Cost of Assessments Responsibility of Insurer?

April 06, 2010, Kitchener, Ontario

Posted by: Robert Deutschmann, Personal Injury Lawyer

Arbitrator: Edward Lee
Decision Date: November 13, 2009

Kathryn V. Scott was injured in a motor vehicle accident on September 17, 2002. She applied for and received statutory accident benefits from Dominion of Canada. Ms Scott also sought payment for a series of medical examinations she underwent to determine if she had suffered a catastrophic impairment. The issue of the hearing was to determine if Ms. Scott was entitled to payments of $18,073.24 for the cost of examinations, pursuant to Section 24 of the Schedule.

Kathryn Scott was injured in a motor vehicle accident on September 17, 2002. She sought a first determination for catastrophic impairment and filed an OCF-19 dated December 23, 2004 with Dominion. In response, Dominion sent Ms Scott a letter dated February 18, 2005, and an OCF-9 informing her that they did not feel she was catastrophically impaired and that they wished to have her assessed at a DAC centre.

The CAT DAC assessments were performed by Work Wise Occupational Assessment Centre in August 2005. These CAT DACs determined that Ms Scott was not catastrophically impaired.

In the meantime, Ms Scott was also involved in tort litigation regarding the same accident. She was represented by the same law firm for both her accident benefits and tort files. In January 2007, she underwent a series of further assessments conducted by CEMED Inc. (CEMED) to determine if she was catastrophically impaired. These assessments took place in January 2007, and determined that Ms Scott was indeed catastrophically impaired.

Ms Scott then filed a second OCF-19 dated February 14, 2007. The form clearly indicated that this was a "reapplication" for a catastrophic determination. CEMED also sent a letter to Dominion dated March 12, 2007 enclosing the five reports of the medical assessments conducted by CEMED.

Dominion responded to Ms Scott by letter dated March 27, 2007, informing her that they had received the CEMED assessments, but were still unconvinced that she was catastrophically impaired. They arranged to send Ms Scott to a series of Insurer's examinations at LifeMark Assessments.

The LifeMark assessments were conducted in June 2007, but because of problems with methodology, were unable to determine whether Ms Scott was catastrophically impaired. By letter dated October 3, 2007, Dominion informed Ms Scott that there was a need to send her to further assessments.

Ms Scott informed Dominion by letter dated November 1, 2007 that she would not be attending further assessments, and requested a response to her application for a determination of catastrophic impairment.

Soon after, Ms Scott was deemed to be catastrophically impaired by Dominion.

The issue of the arbitration, then, was to determine if Ms Scott was entitled to payments of $18,073.24 for the cost of the assessments and examinations conducted by CEMED.

ANALYSIS OF EVIDENCE:
Did Ms Scott seek prior approval for the CEMED assessments?


The first question that was addressed in the arbitration was whether Ms Scott sought approval for the CEMED assessments before undergoing them.

There was no evidence that an OCF-22 was ever submitted to Dominion in regard to the CEMED assessments.

Despite the lack of an OCF-22, Counsel for Ms Scott seemed to suggest that Ms Scott sought or tried to seek verbal approval for the CEMED assessments during telephone conversations she had with Ms. G.

Ms Scott testified that she had engaged in a series of "heated" conversations with Ms. G. wherein she advised Ms. G. of the CEMED assessments. Nevertheless, Ms Scott admitted she could not remember when these conversations occurred, or whether she ever mentioned CEMED's name. When asked whether she had requested that Dominion fund the CEMED assessments before they were done, Ms Scott replied that she had not asked, but added that "Ms. G. did not tell me."

In response, Ms. G. testified that she had engaged in conversations with Ms Scott, including one conversation on March 27, 2007, wherein Ms Scott stated that she had arranged assessments in Toronto that were part of the litigation process. Ms. G. stated that she then informed Ms Scott that she could not discuss such matters because they were part of the tort process.

Overall, the arbitrator found that Ms Scott's testimony was unreliable in regard to her telephone conversations. She admitted her memory deficits. She kept no written notes of her discussions. She could not remember when conversations had taken place, and she was unsure of what she had said. At times, she contradicted herself or gave ambiguous or evasive responses. At one point she testified that she had asked for approval of the assessments, but on further questioning she also testified that she felt she could not ask for approval because Ms. G. had been unreceptive.

Further, even if the arbitrator accepted that approval for an assessment could have been obtained in a form other than through an OCF-22, the arbitrator did not find that Ms Scott made a verbal request for approval to Dominion before the CEMED assessments took place.

Therefore, the arbitrator found that Ms Scott did not submit an OCF-22 for the CEMED assessments and that she did not seek approval for the CEMED assessments before they took place.

The arbitrator did not agree with Ms Scott's primary argument that prior approval for the assessments was unnecessary because the CEMED assessments fell under Section 24(1)(7) of the Schedule. The arbitrator did not accept the proposition that the only criterion to be considered was the reasonableness of the fees for the assessments.

A straightforward reading of Section 24(1)(7) led to the conclusion that this section only relates to the reasonable fees charged "… for preparing an application under Section 40 for a determination of whether the insured person has sustained a catastrophic impairment." For instance, this would be the fee charged for the preparation of an OCF-19 itself.

Once it is determined that the CEMED assessments fall under Section 24(1)(11), it is then necessary to see if those assessments fall under any of subparagraphs (i) or (ii) or (iii) of Section 24(1)(11).

These subparagraphs list the three situations wherein an Insurer would be required to pay for those assessments.

Section 24(1)(11)(ii) would have required that Ms Scott "… applied for approval of the assessment or examination either in a treatment plan submitted under section 38 or by way of a separate application submitted under section 38.2."

Ms Scott never applied for the approval of the CEMED assessments as part of a treatment plan submitted under Section 38, or by way of a separate application under Section 38.2 (which would have taken place through the submission of an OCF-22).

Therefore Ms Scott could not bring herself under any of the provisions which might have required Dominion to pay reasonable fees for the assessments and examinations she undertook at CEMED.

At the time of the first denial, the Section 42.1 "rebuttal" provisions had not yet been enacted. Nothing in the legislation suggests that these provisions were to be applied retroactively. Therefore, the arbitrator did not find that the CEMED assessments could be considered "rebuttal" reports to the assessments that were done as a consequence of Ms Scott's first application for a determination of catastrophic impairment.

The Section 42 examinations done by LifeMark Assessments were conducted in May and June of 2007, but as late as October 2007, Dominion had not yet made a determination of the issue. Dominion communicated to Ms Scott in October 2007 that there were problems with the LifeMark assessments and that further assessments were required.

Therefore, the arbitrator found that Section 42.1 could be of no help to Ms Scott as the CEMED assessments were completed long before the Insurer made a determination in regard to Ms Scott's impairment. Similarly, Section 42.1(3)(3) required that a "rebuttal" report be provided to the Insurer no more than 80 days after the day the Insurer gave the insured person notice of its determination.

In the present case, the arbitrator agreed with the reasoning in the decision of Tan and Royal & SunAlliance. That case involved a similar set of facts except that the applicant in Tan did indeed file an application for the approval of an assessment. The assessment was conducted ten days before approval was sought. The arbitrator held the following: “The language utilized in subsection 24(1.1) is clear and unambiguous. The reasonableness (or lack of reasonableness) of the assessment or examination appears to be immaterial where subsection 24(1.1) applies. I note that the Licata and Gore Mutual decision relied upon by the Applicant was made under the previous version of section 24 and not the current version. I therefore do not find it to be of assistance in deciding this application.”

It appeared to the arbitrator that, under the current version of section 24, if an insured person incurs an expense for an assessment prematurely, the reasonableness of that assessment will no longer be a relevant consideration.


The language utilized in Sections 24(1) and 24(1.1) was found to be clear and unambiguous. Simply put, Ms Scott failed to seek approval for assessments as she was required under the Schedule. Because she incurred those fees before obtaining approval, the Insurer was not required to pay those fees.

Posted under Accident Benefit News, Automobile Accident Benefits, Car Accidents, Catastrophic Injury, Slip and Fall Injury, Treatment

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Deutschmann Law serves South-Western Ontario with offices in Kitchener-Waterloo, Cambridge, Woodstock, Brantford, Stratford and Ayr. The law practice of Robert Deutschmann focuses almost exclusively in personal injury and disability insurance matters. For more information, please visit www.deutschmannlaw.com or call us toll-free at 1-866-414-4878.

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