RECONSIDERATION DECISION
Before:
Michael Beauchesne
Licence Appeal Tribunal File Number:
22-000790/AABS
Case Name:
[JG] v. BelairDirect
Written Submissions by:
For the Applicant:
Gordon Harris, Counsel
For the Respondent:
Darrell March, Counsel
OVERVIEW
[ 1 ] On July 8, 2024, the respondent requested reconsideration of the Tribunal’s decision dated June 17, 2024 (“decision”).
[ 2 ] The decision ordered the respondent to pay the balance of treatment hours plus interest owing for both disputed psychotherapy OCF-18s at the hourly rate of $99.75, as well as payment of all goods, services, assessments, and examinations proposed in the OCF-18 for catastrophic impairment determination per section 38(11)2 of the Schedule.
[ 3 ] For context, the main dispute in this case was centered on whether the respondent’s notice of denial for six items listed in the OCF-18 for a catastrophic impairment determination assessment complied with the Schedule. The applicant’s position was that the respondent was required by section 38(8) of the Schedule to provide a medical reason for its denial and failed to do so. The respondent argued that two of the denied items on the OCF-18 were not payable pursuant to section 25 of the Schedule and the applicable Guidelines. For the remaining four items, the respondent argued the non-medical reasons it provided in its denial notice were sufficient to comply with the Schedule. I found that section 38(8) should be strictly interpreted as requiring the respondent to provide a medical reason for denial in addition to any other reasons.
[ 4 ] The grounds for a request for reconsideration are found in Rule 18.2 of the Licence Appeal Tribunal Rules, 2023 (“Rules”). To grant a request for reconsideration, the Tribunal must be satisfied that one or more of the following criteria are met:
a) The Tribunal acted outside its jurisdiction or committed a material breach of procedural fairness;
b) The Tribunal made an error of law or fact such that the Tribunal would likely have reached a different result had the error not been made; or
c) There is evidence that was not before the Tribunal when rendering its decision, could not have been obtained previously by the party now seeking to introduce it, and would likely have affected the result.
[ 5 ] In this case, the respondent is arguing criteria (b) as outlined in Rule 18.2.
[ 6 ] I find the respondent did not clearly outline what relief it is requesting from the Tribunal in its reconsideration request submissions and reply. Based on Rule 18.4, I conclude the respondent is requesting the Tribunal either confirm, vary, or cancel its decision, or order a rehearing on all or part of the matter.
RESULT
[ 7 ] Paragraphs 4(2) and 58 (ii) of the decision are ordered varied to read: “Payment of $6,780.00 for all incurred goods, services, assessments, and examinations proposed in the OCF-18 for catastrophic impairment determination per section 38(11)2 of the Schedule, plus interest per section 51 of the Schedule.”
[ 8 ] The respondent’s request for reconsideration is otherwise dismissed.
ANALYSIS
[ 9 ] The test for reconsideration under Rule 18.2 involves a high threshold. The reconsideration process is not an opportunity for a party to re-litigate its position where it disagrees with the Tribunal’s decision, or with the weight assigned to the evidence. The requestor must show how or why the decision falls into one of the categories in Rule 18.2.
Rule 18.2(b): The Tribunal made an error of law or fact such that the Tribunal would likely have reached a different result had the error not been made.
[ 10 ] I find I did not make an error of law or fact, such that I would likely have reached a different result had the error not been made.
[ 11 ] The respondent contends I made two errors in my decision. These pertain to: (i) the compliance of the respondent’s denial notice with section 38(8) of the Schedule; and (ii) restricting the respondent’s liability under section 38(11) of the Schedule to benefits that have been incurred. I will deal with each separately.
Error 1: Adequacy of the respondent’s denial notice
[ 12 ] The respondent submits I incorrectly held that the denial notice pertaining to the catastrophic impairment determination treatment plan (“OCF-18”) was inadequate, and therefore improperly applied section 38(11)2 of the Schedule. The respondent argues that a contextual analysis of the notice is required here, as opposed to the technical analysis I applied in the decision. The respondent contends that if I applied a contextual analysis to the applicant’s arguments, which is proper, I would have likely reached a different result. The respondent also contends that I erred in accepting the applicant’s position on medical reasons because she did not point to evidence to support her argument.
[ 13 ] To show that section 38(8) of the Schedule requires a contextual analysis and not a technical analysis, the respondent relies on: Tran vs. Certas Home and Auto Insurance Company, 2023 CanLII 23546 ON LAT (“Tran”); Hedley v. Aviva Insurance Company of Canada, 2019 ONSC 5318; 16-003316/AABS v. Peel Mutual Insurance Company, 2018 CanLII 39373 ON LAT (“Peel”), Sidhu v TD General Insurance Company, 2020 CanLII 94816 ONLAT (“Sidhu”); and Varriano v. Allstate Insurance Company of Canada, 2023 ONCA 78.
[ 14 ] The applicant relies on Kwan v. Unica, 2022 CanLII 93708 ON LAT (“Kwan”) to argue that the respondent’s request for reconsideration improperly attempts to re-litigate its case. The applicant also contends that I did not commit any errors of law or fact pertaining to my finding that the respondent’s denial notice was deficient, and relies on Caselle v. Aviva, 2023 CanLII 119834 ON LAT (“Caselle”), M.R. v. Aviva, 2020 CanLII 63589 ON LAT (“M.R.”), and Sahil v. Certas, 2022 CanLII 98056 ON LAT (“Sahil”) to support her position. The applicant requests that the respondent’s arguments about the adequacy of its denial notice be dismissed.
[ 15 ] I disagree that I made an error of law or fact as it pertains to the applicant’s onus to show the respondent’s denial notice is inadequate. For context, the OCF-18 for catastrophic impairment determination assessment included 12 line items, of which the respondent approved six at a cost of $10,149.61 before tax. The respondent denied approval of five line items that cost $10,000.00 before tax. The respondent partially approved Line item 11. Details of these line items and the reasons for denial appear in the following table:
OCF-18 line-item description
Reason for denial
Line 1: Psychological impairment review for assessment planning, including file review and psychologist interview ($2,000.00)
“A medical file review is not covered under section 25(5)”
Line 2: Physical estimate of WPI for assessment planning, including file review, determination of assessment team composition and requirements, and team consultation with directing physician ($2,000.00)
“Two separate assessments are not required to evaluate whole person impairment.” (i.e., Line 8 WPI evaluation)
Line 4: Psychological testing, including symptom severity testing and validity measures, analysis of data, and further review and analysis of data from prior assessors ($2,000.00)
“This should be included as part of the assessment” (i.e., this was already approved as part of Line 3 for a mental health assessment)
Line 7: Functional evaluation including analysis and integration of all sources of psychological assessment data, including direct behavioural observations and collateral functional observations.
“A functional abilities evaluation is not required to determine catastrophic impairment”
Line 10: A review by the directing physician and final determination of catastrophic assessment, including review of team findings, a quality assurance overview, and final confirmation of impairment ratings ($2,000.00)
“This should be included in the executive summary approved in Line 9” (i.e., Line 9 is an Executive Summary including integration of all findings, etc.)
Line 11: Completion of the OCF-18 assessment application ($200.00)
“One hour of the practitioners (sic) time is approved at the FSCO hourly rate”
[ 16 ] In its reconsideration request submissions, the respondent suggests I erred in accepting the applicant’s argument on medical reasons because he did not point to evidence of deficiencies to support his argument. The respondent explains that I rejected the other aspects of applicant’s position because he failed to lead evidence that showed the notice did not have a complete and detailed account of which and why some assessments were denied in a clear, specific format that would be easily understood. The respondent therefore reasons that I should have similarly rejected the applicant’s arguments as they pertained to the respondent’s failure to provide medical reasons.
[ 17 ] I disagree. The respondent’s argument makes little sense because a party cannot be expected to point to examples of deficiencies that do not exist. As I point out at paragraph 44 of the decision, the applicant submitted the denial notice was deficient because, among other things, no medical reasons were provided for the denial. It therefore follows, that if no medical reasons were provided to deny the OCF-18, which the respondent concedes in its reconsideration request submissions, the applicant cannot be expected to point to examples.
[ 18 ] I now turn to the authorities relied upon by the parties to support their respective positions on the validity of the respondent’s notice.
Tran
19The respondent points to Tran, a Tribunal decision that addresses the adequacy of a denial notice per section 38(8) of the Schedule. In Tran, the applicant argued that the respondent’s notice was inadequate because it offered a “boilerplate” reason that was not meaningful (i.e., “This recommendation does not fit with the loss details so I cannot approve it.”).
[ 20 ] The respondent submits Tran is analogous to this case because it concerns a denial notice that did not provide medical reasons. The respondent explains that the Tribunal held the notice was valid because the reason provided by the insurer was more than adequate to be meaningful. The respondent asserts that its reasons were more detailed than those considered in Tran, and therefore must be held to comply with the Schedule.
[ 21 ] The applicant submits that Tran is distinguishable because a medical reason was provided for the denial (i.e., that the goods and services proposed in the OCF-18 did not fit with the loss details).
[ 22 ] I find Tran does not assist here because the Tribunal’s decision did not consider or analyze whether the respondent was required at section 38(8) of the Schedule to provide a medical reason, which is the key consideration in this case. Rather, the Tribunal found the denial notice was valid because the applicant failed to provide the respondent with a reasonable explanation as to why the assessments were required, and how they relate to the accident. I accept that this finding does little to support the respondent’s reconsideration request.
Hedley
[ 23 ] The respondent points to Hedley, a Divisional Court decision that reaffirmed the principle of meaningful reasons as articulated in Turner v. State Farm Mutual Insurance Company, 2005 CanLII 2551 (“Turner”), which states where reasons are required, they must be meaningful in order to permit the insured to decide whether or not to challenge the insurer’s determination. Turner goes on to say that mere boilerplate statements do not provide a principled rationale to which an insured can respond and that in essence, such statements constitute no reasons at all.
[ 24 ] The respondent submits Hedley establishes that meaningful reasons must be provided, and that the reasons offered in its notice meet this test as evidenced by the applicant’s choice to dispute the respondent’s denial of benefits.
[ 25 ] The applicant argues that the respondent misconstrues the context of Hedley because the denial notice was found to be compliant on the basis that medical reasons were provided.
[ 26 ] I find Hedley does not assist here because it does not grapple with the key consideration in this case, which is whether a notice per section 38(8) of the Schedule requires the respondent to provide a medical reason to deny a medical or rehabilitative benefit. The respondent failed to point me to aspects of Hedley that address this issue, which diminishes the relevancy of Hedley’s application to this case.
Peel
[ 27 ] The respondent points to Peel, a Tribunal reconsideration decision that states insurers cannot rely on unsupported conclusions as meaningful reasons when denying a medical or rehabilitation benefit per section 38(8) of the Schedule. Put differently, insurers are not entitled to rely on reasons that are incongruous or contrived in order to satisfy their notice obligations. In Peel, the Tribunal found that the respondent made opaque references to medical documentation and clinical notes and records without specifying which of these documents formed the basis for its opinion.
[ 28 ] The respondent submits that according to Peel, insurers cannot rely on incongruent or contrived reasons to satisfy their notice obligations. The respondent explains that since there were no medical reasons for denying benefits in this case, it would have had to manufacture reasons to satisfy my interpretation of section 38(8) of the Schedule, which in turn would have been inaccurate and misled the applicant as to the authentic reasons for denial.
[ 29 ] The applicant submits the respondent misconstrued Peel by cherry-picking references out of context. The applicant points to references in Peel that, in her opinion, show section 38(8) requires medical reasons for denials (e.g., medical reasons being too vague to know what records formed the basis of the denial, and that an insurer's reasons should, at the very least, include specific details about the insured's condition that form the basis for the insurer's decision).
[ 30 ] In my view, Peel reinforces the strict interpretation of section 38(8) that I apply at paragraph 47 of my decision. In Peel, the Tribunal grapples with the “…precise ‘medical reasons’ that insurers must (emphasis added) now offer under s. 38(8)…” (i.e., per the 2013 legislative amendment) by reasoning that:
“…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 … If s. 38(8) is to achieve its purpose, it must (emphasis added) require insurers to accompany any denial of benefits with meaningful and accurate reasons based on an insured’s medical condition (emphasis added) as described in the file at hand.”
31In this case, the respondent did not explain its decision with reference to the applicant’s medical condition in addition to its other applicable rationale. The notice did not meet even the minimum standard set in Peel, which is to, at the very least, include specific details about the insured’s condition forming the basis for the insurer’s decision. I therefore disagree that Peel supports the respondent’s position that I erred in law by requiring its denial notice to include a medical reason.
Sidhu
[ 32 ] The respondent points to Sidhu, a case that addressed the validity of an insurer’s denial notice on the basis that the Minimum Injury Guideline (“MIG”) applied to the insured’s benefit entitlement.
[ 33 ] The respondent submits the Tribunal found the insurer’s denial notice was sufficient despite it being “fairly vague” (i.e., that the applicant’s accident-related injuries fell within the MIG) and not including any obvious medical reasons. The respondent adds that the reasons set out in its notice were more specific and meaningful than those relied upon and deemed valid in Sidhu.
[ 34 ] The applicant argues that Sidhu is not applicable because medical reasons were included in the insurer’s denial notice.
[ 35 ] I find Sidhu is distinguished from the case at hand because the denial was based on medical reasons. The Tribunal has found that standing within the MIG is a medical reason because it indicates that the insured’s impairments are minor (i.e., a medical definition in the Schedule). Sidhu does not contemplate the heart of the matter in the respondent’s reconsideration request, which is whether an insurer is compelled to provide a medical reason for denying a medical benefit per section 38(8) of the Schedule. In Sidhu, the Tribunal contemplates only that the reason provided by the insurer was consistent with the treatment plan submitted by the applicant, in that her injuries were minor. This finding does little to persuade me that section 38(8) does not require the respondent to provide a medical reason for denial.
Varriano
[ 36 ] The respondent points to Varriano, an Ontario Court of Appeal case that addresses whether an insurer must provide medical reasons in its notice to cancel an income replacement benefit (IRB) under sections 37(4) and 37(2) of the Schedule. Varriano states that if an insurer is relying on a non-medical ground under section 37(2), the provision requires only that the insurer provide notice of the cancellation of the benefits and to provide the insured with the non-medical reason for that determination.
[ 37 ] The respondent submits that Varriano is applicable to this case because sections 38(8) and 37(4) of the Schedule similarly and respectively state the insurer’s notice must identify “the medical reasons and all of the other reasons” and “the medical and any other reasons” pertaining to the insurer’s determination. The respondent therefore reasons that its notice is compliant because Varriano establishes that an insurer need only provide non-medical reason(s) for denial if it is not relying on a medical reason(s).
[ 38 ] The applicant argues that the basis for the decision in Varriano was that section 37(4) must be read in conjunction with section 37(2) of the Schedule, which specifies various non-medical and medical reasons for terminating an income replacement benefit. The applicant emphasizes that section 37(4) explicitly states that insurers may rely on any one or more grounds set out in section 37(2) in terminating benefits, which demonstrates that policy makers intended that an insurer may rely solely on a non-medical reason to terminate benefits in this context only.
[ 39 ] I agree with the applicant. I find that Varriano contemplates whether a denial (i.e., discontinuation) notice must include medical reasons in a specific circumstance that is not broadly applicable to section 38(8) of the Schedule, despite the similarities in language raised by the respondent.
[ 40 ] Varriano found that “…the requirement to provide reasons in s. 37(4) is inextricably tied to the grounds for discontinuance of benefits stipulated in s. 37(2) … Importantly, s. 37(4) states that the insurer may rely on ‘any one or more grounds set out in [s. 37(2)]’ (emphasis added) in terminating benefits. By explicitly including those words, s. 37(4) recognizes that an insurer may rely on a single non-medical reason for termination of benefits, even though the insured might be otherwise medically entitled to the benefit.”
[ 41 ] In my view, the Court’s finding that a medical reason is not required by section 37(4) of the Schedule relies heavily on its connection to section 37(2) of the Schedule. This case is distinguished from Varriano because section 38(8) of the Schedule does not stipulate any specific grounds for denial of medical or rehabilitation benefits. It is only when sections 37(4) and (2) are read properly together that it is clear the word “and” in the phrase “medical and any other reason” was intended in the joint and several sense. Otherwise, I interpret section 38(8) to be read in the joint sense, which is consistent with paragraph 47 of the decision where I note the Schedule obligates the respondent to provide medical reasons and all of the other reasons for its denial. That is to say, a medical reason must be provided in addition to any other reasons relied upon by the insurer for its denial decision.
[ 42 ] The modern principle of statutory interpretation requires that statutes “… be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament.” In my view, the scheme, object, and intention of the Schedule is captured in Peel, where the Tribunal affirms that the Schedule “constitutes remedial and consumer protection legislation.” More specifically, a compliant section 38(8) denial likely requires a medical reason because the section pertains to medical and rehabilitative claims. Following this logic through, in order to have found the respondent’s notice to be valid, I would have essentially had to interpret section 38(8) as saying “… and the medical reasons and/or 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.” I do not agree this interpretation is consistent with the intentions of the legislature, which saw fit to specify “medical reasons and all of the other reasons” as opposed to “and/or all of the other reasons.” In fact, the section 38(8) language as it pertains to medical reasons stands uniquely contrasted from the dozen other instances where slightly different language in the Schedule appears at sections 36(4) and 36(7), 37(4) and 37(6), 38(14), 42(3) and 42(13), 43(2), 44(5), 45(3), and 45(5). It is the only one where “medical reasons” are stated independently of the other reasons. In my view, and as expressed in Peel, this points to the legislature intentionally articulating section 38(8) differently to ensure that a medical reason must be provided to deny an insured’s entitlement to a medical or rehabilitative benefit. This would effectively mean that insurers cannot deny a medical or rehabilitative benefit unless it has a medical reason for doing so. Therefore, the respondent cannot effectively and fairly engage other provisions of the Schedule, such as section 25(5), if it fails to provide the medical reason required at section 38(8). Put differently, the respondent’s failure to provide a medical reason before engaging its other reasons, such as bifurcation of assessments, removes the ability of the respondent to rely on other provisions in the Schedule.
[ 43 ] Given that I find the respondent has not met its onus to show that I made an error of law or fact, I find it unnecessary to consider the authorities provided by the applicant, or the reply arguments made by the respondent with respect to the position taken by the applicant on those authorities.
Error 2: Section 38(11) applicability to incurred benefits.
[ 44 ] I find I did not make an error of law by ordering the respondent to pay for all aspects of the OCF-18 that pertained to catastrophic impairment determination, such that I would likely have reached a different result had the error not been made.
[ 45 ] The respondent submits I mistakenly ordered payment of all goods, services, assessments, and examinations proposed in the OCF-18 for catastrophic impairment determination and asserts I can order only incurred costs be paid per section 38(11)2. The respondent argues that section 38(11) is only activated in the case of incurred benefits, and that the applicant has only incurred $6,780.00 of the $12,702.39 that is in dispute on this OCF-18. The respondent therefore reasons that its liability cannot exceed $6,780.00. To support its position, the respondent relies on multiple authorities, including: Tran; 17-007543 v. Belairdirect Insurance Company, 2018 CanLII 131132 ON LAT (“Belair”); N.P v. Wawansea Mutual Insurance Company, 2020 CanLII 19563 (“N.P.”); Sivalingam v. Unifund Assurance Company, 2021 CanLII 111087 ON LAT (“Sivalingam”); and Aviva General Insurance Company v. Catic, 2022 ONSC 6000.
[ 46 ] The applicant agrees with the position taken by the respondent and requests an order that affirms my decision on the disputed OCF-18, but amends entitlement to the incurred amount of $6,780.00 plus interest.
[ 47 ] I find my order was consistent with section 38(11)2 of the Schedule. However, I accept it could have been made clearer to the parties that the applicant’s entitlement extends only to incurred expenses. At paragraphs 4(2) and 58 (ii), I indicate the applicant is entitled to “Payment of all goods, services, assessments, and examinations proposed in the OCF-18 for catastrophic impairment determination per section 38(11)2 of the Schedule, plus interest per section 51 of the Schedule.” While I did not specify the entitlement value was, in fact, $12,702.39, I agree this sounds like this entire amount is payable as opposed to only the incurred portion of $6,780.00.
[ 48 ] As a decision of the Divisional Court, Catic is binding on the Tribunal. Catic establishes that section 38(11)2 compels an insurer to pay for all the items listed in the OCF-18, but only if they are incurred and only for the period during which any denial notice remains outstanding. On the basis of the reconsideration request submission and response by the respondent and the applicant, respectively, I agree the applicant incurred $6,780.00.
[ 49 ] Rule 18.4 provides that upon reconsidering a decision, the Tribunal may:
a. Dismiss the request; or
b. After providing responding parties an opportunity to make submissions,
i. Confirm, vary, or cancel the decision or order; or
ii. Order a rehearing on all or part of the matter.
[ 50 ] I vary my order to clarify that the applicant’s entitlement under section 38(11)2 is limited to $6,780.00, which the parties agree is the amount incurred during the relevant period. I order that paragraphs 4(2) and 58 (ii) of my decision be varied to read:
“Payment of $6,780.00 for all incurred goods, services, assessments, and examinations proposed in the OCF-18 for catastrophic impairment determination per section 38(11)2 of the Schedule, plus interest per section 51 of the Schedule.”
ORDER
[ 51 ] Pursuant to Rule 18.4, I order that paragraphs 4(2) and 58 (ii) of my decision be varied to read:
“Payment of $6,780.00 for all incurred goods, services, assessments, and examinations proposed in the OCF-18 for catastrophic impairment determination per section 38(11)2 of the Schedule, plus interest per section 51 of the Schedule.”
[ 52 ] The respondent’s reconsideration request is otherwise denied.
Michael Beauchesne
Adjudicator
Tribunals Ontario – Licence Appeal Tribunal
Released: October 22, 2024