Insurer Fails to Show OHIP will pay for assessment - appeal of FSCO decision denied - GT v Unifund - LAT16-001283

January 22, 2018, Kitchener, Ontario

Posted by: Robert Deutschmann, Personal Injury Lawyer

G.T. v. Unifund Assurance Company, LAT 16-001283 2017 CanLII 81567 (ON LAT)

Decision Date: December 1, 2017
Heard Before: Linda P. Lamoureux, Executive Chair

COLLATERAL BENEFITS and OHIP: FSCO decision upheld; insurer must fund orthopaedic assessment as it isn’t clear whether OHIP will fund it

RECONSIDERATION DECISION

This is a request for reconsideration of a decision of the LAT. The Tribunal’s decision concerns a single benefit that the applicant, G.T., requested under the Schedule from his insurer, Unifund: the $1,994.72 cost of an orthopaedic assessment.  Unifund denied the benefit on the basis that it was covered by OHIP.  In response, G.T. applied to the Tribunal, which determined, based on the Schedule, that Unifund was required to pay for the assessment.

Unifund asks the Arbitrator to reconsider the Tribunal’s decision.  The Arbitrator denies the request.

On January 9, 2015, G.T. was injured in a motor vehicle accident.  As a result, he submitted an Application for Benefits (OCF-1) dated January 23, 2015 to Unifund, following which he sought a number of benefits under the Schedule.  This request for reconsideration focuses on only one of those: the cost of an orthopaedic assessment.  That assessment was the subject of a Treatment and Assessment Plan (OCF-18) completed on December 9, 2015 by Dr. Frederic Langer, who recommended the assessment at a cost of $1,994.72.

The parties’ positions

G.T. argued that, given his condition and the medical attention he already sought and received the assessment was reasonable and necessary.  He also argued that Unifund failed to comply with its obligation under the Schedule by providing him with the medical and other reasons for its decision.

Unifund argued that G.T. was not entitled to the assessment since, in its view, his injuries fell within the MIG.  Although it implied that it had already paid the maximum benefits allowable under the MIG, Unifund offered no information about what other benefits it had actually provided G.T.  Unifund simply argued that G.T. was within the MIG and had the onus of proving otherwise.  Second, and with respect to its EOB, Unifund argued that G.T. raised the issue of non-compliance with s. 38(8) too late and, at any rate, its notice was compliant.  Lastly, Unifund also argued that the assessment was fully covered under OHIP and that, given G.T.’s failure to lead any evidence to suggest that the assessment was not reasonably available through an OHIP-funded source, the Tribunal was bound to apply s. 47(2), which reads as follows:

 Payment of a medical, rehabilitation or attendant care benefit or a benefit under Part IV is not required for that portion of an expense for which payment is reasonably available to the insured person under any insurance plan or law or under any other plan or law.

In its decision of March 27, 2017, the Tribunal granted G.T.’s application.  In its view, Unifund’s EOB included “only considerations relating to OHIP coverage,” and failed to include any medical reason required by s. 38(8).  Further, the Tribunal held that Unifund also failed to comply with s. 38(9), which required Unifund to advise G.T. that it was relying on the MIG’s applicability.  Therefore, the Tribunal held that the consequences outlined in s. 38(11) applied and, thus, Unifund was obligated to pay for the assessment.  As for Unifund’s argument concerning s. 47(2) of the Schedule, the Tribunal was unpersuaded.  It held as follows:  

Unifund’s submissions is, essentially, that OHIP qualifies as “any other plan” under s. 47(2).  Unifund’s submission only makes sense if s. 47(2) exempts payment for types of benefits that are reasonably available under OHIP. For example, payment for an examination for an orthopaedic assessment, or the assessment itself, would not be required if those services were reasonably available through OHIP. Unifund notes that the applicant has not provided evidence of whether OHIP will cover an orthopaedic assessment, or that he has even applied to OHIP for one.

Unifund’s interpretation of s. 47(2) is too broad. Section 47(2) exempts an insurer from payment for the “portion of an expense for which payment is reasonably available” from OHIP. The relevant question to ask is, will OHIP pay for a portion of the specific examination for an orthopaedic assessment requested by the applicant in the Treatment and Assessment Plan? This is not the same as asking whether OHIP will pay for an examination for an orthopaedic assessment generally. If s. 47(2) is applicable, Unifund is exempted from paying only the portion that OHIP will cover of the specific examination for an orthopaedic assessment that the applicant requested in the Treatment and Assessment Plan dated December 9, 2015.

There is no evidence that OHIP will pay for any portion of the specific orthopaedic assessment requested by the applicant on December 9, 2015. For those reasons, it granted G.T.’s application, including interest on the outstanding payment.

Issues

Following its receipt of the Tribunal’s decision, Unifund made this request for reconsideration on April 16, 2017 under Rule 18 of the Tribunal’s Rules of Practice and Procedure.  Its request is based on the two main arguments:

1. Breach of procedural fairness.  According to Unifund, the Tribunal erred in rejecting its submission that the MIG applied.  The MIG’s applicability was a live issue that was the subject of a proceeding before the Financial Services Commission of Ontario (“FSCO”) scheduled for hearing on May 10, 2017.  For reasons that were “entirely unclear,” the LAT “chose to deal” with G.T.’s application before FSCO determined the “fundamental question” concerning the MIG’s applicability.  Denying Unifund the ability to rely on the MIG was procedurally unfair, particularly given G.T.’s knowledge that Unifund was treating him within the MIG, something it explained in a previous EOB dated September 25, 2015.
2. Error of law.  According to Unifund, the Tribunal also erred in its interpretation of s. 47(2) of the Schedule.  Based on a proper interpretation of that section, Unifund is not required to pay for any assessment covered under OHIP.

The alleged breach of procedural fairness

Unifund alleges that the Tribunal erred in rejecting its submission that the MIG applied.  In its view, the MIG’s applicability was a live issue that the parties were scheduled to argue at FSCO on May 10, 2017, and which should have been determined before the Tribunal disposed of G.T.’s application.  Additionally, Unifund claims to have communicated this position to G.T. months before the EOB in question.  To this end, it referenced its earlier EOB dated September 25, 2015, included the language therein, though it did not actually provide me with a copy.

It is not “entirely unclear” to Arbitrator Lamoreaux, as it was to Unifund, why the LAT disposed of G.T.’s application instead of waiting for FSCO’s determination on the MIG issue.  To the contrary, the answer is obvious.  Unifund’s request for reconsideration contains the first reference to the FSCO proceeding in the Tribunal’s file.  After reviewing the Tribunal’s record, Arbitrator Lamoreaux saw no other reference to the FSCO proceeding, nor any reference to Unifund’s EOB dated September 25, 2015 or any other document evincing Unifund’s position that it was already treating G.T. under the MIG.

On that basis, Arbitrator Lamoreaux rejected this part of Unifund’s argument.  Requests for reconsideration are not an opportunity for parties to “have another kick at the can,” patching cracks in their advocacy or evidence that should have already been filled.  Unifund could have provided this ontext to the Tribunal earlier, assuming it would have made a difference.  Given its failure to do so, there is no error.  The Tribunal correctly applied the relevant law to the otherwise limited facts on hand.  From the Tribunal’s vantage, Unifund’s argument that the MIG applied was raised for the first time in its responding submissions filed before the hearing, submissions that did not explicitly reference the FSCO proceeding or include any document or indication that Unifund previously informed G.T. of its view that the MIG applied.  The Tribunal also held that the Unifund’s notice was insufficient, a finding that Unifund does not dispute here.  In the circumstances, the consequences mandated in s. 38(11) of the Schedule were, as the Tribunal properly observed, a “complete response” to Unifund’s position.

Nevertheless, it is prudent to inquire about the FSCO proceeding.  Concerned about the administration of justice between the parties, along with the integrity of the Tribunal’s dispute resolution function, Arbitrator Lamoreaux asked the parties for further information.  More specifically, to provide an update on the FSCO proceeding’s status, as well as to provide their pleadings and submissions, including attachments, filed in support of their positions before FSCO.

In response, the parties informed Arbitrator Lamoreaux that they settled the FSCO proceeding, and that this settlement was “wholly irrelevant to the issue put to [me] by way of reconsideration.”  Moreover, although the parties eventually provided me with their pleadings, they refused to provide any further documentation on the basis that those too were irrelevant.

All told, Unifund based this part of its reconsideration on facts that Arbitrator Lamoreaux is now urged to ignore.  At any rate, there was nothing in the parties’ pleadings before FSCO suggesting that Unifund was in fact relying on the MIG, let alone any supporting documentation detailing the nature of its argument.  Therefore, nothing related to the FSCO proceeding is affecting the conclusion that, in the circumstances, the Tribunal was correct to underscore s. 38(11) of the Schedule.

The proper interpretive approach to s. 47(2)  If s. 47(2) applies, then s. 38(11) is irrelevant.  As the parties agree, the resulting application of s. 38(11) cannot make payable a benefit that is otherwise not payable under s. 47(2). 

As the Divisional Court observed, that section “speaks of an exemption for the insurer if the expense is reasonably available ‘under any insurance plan or law or under any other plan or law.’"  Put another way, it also makes plain that the Schedule is excess insurance, a point that the legislature made explicitly in s. 268 of the Insurance Act, R.S.O. 1990, c I.8.

Excess insurance - The insurance mentioned in subsection (1) is excess insurance to any other insurance not being automobile insurance of the same type indemnifying the injured person or in respect of a deceased person for the expenses.  R.S.O. 1990, c. I.8, s. 268 (6).

Idem

The insurance mentioned in subsection (1) is excess insurance to any other insurance indemnifying the injured person or in respect of a deceased person for the expenses.  R.S.O. 1990, c. I.8, s. 268 (7).  Read together, s. 268 of the Insurance Act and s. 47(2) of the Schedule provide that those injured in a motor vehicle accident must first seek coverage through any available collateral benefits provider before relying on the no-fault scheme contained on the Schedule. In this case, OHIP – the Ontario Health Insurance Plan – is one such provider.  It is obviously an “insurance plan or law” for the purposes of s. 47(2).

As the Tribunal realized, this conclusion might give rise to practical challenges. Insured persons might first have to “apply to OHIP for coverage, await a response, receive no or partial payment for an examination for an orthopaedic assessment, and then apply to their insurer for coverage.”  Nevertheless, that is what s. 47(2) requires in reinforcing the point that the Schedule provides excess insurance.  True, the process for determining the extent of one’s coverage under OHIP, as well as obtaining medically necessary benefits from an OHIP-funded source, may take some time.  However, those seeking such benefits are not required to jump through inordinately high or narrow hoops to acquire them.  The operative test is whether the collateral benefits are “reasonably available.”  Arbitrator Lamoreaux took the view, that test necessarily requires an insured to use reasonable efforts and accept reasonable delays to obtain the benefits mentioned in s. 47(2) from any available collateral provider before relying on the Schedule.  At the same time, that test also places a corresponding obligation on insurers to demand no more than what is reasonable from those they insure.   

The Arbitrator noted the difficulty here is that there is little, if any, information on the extent to which OHIP would pay for the assessment at issue.  G.T. maintains that it was Unifund’s obligation to evidence OHIP’s coverage.  As he puts it, “if the insurer believed that the cost of the assessment was covered under OHIP, they had the burden to demonstrate that coverage was available either in full or in part.”  Conversely, Unifund repeats, as it did before the hearing, that G.T. led no evidence that OHIP would not cover the assessment.

The rule that has often been applied is these circumstances is that, once the existence of a collateral insurance policy has been established, the insured bears the legal burden of proving what benefits were reasonably available in the circumstances. Arbitrator Lamoreaux would adopt this same approach, but add the following clarification.  Since the insurer would benefit from its applicability, s. 47(2) first requires that an insurer put the section in play.  This is analogous to the approach that the courts have taken to the deduction of collateral benefits from tort awards under s. 267.8 of the Insurance Act.[16]  How does an insurer satisfy that onus?  At the very least, an insurer must advance some evidence or submission that, on balance, establishes that the benefit at issue, whether in whole or in part, was reasonably available to the insured from a collateral provider.  If an insurer has satisfied that onus, the burden then shifts to the insured to prove that the benefit at issue was not in fact reasonably available.

Applying this approach here, the Arbitrator is not satisfied that Unifund has discharged its onus. In its brief submissions filed before the hearing, it offered the bare assertion that an orthopaedic assessment was reasonably available under OHIP. In its request for reconsideration, it added to this by simply saying that OHIP covers “all insured medically necessary services provided by physicians,” a statement taken from an Ontario government website that no longer appears to contain the statement.  However, aside from the fact that this statement begs the very question it was intended to answer – i.e., what services are insured under OHIP? – Arbitrator Lamoreaux had difficulty with Unifund’s position.

Like the Tribunal, Arbitrator Lamoreaux was told nothing about how OHIP actually operates or, more to the point, how it would cover the assessment at issue.  OHIP is obviously a first payer for health care services, but is a large and complicated scheme involving some relationship with automobile insurers.  It may very well be that a typical orthopaedic assessment, like the one at issue in this case, provided by a physician such as Dr. Langer would be an insured service covered by OHIP.  However, Unifund offered the Tribunal and me nothing, aside from a bare assertion that OHIP applies, to actually establish that fact.  As a result, its argument here must fail.

On this basis the request for reconsideration is denied.

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