Safety, Licensing Appeals and Standards Tribunals Ontario Licence Appeal Tribunal Automobile Accident Benefits Service Mailing Address: 77 Wellesley St. W., Box 250, Toronto ON M7A 1N3 In-Person Service: 20 Dundas St. W., Suite 530, Toronto ON M5G 2C2 Tel.: 416-314-4260 1-800-255-2214 TTY: 416-916-0548 1-844-403-5906 Fax: 416-325-1060 1-844-618-2566 Website: www.slasto.gov.on.ca/en/AABS

Tribunaux de la sécurité, des appels en matière de permis et des normes Ontario Tribunal d'appel en matière de permis Service d'aide relative aux indemnités d'accident automobile Adresse postale : 77, rue Wellesley Ouest, Boîte n^o^ 250, Toronto ON M7A 1N3 Adresse municipale : 20, rue Dundas Ouest, Bureau 530, Toronto ON M5G 2C2 Tél. : 416 314-4260 1 800 255-2214 ATS : 416 916-0548 1 844 403-5906 Téléc. : 416 325-1060 1 844 618-2566 Site Web : www.slasto.gov.on.ca/fr/AABS

RECONSIDERATION DECISION

Before: Linda P. Lamoureux, Executive Chair

Date: April 5, 2018

File: 16-003316/AABS

Case Name: T.F. v. Peel Mutual Insurance Company

Written Submissions By:

For the Applicant: David Donnelly

For the Respondent: Svet Ivanov

Overview

1. This request for reconsideration concerns the reasons that Peel Mutual Insurance Company (“Peel Mutual”) gave the applicant, T.F., for denying two Treatment and Assessment Plans and, at the same, scheduling two insurer examinations. More specifically, it assesses whether those reasons satisfied the notice requirements outlined in the Statutory Accident Benefits Schedule – Effective September 1, 2010.¹ The Licence Appeal Tribunal (the “Tribunal”) held that they did. On that basis, and given T.F.’s non-attendance at the examinations, the Tribunal therefore dismissed her application under s. 55 of the Schedule. However, as explained below, that decision was based on a significant error. I therefore grant T.F.’s request and order Peel Mutual to pay for the benefits at issue.

FACTS

The accident and its effects

2. On June 24, 2013, T.F. was injured in a motor vehicle accident when her vehicle was hit from behind as she attempted to turn into a gas station. The following month, she submitted an Application for Accident Benefits (OCF-1) to Peel Mutual, along with a Disability Certificate completed by Claudette Liske (Physiotherapist). Both documents indicated that, as a result of the accident, T.F.’s injuries prevented her from returning to work. Peel Mutual then began paying her an income replacement benefit, the details of which are irrelevant.

3. Indeed, the record repeatedly indicates that T.F. tried unsuccessfully to return to her job as a general labourer on a meatpacking line. It also makes clear that her injuries impaired her daily activities at home and on her farm, as well as caused her to struggle with depression. T.F.’s accident-related difficulties were addressed in a number of documents discussed further below.

The treatment plans at issue

4. The parties’ dispute concerns two OCF-18s.

5. Ms. Leanne Farrell (Occupational Therapist) completed the first OCF-18, following an Occupational Therapy Update report she authored on February 28, 2016. In her report, Ms. Farrell outlined T.F.’s continuing difficulties because of her accident-related injuries. Ultimately, she recommended that T.F. receive in-home occupational therapy to help her resume her activities of daily living and successfully return to work, along with certain additional assistive devices. Thus, Ms. Farrell completed an OCF-18 dated March 2, 2016, recommending that Peel Mutual fund T.F.’s occupational therapy and assistive devices at a cost of $4,216.46.

6. Notably, Ms. Farrell’s report also recommended that T.F. be referred for additional physiotherapy to address her epicondylitis (i.e., tennis elbow) and ongoing chronic back pain and reconditioning. She noted that this was consistent with a referral that Dr. Christopher Rowley (Physician) wrote on February 6, 2016, in which he indicated that T.F. should receive physiotherapy to “assess and treat for R tennis elbow, chronic back pain (from MVA) and deconditioning.” Ms. Farrell explained that, for these reasons, T.F. was “referred to Saugeen Physiotherapy”.

7. Hence, the second OCF-18, which Dianna Luack (Physiotherapist) of Saugeen Physiotherapy and Allied Health Centre completed on March 8, 2016. This second OCF-18 recommended that T.F. receive physiotherapy services totalling $2,383.65.

Peel Mutual’s denials and requests for IEs

8. By separate letters dated March 21, 2016, Peel Mutual denied each OCF-18 and requested an IE. In denying the first OCF-18 for occupational therapy treatment and assistive devices, Peel Mutual explained as follows:

The reason for this is that the medical documentation does not support the need for OT sessions as described in the OT report of February 28, 2016. The OT also appears not to be pursuing the plan that had been laid out by Mr. Bachman, Vocational Rehabilitation Specialist.

Given the lack of evidence, an Insurer’s Examination is required to address the [sic] eligibility for medical/rehabilitation benefits.

9. As part of this correspondence, Peel Mutual included a Notice of Examination indicating that it had scheduled T.F. for an in-home IE with an Occupational Therapist. This notice did not include any further explanation of why the IE was being scheduled.

10. Peel Mutual’s second denial was similarly brief. In denying the OCF-18 for physiotherapy, Peel Mutual offered the following:

The reason for this is that the clinical notes and records do not support the need for physiotherapy treatment. The diagnosis of epicondylitis does not appear to be MVA Related. You also failed to complete the work hardening program as recommended by the IE Assessor.

Given the lack of evidence an Insurer’s Examination is required to address eligibility for medical/rehabilitation benefits.

11. As part of this correspondence, Peel Mutual included a further Notice of Examination indicating that it had scheduled T.F. for an IE with a Physiotherapist. Like its first notice, this second notice did not include any further explanation justifying the IE’s need.

12. Confused, T.F. asked Peel Mutual to clarify the documentation upon which it was relying, and outlined in considerable detail how the information in its possession supported her requests for funding. She also took the position that Peel Mutual’s denials and notices of examination failed to comply with the Schedule’s notice requirements and, thus, that she was not obligated to attend the IEs. T.F. asked Peel Mutual to reconsider. It did not. All told, Peel Mutual refused to provide any further explanation and confirmed laconically that its position remained the same.

13. Neither of the IEs occurred. Instead, in August 2016, T.F. applied to the Tribunal to dispute her entitlement to the benefits in both OCFs.

The Tribunal’s decision

14. Following the parties’ case conference, T.F. made a preliminary motion. In short, she asked the Tribunal to determine whether Peel Mutual’s March 21, 2016 denials and requests for IEs complied with s. 38(8) and 44(5) of the Schedule, respectively. The Tribunal held that they did. Further, given T.F.’s non-attendance at the IEs, the Tribunal dismissed her application under s. 55 of the Schedule. That decision is discussed in further detail below.

15. T.F. now asks that I reconsider the Tribunal’s decision. In essence, T.F. argues that the Tribunal erred in applying the Schedule, and that Peel Mutual did not provide her with the requisite “medical reasons” explaining why the benefits at issue are not reasonable and necessary. I agree.

decision and Analysis

The notice requirement under s. 38(8)

16. I begin with the notice requirement under s. 38(8) of the Schedule. That section regulates the manner in which insurers must respond after receiving an OCF-18:

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 [emphasis mine].

17. This section embodies a significant development. Before September 1, 2010, insurers were not obligated to provide any reason when denying an OCF-18. Instead, under the Statutory Accident Benefits Schedule - Accidents on or After November 1, 1996,² they could simply deny the plan and require the insured person to attend an IE.³ That changed with the introduction of the current Schedule, which was enacted to reduce the cost of unnecessary IEs.⁴ Accordingly, IEs are no longer mandatory upon denial and, subject to important limits, are now at an insurer’s discretion. In turn, insurers must outline their medical and other reasons for denying a plan, an obligation that was also added in s. 44(5)(a) to qualify their ability to request an IE.

18. When it was first introduced, s. 38(8) required insurers to provide the “medical and any other reasons” justifying a denial [emphasis added]. In 2013, however, the government went further. It amended the section to obligate insurers to justify any plan’s denial with “the medical reasons and all of the other reasons”⁵ [emphasis added]. This was a small but telling change. The government obviously intended insurers to explain any denial of benefits with all applicable reasons. In doing so, it clearly sought to prevent insurers from denying treatment arbitrarily, ensure transparency in their decision-making and, most importantly, advance the Schedule’s ultimate aim: to ensure that injured persons have access to accident benefits as soon as possible – when they need them. As the Supreme Court of Canada has recognized, no fault insurance like the Schedule is “predicated upon the desire to provide accident benefits to all victims, regardless of fault, efficiently and expeditiously.”⁶

19. As for the precise “medical reasons” that insurers must now offer under s. 38(8), I repeat my recent comments in M.B. v. Aviva Insurance Canada.⁷ In that case, I considered the meaning of an insurer’s requirement under s. 44(5)(a) to provide the “medical and any other reasons” justifying a request for an IE. I explained how that requirement was “obviously part of a legislative trend that has obligated insurers to justify their requests for IEs with progressively greater detail and clarity,” and should therefore “be interpreted accordingly, particularly given the fact that the Schedule constitutes remedial and consumer protection legislation.”⁸ The same applies here. I also attempted to provide general guidance as to how an insurer satisfies its obligation to furnish its “medical and any other reasons” for requesting an IE:

In my view, an insurer satisfies its obligation to provide its “medical and any other reasons,” whether under s. 44(5)(a) or elsewhere, by explaining its decision with reference to the insured’s medical condition and any other applicable rationale. That explanation will turn on the unique facts at hand. Therefore, it would be unwise to attempt to outline a comprehensive approach to doing so. Nevertheless, an insurer’s “medical and any other reasons” should, at the very least, include specific details about the insured’s condition forming the basis for the insurer’s decision or, alternatively, identify information about the insured’s condition that the insurer does not have but requires. Additionally, an insurer should also refer to the specific benefit or determination at issue, along with any section of the Schedule upon which it relies. Ultimately, an insurer’s “medical and any other reasons” should be clear and sufficient enough to allow an unsophisticated person to make an informed decision to either accept or dispute the decision at issue. Only then will the explanation serve the Schedule’s consumer protection goal.

20. Again, although I made those comments in a different context, their substance is equally applicable to denials under s. 38(8).

21. The ultimate purpose underlying s. 38(8) is to require an insurer to respond to a treatment plan not only quickly but also reasonably, in a manner that respects an insured’s ability, when entitled, to access timely treatment. To that end, an insurer’s “medical reasons” for denying a plan should engage the specific details about the insured’s condition forming the basis for the insurer’s decision. They should also be adequate enough to allow an unsophisticated person to understand them and make an informed decision in response. Those entitled to accident benefits should not have to wonder why they are denied treatment. Nor should they have to incur the temporal, emotional, and financial costs associated with engaging the Tribunal in order to obtain the treatment they should have received long before. If s. 38(8) is to achieve its purpose, it must require insurers to accompany any denial of benefits with meaningful and accurate reasons based on an insured’s medical condition as described in the file at hand.

22. In evaluating the sufficiency of such notice, the Tribunal should be mindful of those who adjust insurance files. It would be naïve or impractical or to expect them to articulate something resembling a medical opinion. Likewise, their reasons should not be measured by the inch or held to a standard of perfection. Moreover, reasonable minds may disagree about the content of an insured’s file. Those allowances should be made. If it offers a principled rationale based fairly on an insured’s file, an insurer will have satisfied its obligation under s. 38(8).

Why the Tribunal erred

23. Peel Mutual fell short of that mark.

24. In reviewing Peel Mutual’s denial of the first OCF-18 for occupational therapy treatment and assistive devices, the Tribunal held, at paras. 22-25 as follows:

The respondent indicated the following in the denial letter:

“The reason for this [denial] is that the medical documentation does not support the need for OT sessions as described in the OT report of February 28, 2016. The OT also appears not be pursuing the plan that had been laid out by Mr. Bachman, Vocational Rehabilitation Specialist. Given the lack of evidence, an Insurer’s Examination is required to address the eligibility for medical/rehabilitation benefits.”

This letter indicates to me that the adjuster reviewed the medical documentation and came to a conclusion that the evidence does not support entitlement to occupational therapy services.

The applicant submits that the respondent refused to identify what medical documentation it relied on to deny the benefit.

I am of the view that an exhaustive list of the medical documentation that the respondent reviewed is not required to be listed in the denial letter. However, the respondent should be prepared to clarify such information if requested by the applicant.

25. For those reasons, the Tribunal held that Peel Mutual satisfied its notice obligation under s. 33(8).

26. I disagree.

27. The real substance of Peel Mutual’s decision was, of course, its opaque reference to the available “medical documentation.” Problematically, this reference offers no insight into Peel Mutual’s reasons for denying T.F. treatment. Indeed, the general assertion that the available medication documentation does not support T.F.’s need for occupational therapy offers no medical reason whatsoever. It is simply an unsupported conclusion. Instead, Peel Mutual should have drawn T.F.’s attention to the specific documentation, along with the relevant points therein, upon which it was relying. I agree with the Tribunal’s observation that an “exhaustive list” is not necessarily required. However, Peel Mutual failed to provide any detail about T.F.’s condition as described in the available documentation. That was fatal.

28. More problematically, the record before me suggests that the available documentation overwhelmingly supported T.F.’s need for the requested benefits. For example, there are the following:

• an October 31, 2014 Independent Orthopaedic Assessment report prepared by Dr. Charles Ikejiani (Consulting Orthopaedic Surgeon), who opined that T.F. had not reached maximum medical recovery and continued to suffer from lower back pain;

• a Disability Certificate that Dr. Christopher Rowley (Physician) completed in September 2014, recommending that T.F. receive ongoing physiotherapy and counselling;

• a December 3, 2014 letter written by Cynthia Deen (Occupational Therapist), who opined that it was “very unlikely” that T.F. would be able to return to her previous work and that “retraining may be her best option;”

• Dr. Rowley’s letter of February 3, 2015, indicating that T.F. had been through physiotherapy three times, that she was “in severe pain and barely able to walk,” and thus that he recommended that T.F. cease her “work hardening” through physiotherapy. Further, Dr. Rowley opined that it was “NOT POSSIBLE for [T.F.] to return to the level of strength and activity required for her to return to her previous employment,” and that there should be a “focus on re-training for a job with minimal physical requirements;”

• a March 27, 2015 Occupational Therapy In-Home Assessment Report prepared by Leanne Farrell (Occupational Therapist), along with an April 1, 2015 Treatment and Assessment Plan (OCF-18) in which Ms. Farrell recommended that T.F. receive occupational therapy and various assistive devices;

• Dr. Rowley’s letter of September 28, 2015, indicating that T.F. was “unable to tolerate a full day of any kind of physicality,” and that the “best solution” was for T.F. to receive support to undergo “education and retraining for non-physical labour;” and

• Ms. Farrell’s Occupational Therapy Update report of February 28, 2016, discussed above.

29. As such, Peel Mutual’s suggestion that the available medical documentation did not “support the need for OT sessions” was not a position that it was fairly or reasonably entitled to take, even if one were to allow for differences of opinion. Insurers are not entitled to rely on reasons that are incongruous or contrived in order to satisfy their notice obligations. Such an approach would not only be inconsistent with an insurer’s obligation to deal with those they insure in good faith, but would frustrate the Schedule’s purpose of ensuring that an insured person receives accurate and valid reasons for being denied treatment.

30. In effect, the Tribunal held that Peel Mutual satisfied its obligation under s. 38(8) by simply indicating that it had reviewed the available documentation and “came to a conclusion that the evidence does not support entitlement.” Such an approach undermines, if not nullifies, the important purposes underlying s. 38(8). Thus, I find that the Tribunal has committed a significant error of law in interpreting the Schedule and applying it to the facts of this case.

31. The same applies to Peel Mutual’s second denial. In reviewing Peel Mutual’s denial of the second OCF-18 for physiotherapy, the Tribunal held, at paras. 28-31 as follows:

The respondent indicated the following in the denial letter:

“The reason for this [denial] is that the clinical notes and records do not support the need for physiotherapy treatment. The diagnosis of epicondylitis does not appear to be MVA related. You also failed to complete the work hardening program as recommended by the IE assessor. Given the lack of evidence an Insurer’s Examination is required to address eligibility for medical/rehabilitation benefits.”

Once again, the claims adjuster indicated that it reviewed the clinical notes and records (“CNRs”) and concluded that the evidence does not support entitlement to the treatment plan.

I agree with the respondent that the diagnosis of epicondylitis is a medical reason that the claims adjuster determined required further investigation to assess eligibility.

The applicant submits that the respondent did not specify which CNRs it relied on to make its determination. I am of the view that in a denial letter, such a list is not required, but further clarification should be given if the applicant requests it.

32. Again, the real substance of Peel Mutual’s decision was that “the clinical notes and records do not support the need for physiotherapy treatment.” This was the same type of unsupported conclusion contained in Peel Mutual’s first notice. T.F. was entitled to know which clinical notes and records formed the basis of Peel Mutual’s opinion and, in some meaningful communication, what those clinical notes and records indicated about her condition. Unfortunately, Peel Mutual left her in the dark, even after she asked Peel Mutual to clarify its position. That was fatal.

33. Peel Mutual went some distance in satisfying its notice obligation by explaining that T.F.’s epicondylitis “does not appear to be MVA related,” and that she “failed to complete the work hardening program as recommended by the IE assessor.” However, some or partial compliance with the Schedule is not enough. Moreover, Peel Mutual’s explanation ignored the fact that the OCF-18 was intended to address T.F.’s lower back pain. It is unclear from Peel Mutual’s notice why T.F. is not entitled to have that treated, other than perhaps the general and inadequate assertion that “the clinical notes and records do not support the need for physiotherapy treatment.”

34. For these reasons, I find that the Tribunal committed a significant error in misapplying the Schedule, and that Peel Mutual did not satisfy its notice obligation under s. 38(8).

Remedy

35. Given these findings, the consequence outlined in s. 38(11)2 applies:

If the insurer fails to give a notice in accordance with subsection (8) in connection with a treatment and assessment plan, the following rules apply:

2. The insurer shall pay for all goods, services, assessments and examinations described in the treatment and assessment plan that relate to the period starting on the 11th business day after the day the insurer received the application and ending on the day the insurer gives a notice described in subsection (8).

3. This section reinforces the important purposes underlying s. 38(8). As mentioned above, the ultimate purpose underlying s. 38(8) is to require insurers to respond to a treatment plan quickly and reasonably. The failure to do so has serious consequences.⁹ There would be no incentive to properly deny a treatment and assessment plan if those consequences did not exist.¹⁰

4. There is no evidence before me to suggest that Peel Mutual has ever cured its defective notice. To the contrary, Peel Mutual refused to provide T.F. with any further explanation for its denials. Thus, for the reasons I expressed in M.F.Z. v Aviva Insurance Canada,¹¹ I need not determine whether the benefits in dispute are reasonable and necessary. Peel Mutual must pay for them. However, even if I were required to make that determination, I would have no difficulty finding that the benefits T.F. seeks are reasonable and necessary. Their need is clearly supported on the record, including the evidence mentioned in para. 28 above, and they involve reasonable attempts to both treat T.F.’s accident-related injuries and help her secure alternate employment.

5. Given the operability of s. 38(11)2, there is also no need for me to consider whether Peel Mutual’s notice complied with s. 44(5). If I were required to make that determination, I would also have found Peel Mutual’s notices insufficient for the same central reason discussed above: they provided no meaningful detail about the specific documentation at hand and the information concerning T.F.’s condition described or lacking therein making an IE reasonably necessary.

Award under O. Reg. 664

39. The case conference order giving rise to the parties’ preliminary issue hearing suggested that one of the issues in dispute was whether T.F. was entitled to a special award under s. 10 of O. Reg. 664 made under the Insurance Act.¹² Her submissions throughout this proceeding, however, did not argue in any direct or serious way why she should receive such an award. At best, she impliedly suggests Peel Mutual’s failure to fulfil is notice obligations under the Schedule automatically entitles her to an award.

40. I disagree. Despite Peel Mutual’s failure to comply with its notice obligations under the Schedule, I see no conduct that attract such an extraordinary remedy.

Order

41. I therefore cancel the Tribunal’s order, and order Peel Mutual to pay for the benefits included in the plans in dispute, along with interest thereon.

Linda P. Lamoureux

Executive Chair

Safety, Licensing Appeals and Standards Tribunals Ontario

Released: April 5, 2018

Footnotes

1. 1O Reg 34/10.
2. 2O. Reg. 403/96.
3. 3Ibid., s. 38(8)1.iii.
4. 4See, generally, Augustin v. Unifund Insurance Company, FSCO A12-000452.
5. 5O. Reg. 14/13, s. 5. I note that the same change was not made to s. 44(5)(a), arguably making the test under the s. 38(8) more stringent. However, I place no emphasis on that point in this decision.
6. 6Peixeiro v. Haberman, 1997 CanLII 325 (SCC), [1997] 3 S.C.R. 549, at para. 22, quoting Prof. Lewis Klar, “No Fault Insurance for Auto Accident Victims: A Background Paper”, Canadian Bar Association 1991.
7. 72017 CanLII 87160 (ON LAT).
8. 8See para. 23.
9. 9See M.F.Z. v Aviva Insurance Canada, 2017 CanLII 63632 (ON LAT) at para. 34 et seq.
10. 1017-000317 v Aviva Insurance Canada, 2018 CanLII 13185 (ON LAT) at para. 85.
11. 11Supra note 9, para. 58 et seq.
12. 12R.S.O. 1990, c. I.8.