured person has not complied with that section.

Claims for Medical and Rehabilitation Benefits and for approval of assessments, etc.

38. (1) This section applies to,

(a) medical and rehabilitation benefits other than benefits payable in accordance with the Minor Injury Guideline; and

(b) all applications for approval of assessments or examinations. O. Reg. 34/10, s. 38 (1).

(8) Within 10 business days after it receives the treatment and assessment plan, the insurer shall give the insured person a notice that identifies the goods, services, assessments and examinations described in the treatment and assessment plan that the insurer agrees to pay for, any the insurer does not agree to pay for and the medical reasons and all of the other reasons why the insurer considers any goods, services, assessments and examinations, or the proposed costs of them, not to be reasonable and necessary. O. Reg. 34/10, s. 38 (8); O. Reg. 14/13, s. 5.

(10) If the insurer has not agreed to pay for all goods, services, assessments and examinations described in the treatment and assessment plan or believes that the Minor Injury Guideline applies to the insured person’s impairment, the notice under subsection (8) may notify the insured person that the insurer requires the insured person to undergo an examination under section 44. O. Reg. 34/10, s. 38 (10).

ANALYSIS AND DECISION

Section 38(8) of the Schedule requires the Insurer to give proper notice to the insured person about any Treatment and Assessment Plan that the Insurer does not agree to pay for, along with the medical reasons, and all other reasons why the Treatment Plans are not reasonable and necessary.

Section 38(10) of the Schedule states that the notice under Section 38(8) may require the Insured person to undergo an IE under Section 44.

Section 44 of the Schedule sets out that the Insurer is entitled to give notice requiring an examination to assist the Insurer with determining if the Insured is entitled to a benefit.

Section 55(2) of the Schedule states that an insured person shall not commence a mediation proceeding if the Insurer has provided notice in accordance with Section 44 of the Schedule, but the insured person has not complied with Section 44.

In the present case, the Applicant submits that the notices given by the Insurer were not in compliance with the Schedule for various reasons, but mainly for not providing “medical reasons” and requesting IEs to assess the insured person further.

The OCF-9, dated April 7, 2015, submitted by the Insurer, states that the treatment was refused because “pre-existing medical conditions exist that affects your care, treatment and prognosis and the treatment focuses on passive care without an active rehabilitation phase.”

At Tab C of the Insurer’s submissions is a Paperwork Summary from Health-Pro Wellness, dated August 7, 2014 to September 15, 2015, showing that several other OCF-18 were approved by the Insurer.

I define a “pre-existing condition” as any medical condition that a person has before the motor vehicle accident. I find that a “pre-existing condition” is an objective standard of any condition or symptom for which medical advice, diagnosis, or treatment was recommended or received by a doctor or other practitioner at any time before the motor vehicle accident.

Therefore, I find that the Insurer did not fail to provide a medical reason. The pre-existing condition was the medical reason to request further investigation. The adjuster is not a medical expert that can provide medical reasons. Consequently, I accept the Insurer’s submissions that requesting IEs to determine if the Applicant is or continues to be entitled to a benefit is reasonable.

I find that the Insurer has complied with Section 38(8) of the Schedule as it identified there were pre-existing medical conditions that could affect whether the proposed Treatment Plans were reasonable and necessary.

The law requires treatments to be reasonable and necessary (emphasis added). While a Treatment Plan proposed by the Insured may seem reasonable, the Insurer has the right to investigate the need for it and whether or not it is related to the motor vehicle accident.

I am satisfied that the Insurer provided sufficient medical reasons in its Notices of Examination, and the notices were in compliance with the Schedule.

I also take into consideration that the Applicant was represented by legal counsel. At no time before the exchange of submissions for this Preliminary Issue Hearing did the Applicant complain about the Insurer’s notices. The Applicant’s counsel advised the Insurer in December 2015 that the Applicant was ready to attend the IEs, and in January 2016, Applicant’s counsel requested the rescheduling of the IEs without raising any issue at either opportunity.

I agree with Arbitrator Kelly that:

Since that assurance was consistently conveyed after the respective notices were received by each Applicant; it was equivalent to an undertaking that the notice itself was not being placed in issue, and would not be placed in issue at some future time. Just as the Insurer, under the SABS, has the power to relieve the Applicant from strict adherence to some of the procedural directives (and for that matter even limitation period), so does the Applicant have the same power, particularly when represented by a qualified representative. The concept of ambush is antithetical to the openness and straight-dealing that underpins the governing philosophy of the SABS.⁸

I find that the Applicant did not reasonably justify his non-attendance at the scheduled IEs. The Applicant deprived the Insurer of assessing the Treatment Plans by not cooperating.

The Applicant failed to attend four IEs. Consequently, the Applicant is precluded from commencing a mediation proceeding pursuant to Section 55(2) of the Schedule regarding the following Medical and Rehabilitation Benefits and ACBs:

1. $2,008.50 for an OCF-18 Treatment Plan for Physical Therapy, service provider Dr. Aliya Salayeva of Health-Pro Wellness, dated March 26, 2015;

2. $1,375.62 for an OCF-18 Treatment Plan for Orthotics, service provider Dr. Aliya Salayeva of Health-Pro Wellness, dated March 26, 2015;

3. $1,994.35 for an OCF-18 for a Chronic Pain Assessment, submitted by Dr. Aliya Salayeva of Health-Pro Wellness, dated June 3, 2015;

4. $1,518.03 for an OCF-18 for a Home Exercise Program, submitted by Dr. Aliya Salayeva of Health-Pro Wellness, dated June 23, 2015;

5. $357.19 per month for ACBs, from August 2, 2014 to date and ongoing, detailed in Form 1, dated July 17, 2015.

This file still contains other issues in dispute. I direct the parties to provide new Hearing dates to ADR Chambers within 20 days of the date of this decision. Please note that the Hearing dates shall be scheduled for no later than November 30, 2017.

EXPENSES:

The question of expenses related to this Preliminary Issue Hearing is deferred to the Hearing Arbitrator.

July 10, 2017

Paulina Gueller Arbitrator

Date

Financial Services Commission des Commission services financiers of Ontario de l’Ontario

Neutral Citation: 2017 ONFSCDRS 196

FSCO A16-003615

BETWEEN:

YOAV OZERI

Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

Insurer

ARBITRATION ORDER

Under section 282 of the Insurance Act, R.S.O. 1990, c. I.8, as it read immediately before being amended by Schedule 3 to the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014, and Ontario Regulation 664, as amended, it is ordered that:

1. Mr. Ozeri is precluded from initiating mediation proceedings pursuant to Section 55(2) of the Schedule, due to his failure or refusal to attend Insurer’s Examinations in accordance with Section 44 of the Schedule. Accordingly, he may not arbitrate the following issues:

i. $2,008.50 for an OCF-18 Treatment Plan for Physical Therapy, service provider Dr. Aliya Salayeva of Health-Pro Wellness, dated March 26, 2015;

ii. $1,375.62 for an OCF-18 Treatment Plan for Orthotics, service provider Dr. Aliya Salayeva of Health-Pro Wellness, dated March 26, 2015;

iii. $1,994.35 for an OCF-18 for a Chronic Pain Assessment, submitted by Dr. Aliya Salayeva of Health-Pro Wellness, dated June 3, 2015;

iv. $1,518.03 for an OCF-18 for Home Exercise Program, submitted by Dr. Aliya Salayeva of Health-Pro Wellness, dated June 23, 2015; and

v. $357.19 per month for Attendant Care Benefits, from August 2, 2014 to date and ongoing, detailed in a Form 1, dated July 17, 2015.

2. The question of expenses related to this Preliminary Issue Hearing is deferred to the Hearing Arbitrator.

July 10, 2017

Paulina Gueller Arbitrator

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule - Effective September 1, 2010, Ontario Regulation 34/10, as amended.
2. 2Insurer’s Tab C: Gao and State Farm Mutual Automobile Insurance Company (FSCO A13-002281), at p. 19.
3. 3Applicant’s Index Tab 8: Klimitz and Allstate Insurance Company of Canada, at pp. 8-10.
4. 4Applicant’s Index Tab 4: Augustin and Unifund Assurance Company, at p. 7.
5. 5Applicant’s Index Tab 6, Hashi and Security National Insurance Co./Monnex Insurance Mgmt. Inc., at p. 5.
6. 6Applicant’s Index Tab 9, Maas and State Farm Mutual Automobile Insurance Company, at para. 124; Tab 10, Personal Insurance Company of Canada and Hoang, at p. 7; Tab 7, Federico and State Farm Mutual Automobile Insurance Company, at para. 7; and Cowans and Motors Insurance Corporation, at p. 66.
7. 7Insurance Act, R.S.O. 1990, Chapter I.8.
8. 8Insurer’s Book of Authorities Tab D: Zhang & Wen and Security National Insurance Co./Monnex Insurance Mgmt. Inc. (FSCO A13-003889 & A13-003890), at p. 11.