Posts Tagged ‘mediation’
Because a catastrophic impairment designation is not a “benefit”, as defined under the Statutory Accident Benefits Schedule (SABS), there is no time limitation for disputing an insurer’s denial.
On January 6 2009, Zofia Machaj submitted an Application for Determination of Catastrophic Impairment (OCF-19) to RBC Insurance. After conducting insurer’s examinations, RBC responded on May 25, 2009, stating that, “the assessors have formed the consensus opinion that you have not sustained a catastrophic impairment and therefore you do not qualify for the increased benefits.”
In order to dispute RBC’s denial, an Application for Mediation was submitted by Ms. Machaj on July 18, 2011, which was almost two months beyond the two year limitation period that the Insurance Act stipulates is required. Section 281.1 of the Insurance Act establishes a limitation period, provides that a mediation proceeding, “…shall be commenced within two years after the insurer’s refusal to pay the benefit claimed” (emphasis added).
In 2015, Whitten J. issued a decision on a Summary Judgment Motion in the matter of Machaj v RBC General Insurance Company [2015 ONSC 4310], wherein he found in favour of RBC Insurance and ruled that the two-year limitation applied, because the denial, “…flushed out the consequences of the denial of the status of catastrophic impairment; namely, the enhanced benefits were not available.”
Ms. Machaj appealed. The Ontario Court of Appeal disagreed with Judge Whitten’s decision, noting that, “In our opinion, by adding the words, “and you therefore you do not qualify for the increased benefits”, the respondent insurer was doing nothing more than telling the appellant that she lacked status to claim increased benefits. The additional words did not convert what was, in substance, a denial of a catastrophic determination into a denial of the specific benefits that would trigger the commencement of the two year limitation period.”
RBC Insurance sought leave to appeal to the Supreme Court of Canada, but it was dismissed with costs.
As such, under the current legislation, an insured person is not bound to dispute an auto insurance company’s denial of catastrophic impairment determination within two years, unlike a denial of an actual “benefit” under the SABS.
If you have been injured in an automobile accident and your insurance company has denied anything, it is always best to consult with a lawyer to ensure that your interests and entitlements are protected.
The Ontario Government has released its proposed amendments to the Insurance Act regulations regarding the Ontario Automobile Insurance Dispute Resolution System (AIDRS).
Effective April 1, 2016, an individual who wishes to dispute a denial by an insurance company for statutory accident benefits will go through the Ministry of the Attorney General’s License Appeal Tribunal (LAT) and not the Financial Services Commission of Ontario (FSCO).
The proposed amendments include the following:
- Applications for mediation, neutral evaluation, or the appointment of an arbitrator for arbitration will not be accepted by FSCO after March 31, 2016.
- Applications to the Director of Arbitrations for appeals may only be made where the application for the appointment of an arbitrator was received by FSCO on or before March 31, 2016.
- Applications to the Director of Arbitrations for variation or revocation may only be made where the application for the appointment of an arbitrator was received by FSCO on or before March 31, 2016.
- The Office of the Director of Arbitrations shall be continued until the date on which all notices of appeal and all applications for variation or revocation have been finally determined.
- Statutory Accident Benefits Schedule (SABS) provisions that apply to the dispute resolution process at FSCO will continue to apply, as they read on March 31, 2016, to all applications that were received by FSCO before the transition date but are not finally determined before that date. The SABS will also be amended, where necessary, to apply to applications filed at the LAT on or after April 1, 2016.
Comments on the proposal are due by January 23, 2016.
The posting can be read in its entirety by clicking on the link below:
FSCO Releases Decision Clarifying What Is a “Medical Reason” for Denial of a Benefit and Insurer’s Examination
The Financial Services Commission of Ontario (FSCO) has released a decision clarifying what is considered to be a “medical reason” for an insurer to deny a benefit and for the insurer to demand that an insured attend an insurer’s examination under Section 44 of the Statutory Accident Benefits Schedule (SABS).
In the decision, Kadian Augustin and Unifund Assurance Company [FSCO A12-000452] Arbitrator Susan Sapin considers whether or not Ms. Augustin is allowed to dispute the insurer’s denial of treatment because she failed to attend an insurer’s examination. In order to make a determination Arbitrator Sapin needed to consider whether or not the insurer’s examination was compliant with the SABS.
Unifund wanted to send Ms. Augustin to an insurer’s examination to determine if she was within the Minor Injury Group (MIG) after receiving a treatment plan that, if approved, would take her out of the MIG. Unifund provided the following notice to Ms. Augustin in their Explanation of Benefits: “Based on our review of the medical documentation provided to date, we require an assessment by an independent medical assessor, in order to determine if your impairment is predominantly a minor injury as described in the Minor Injury Guideline. Please see the Notice of Examination for further details.”
Arbitrator Sapin found that this explanation did not comply with Section 38(8) of the SABS because it did not state that Unifund “believes” the MIG applies, or why. Nor did it state the “medical reasons and all of the other reasons why the insurer considers any goods or services, or the proposed costs of them, not to be reasonable and necessary. The arbitrator noted that it provided no reason, medical or otherwise, explaining why it refused to pay the benefit.
Arbitrator Sapin goes on to explain,
Although this might seem a very fine point, that is what the sections [38(8), 38(9) and 38(10)] actually say. The legislature chose this wording, and recognised principles of statutory interpretation require me to interpret it in a reasonable fashion and in the overall context of the accident benefits scheme. Given that an insured person’s treating practitioner must provide a factually based medical opinion to support a claim for treatment outside the MIG, I find it is reasonable to require an insurer who chooses to refuse to pay an initial claim to counter with something more than simply a desire “to determine if your impairment is predominantly a minor injury as described in the Minor Injury Guideline,” as Unifund has done in this case. This is particularly so where, as in the case here, Unifund refused to pay for the treatment pending an IE, a response I find undermines the stated purpose of the MIG to provide access to early treatment, a purpose based on sound medical principles.
The arbitrator also provides a guideline for insurers for a proper denial of an application for a benefit that would take the insured out of the MIG as follows:
I find it follows logically from these requirements that in its s. 38(8) notice to the insured person that medical benefits will not be paid, the insurer, in explaining why the benefits are not payable, must indicate that it has reviewed the Treatment and Assessment Plan and any medical documentation provided; compared it to the criteria in the MIG; and determined either that there is insufficient compelling evidence (of pre-existing injuries or conditions, for example) or insufficient medical documentation to persuade it that the accident injuries fall outside of the MIG, and therefore, the insurer believes the MIG applies and the treatment claimed is not reasonable or necessary (because the treatment does not conform to the MIG treatment protocols, for example). I find that type of response would meet the insurer’s obligation to provide “medical reasons” as required by s. 38(8) when it chooses to refuse benefits because it believes the MIG applies.
Also of note is the arbitrator’s distinction between a “medical reason” and a “medical opinion”:
A medical opinion, such as that required of the health practitioner who submits the Treatment and Assessment Plan, is based on facts obtained from an assessment of the insured person’s medical condition, in person or otherwise. As stated above, an insurer does not have the benefit of its own medical opinion at the time it receives the initial treatment plan, and can only obtain one by exercising its right to an IE, founded in s. 38(10), and for which rules are set out in s. 44(5).
With respect to the need for a medical reason to be provided by an insurer when notifying the insured for their need to attend an insurer’s examination under Section 44 of the SABS, Arbitrator Sapin states as follows:
As stated above, I find s. 38 and s. 44 must be read together, as the right to an IE is founded in s. 38(10) and arises from the insurer’s right under s. 38(8) to refuse a claim for treatment. I have already identified that the “medical reasons and all of the other reasons” in the refusal notice should include, at a minimum, a statement that the claims adjuster has reviewed the MIG and the treating health practitioner’s medical opinion, and has concluded that the health practitioner has not provided compelling evidence that the person’s injuries are outside the MIG, or that the treatment claimed is reasonable or necessary. The “medical and other reasons for the examination” in the Notice of Examination under s. 44(5) should contain substantially similar information.
This decision can be read in its entirety by clicking here.
The Financial Services Commission of Ontario (FSCO) is reporting that the backlog of mandatory mediations will be over by the end of August, 2013.
When an accident benefits insurer denies a benefit, such as medical treatment, a mediation through FSCO is the mandatory first step in the dispute resolution process. In previous years a mediation date would often take up to one year from the date the mediation application was submitted. Judicial and arbitration decisions (ironically from arbitrators at FSCO) deemed that a mediation must be conducted within 60 days in accordance with the Dispute Resolution Practice Code or it can be deemed to have been failed.
FSCO provided statistics and timelines with respect to the backlog. These can be viewed by clicking here.
A major decision with respect to the definition of “catastrophic” under the Statutory Accident Benefits Schedule was released by the Ontario Court of Appeal today.
It its decision, Pastore v. Aviva Canada [2012 ONCA 642], the Court has supported the findings of the Director’s Delegate at the Financial Services of Ontario, who decided that only one functional impairment due to a mental or behavioural disorder at the marked level is necessary to declare a person’s injuries as catastrophic. Furthermore, the decision supports that a marked psychological impairment caused by physical pain is valid for the purpose of determining a catastrophic impairment.
The decision can be read in its entirety by clicking here. Pastore Appeal
The Financial Services Commission of Ontario (FSCO) has released its draft Statement of Priorities for 2012.
Many of the priorities focus on changes to the auto insurance sector. They include the following:
- Continuing to assess the extent of auto insurance fraud and consider the recommendations of the task force when their report is released in the Fall of 2012;
- Exploring ways to utilize the Health Claims for Auto Insurance (HCAI) system to detect and prevent fraud;
- Implement auto insurance recommendations made in the Auditor General of Ontario’s 2011 Annual Report;
- Undertake long-term auto insurance reform initiatives, including review of the Minor Injury Group (MIG) protocol and changes to the catastrophic impairment criteria;
- Reduce the mediation backlog; and
- Conduct market conduct audit reviews of compliance with the 2010 auto insurance reforms including Statutory Accident Benefits;
The entire draft Statement of Priorities can be read by clicking here.
Smitiuch Injury Law recently won an arbitration decision, DiMarco and Chubb Insurance Company, at the Financial Services Commission of Ontario (FSCO) regarding what is deemed to be an “accident”.
Marilena DiMarco was riding her bicycle on a training ride for a charitable event when she and her group went through a town that was having a street festival. Because the street was closed the group rode their bicycles on the sidewalk. A van was parked half-way on the sidewalk. When Ms. DiMarco swerved to avoid the van, she lost her balance and fell, hitting the van with her hand in the process. Chubb Insurance refused to accept the incident as a “motor vehicle accident” as defined in The Insurance Act and Statutory Accident Benefits Schedule (SABS) and refused to pay for badly-needed treatment and other accident benefits.
Arbitrator Deborah Pressman stated the following:
In this case, Ms. DiMarco was compelled to manoeuvre on the sidewalk around a vehicle that was parked in her way. This automobile set in motion a chain of events directly resulting in Ms. DiMarco’s fall from the bicycle. There was no intervening act that caused Ms. DiMarco to fall. There were no other impediments around the automobile or near Ms. DiMarco. Therefore, there was a direct and proximate cause between the “use or operation” of the automobile and Ms. DiMarco’s injuries.
Peter Cho, an associate lawyer at Smitiuch Injury Law Professional Corporation, represented Ms. DiMarco at the arbitration hearing. He was assisted by Chris Jackson, Accident Benefits Manager.
The decision can be read by clicking on the attached. DiMarco and Chubb Insurance Company of Canada FSCO Decision A10-003967
A recent decision by FSCO Arbitrator Jeffrey Rogers supports that a mediation can be deemed to have failed if it has not been mediated within the 60 day timeframe noted in both The Insurance Act as well as The Dispute Resolution Practice Code.
In the decision, Leone and State Farm, Arbitrator Rogers states the following:
Since the prescribed time for mediation had expired when Mr. Leone filed his Application for Arbitration, there was no jurisdictional barrier to his doing so. This conclusion is consistent with the scheme and intent of the Act, the Schedule and the Rules as they aim to promote prompt payment of benefits and speedy dispute resolution. The legislation and the Rules are all replete with fixed time limits intended to serve this purpose. Accepting State Farm’s position would mean that there is no fixed time for completing mediation. That would render meaningless the requirement in the Act and the Rules for the prompt appointment of a mediator.
Section 281.1 of the Act, section 51(1) of the Schedule and Rule 11 of the DRPC require that an Application for Mediation be filed no later than 2 years from the date the insurer provided written notice of refusal to pay an amount claimed. Accepting State Farm’s submission that the Application is not filed until a mediator is appointed would mean that an insured person does not know whether he or she has met this limitation when delivering an Application to the Commission. It would mean that the period differs from application to application and that close to 1 year of the permitted time was consumed by the delay in this case. Conceivably, if delays increase to the point where it takes 2 years to appoint a mediator, an insured person who attempts to file an Application immediately upon denial would see his or her rights extinguished, before the first step in the dispute resolution process has occurred. The Legislature could not have intended that absurd result.
A decision from the Superior Court of Justice of Ontario was released that declares a mediation by the Financial Services Commission of Ontario (FSCO) failed if it has not been mediated within 60 days of the application being submitted.
In Cornie v. Security National [2012 ONSC 905], which was heard with three other similar cases, Justice J.W. Sloan renders the following decision:
It currently appears that FSCO’s Dispute Resolution Services’ Mediation Unit is functioning without timelines and has been doing so for years.
The SABS [Statutory Accident Benefits] are for the benefit of injured motor vehicle victims and are often required in a timely fashion.
It makes perfect sense that the legislation and the DPRC [Dispute Resolution Practice Code] refer to a 60 day time limit to deal with such disputes.
In contrast to the injured victims, insurance companies are not in a vulnerable position. While there is nothing to suggest that these insurance companies are in any way responsible for the delay in mediation, there is no evidence that the delay in mediation is of any real consequence to them.
Justice Sloan found the insurance companies’ postion that accident victims must simply wait to be “preposterous” and suggests that FSCO can continue to try to comply with the 60 day period or seek a change and/or ask for some legislative direction to extend the 60 day period in appropriate circumstances.
It remains to be seen if this motion decision will be appealed.
The Canadian Broadcasting Corporation (CBC) in Toronto recently aired an expose on the increase in denials for medical and rehabilitation treatment by Ontario’s no-fault automobile insurers and the significant delay in obtaining justice for unreasonable denials.
To read the article and watch the archived video, click here.