NO MORE DAC’s
…
PAF’s, PPN’s … WHAT DOES ALL THIS
MEAN?
ARE WE BETTER OFF?
By: Charles E. Gluckstein, Gluckstein &
Associates LLP
DAC’s to be Eliminated as of March 1,
2006
Designated Assessment
Centres or “DAC’s” were implemented as part of the 1994 changes to the
The
Liberal government introduced changes to Regulation 403/96 which eliminates
Designated Assessment Centres (DAC’s) which takes effect on March 1, 2006. The new regulation will eliminate DAC’s
and replace them with Insurer Examinations (IE’s) conducted by health care
practitioners selected specifically by the insurer.
This regulation was drafted with the hope of improving
auto insurance by ensuring that insurance money is effectively being spent on
medical care or other services for accident victims rather than on DAC
assessments. The DAC process has
been criticized as redundant, favouring insurers and subjecting accident victims
to probing assessments that either create or result in roadblocks to
benefits. Critics also claimed that
the DAC process was too costly, too slow and duplicated the insurer’s
examination.
In
essence, the new system will substitute IE’s for the DAC’s. Without DAC’s, the amended Regulation
allows parties with disputes over benefits to proceed directly to the dispute
resolution system at FSCO or to the Courts following mediation. Insurers who wish to challenge this will
have to request a separate medical exam from a health care provider of their
choice prior to making a determination of benefit
entitlement.
The
insurance industry has supported the elimination of DAC’s in the hopes that the
process of obtaining accident benefits would become less complicated while at
the same time result in increased savings for insurance companies. However, the net result of the proposed
Regulation will likely see a shift from expenses of a DAC system to expenses of
an IE system with no anticipated savings.
Overall, lawyers will adjust to the new system. On the contrary, the adjustment of a file
will be an extreme wake up call to adjusters as they can no longer deny a
benefit and then simply send an insured to a DAC to confirm their denial and be
done with the case.
Consequently, DAC reports can no longer be used to
correct adjusters’ mistakes and reinstate benefits which were originally denied.
Adjusters must now be better
trained in order to rely on their own knowledge in making decisions on behalf of
insurance companies.
1.
Section 24 Examinations and 42 Assessments without
DAC’s
An
insurer may request an IE pursuant to s.42 of the SABS to assess the
reasonableness of any type of benefit that the insured person claims, including
housekeeping and handyman benefits. The new system will essentially reflect the
approach taken in tort claims: the
insurer and insured will each obtain their own assessments to advance their
respective positions. Presumably,
the object is to make it easier to resolve disputes where there are opposing
positions taken in s.24 and s.42 assessments in the absence of a “neutral” third
assessor.
An
IE report does not necessarily have to support an adjuster’s denial of a
benefit. Yet an insured must
undergo an IE before a decision can be made. Interestingly, an IE could recommend a
benefit however an adjuster can still maintain a denial.
Amendments to this section will allow providers who are
not regulated health professionals to conduct assessments, though the
application for approval of that assessment must be submitted by a regulated
health professional. Prior approval
from the insurer is still required before conducting an examination under
s.24.
There are no longer different criteria regarding
assessments to prepare a treatment plan depending on whether the insured had
received treatment under a pre-approved framework. In all cases, prior insurer approval
would not be required for up to three examinations to prepare a treatment plan
if the cost of each examination is under $200.00. Additionally, insurers must respond to
applications for examinations within two days.
2.
“Rebuttal Assessment”
A
“rebuttal assessment” is what an insured is entitled to in response to an IE
report. Under s.42.1(8), the total
amount payable for an assessment or examination for the preparation of a report
and any related expenses permitted under s.24 is:
1. If
the assessment or examination is limited to an examination of the material
provided under subsection 42(10), the maximum amount payable is
$450.00.
2. If
the assessment or examination is not limited to nor required by this section to
be limited to an examination of the material provided under subsection 42(10),
the maximum amount payable is,
i.
$900.00 if the
assessment/examination is conducted by one or more members of a health
profession and at least one of them is a physician who is legally authorized to
practice in a medical specialty other than family medicine,
or
ii.
$775.00 if the
assessment/examination is conducted by one or more members of a health
profession who are not physicians.
All amounts payable under this section are to be paid by
the insurer within 30 days after receipt of an invoice for the amounts.
Also under s.42.1(8), amendments have been made to allow
for an insured to apply for mediation even before the insurer sends the insured
to an IE which significantly speeds up the dispute resolution process. The rebuttal assessment is intended to
be a paper review of the file, and not a full assessment as required under s.24
or s.42. Also, there is no monetary
limit on the amount that can be spent by an insured on a rebuttal assessment
with respect to catastrophic determination.
The
addition of section 24.1 is entirely new. For the injured person to get their own
treating practitioner’s fees paid for consulting with the insurer examination
(IE) doctor, they must be the person who prepared the document (disability
certificate, treatment plan, attendant care needs or catastrophic designation)
and the fees they charge cannot exceed the ordinary fee for a 30 minute
consultation.
3.
Procedure for Claiming Benefits – Section 32(6)
Failure to give notice within seven days of an intention
to claim benefits can result in a maximum delay of 45 days of benefits under
sections 35 (IRB), 38 (Med/Rehab), 39 (Attendant Care) or 41 (Death
Benefits). Failure to comply,
without reasonable explanation, means the insurer can delay paying benefits for
up to 45 days after receiving the application or 10 business days after the
insured person has complied with a request for
4.
New: Pre-Claim Examinations
– Section 32.1
This is a new category of examination which allows insurers to
have injured parties examined before a claim for benefits has been made, after
obtaining the written and signed consent of the insured. These examinations can take place at the
insurer’s expense, with the consent of the injured person, while in hospital or
within three days after discharge to determine whether a person is entitled to a
benefit. These assessments can be
multi-disciplinary. Even if it is found that the person
requires a benefit, there is no obligation to pay until application is made and
a disability certificate filed. Although the report cannot be used to
deny a claim for rehabilitation, attendant care, as well as housekeeping and
handyman benefits, it does nevertheless give the insurer the opportunity to
collect
With this new provision, it appears insurers have an
expanded right to examinations. There is no control on what insurers
can pay for IE’s. While it is in
the interest of insurers to control their expenses, it is predicted that there
will be many more of them under the proposed regulations. This provision, while it requires the
consent of the injured person, gives the insurer another advantage as it is
silent on legal representation of the injured person. There is no obligation on the insurer to
either make the request through a legal representative, if the person has one,
or, if no lawyer, advise the injured person of their right to have legal
advice.
5.
When applying for these benefits, the insured will have
to submit a disability certificate.
Within 10 days, the insurer must either pay the benefit or notify that a
s.42 examination is required. An
insurer cannot deny entitlement until it receives a s.42 report, although the
insurer would be able to determine that an insured is not entitled to a
specified benefit before conducting a s.42 exam if the insured fails to provide
a disability certificate requested by the insurer, fails to attend a s.42
examination, or fails to obtain treatment, participate in rehabilitation or make
efforts to return to employment.
Within five days of receiving the s.42 report, the insurer will have to
communicate its decision regarding entitlement and provide the report to the
insured and his or her health practitioner.
Thus if an insured wants to claim a benefit they must
submit a completed disability certificate with the application. Once the insurer gets these two documents
it can pay the benefit or ask for additional
The
insurer can deny the IRB or housekeeping benefit if the injured person did not
submit a disability certificate; or, if the insurer has received an IE under
section 42; or, if the injured person failed to give the person doing the IE the
6.
Determination of Continuing Entitlement to
Specified
If
at any point the insurer wishes to determine whether the insured continues to be
entitled to a benefit, the insurer would
7.
Medical and Rehabilitation Benefits
An
insurer will still have to respond to a treatment plan within 14 days and the
response would indicate what goods and/or services the insurer has agreed to
cover. If the insurer does not
agree to pay for all of the goods and/or services set out in the insured’s
treatment plan, it will have to notify the insured that it requires a s.42
examination. The insurer also has
to notify the insured that it requires a s.42 examination if it believes the
insured has an impairment that falls under a pre-approved framework (PAF). As is currently the case, insurers who
fail to respond to treatment plans within 14 days would be required to pay for
goods and/or services incurred up to the time they did finally respond. Within five days of receiving the s.42
report, the insurer will have to communicate its decision regarding entitlement
and provide a copy of the report to the insured and the insured’s health
practitioner.
An
insurer normally would not be able to deny entitlement until it receives a
report from the s.42 examiner, however the insurer would be able to determine
that there was no entitlement to a specified benefit before conducting a s.42
examination if the insured fails to attend a s.42
examination.
8.
Attendant Care Benefit
An
application for attendant care must be in the form of an assessment of attendant
care needs. The Form 1 (Assessment of Attendant Care Needs) changes to a form
approved by the Superintendent of FSCO, and no longer under the SABS. To apply for an attendant care benefit,
an insured would be required to submit to an assessment of attendant care
needs. Within 10 days, the insurer
has to pay the benefit or notify the insured that it requires a s.42 examination
if it did not agree with the expenses. No expenses are required to be submitted
to qualify for this benefit, however, an insurer can refuse to pay if the
insured does not attend a s.42 examination. Within five days of receiving the s.42
examination report, the insurer would have to communicate its decision regarding
entitlement and provide the report to the insured and his or her health
practitioner. The insurer does not
have to pay for expenses incurred before the Form 1 is submitted.
The
insurer can demand repeated attendant care assessments. When asked, the insured person must
submit the attendant care assessment within 10 days after receiving notice that
the insurer requires one. At the
same time, the insurer can insist on a s.42 IE. Where the person is receiving attendant
care benefits after the second anniversary of the accident (catastrophic cases),
the insurer can only get s.42 IE’s if they are at least a year apart
[s.39(10)(b)].
Five days after getting the s.42 report, the insurer
must tell the injured person and the practitioner who prepared the assessment of
attendant care needs what they have determined regarding entitlement to the
benefit. This section again
requires compliance with s.42(10) relating to the injured person’s obligation to
provide the IE assessor with medical
9.
Determination of Catastrophic Impairment
The
insured will still be required to submit an application for determination of
catastrophic impairment to his or her insurer. Within 30 days of receiving this
application, the insurer has to either notify the insured that it has accepted
the application or that it requires an examination under s.42. An insurer will be able to refuse to pay
any benefits that are payable only if the insured failed to attend a s.42
examination. Within five days of
receiving the s.42 examination report, the insurer will have to communicate its
decision regarding entitlement and provide a copy of the report to the insured
and the insured’s health practitioner.
10.
Examinations Required by Insurers
S.42 examinations are used by insurers to respond to
applications for benefits or to determine whether an insured continues to be
entitled to a benefit. Examinations
are to be conducted by regulated health professionals or experts in vocational
rehabilitation. Treatment and
assessments under a PAF would not be subject to a s.42 examination. When an insurer requests an examination,
it must notify the insured of the reasons, whether it would only involve a paper
review, who will be conducting the examination, and the date, time and place of
the examination. Notices can be
verbal but would also have to be confirmed in writing. Paper reviews would only be conducted to
evaluate requisitions of s.24 exams or to determine whether a proposed treatment
plan involves an impairment that falls under a PAF. Examinations must be scheduled with at
least five days’ notice but not more than ten days after the insured receives
the notice from the insurer. For
catastrophic determinations, the examination must be scheduled with at least
five days’ notice but not more than 20 days after the insured receives notice of
the fact that the insurer requires an examination. While the examination must be within 30
kms (or 50 km is some cases) of the insured person’s residence, that does not
mean the insurer cannot have the doctor travel. This implies that the insurer’s right to
choose the assessor has no practical limit.
TRANSITION
PERIOD
As
of March 1, 2006, DAC’s will be no longer.
However, in the event that a benefit denial has already been issued by an
insurer before the implementation date, the insured will still have to submit to
a DAC. Moreover, if the insurer
initiates a DAC assessment for a catastrophic impairment determination or to
assess attendant care needs before the implementation date, the insurer would
still be required to use a DAC. As
well, if the insurer does not respond to an application for benefits within the
time frames in the SABS before the implementation date, the insurer would still
have to use a DAC.
It
is also important to note that insurers may not request an IE after a DAC
assessment is conducted to use it to overturn the DAC
report.
PREFERRED PROVIDER NETWORKS
(PPN’s)
The idea behind PPN’s is that insurance companies would
treat WAD I, II, and III soft tissue injuries outside of the Pre-Approved
Framework guidelines in an effort to replace an insured’s benefits under the Statutory Accident Benefits Schedule
with an altered, more cost effective set of benefits. Insured persons must voluntary sign a
waiver to be involved with the PPN.
The PPN engages a roster of medical professionals who sign a quality
control agreement with the insurer in an effort to offset the liability of
insurers.
The PPN consists of two phases: the Acute Phase and the Sub-Acute
Phase. The Acute Phase is the first
phase and occurs within the first three weeks after a soft tissue injury is
sustained. The Acute Phase consists
of nine treatment sessions over the course of three weeks. People who claim income replacement
benefits are allowed a maximum of four more sessions over another two weeks to
support their return to work.
The Sub-Acute Phase occurs from three to six weeks
following soft tissue injury and consists of treatment if the insured person is
deemed not fit to function or work at the beginning of the fourth week of
treatment. The Sub-Acute Phase
consists of eight sessions over another three week time span. For people who claim IRB’s, a maximum of
four more sessions over a further two weeks is allowed to support a return to
work. On the other hand, if
treatment is not deemed to be required at all, a patient can be given a home
exercise program with a maximum of three one-on-one
sessions.
Under the PPN scheme, an insurer can send a patient to a
multi-disciplinary evaluation (MDE) at another treatment centre which consists
of a medical exam, functional exam and a psychological screen if necessary.
If the outcome of the MDE
recommends interdisciplinary rehabilitation to facilitate recovery, treatment
will be offered for another two to four weeks.
Under the PAF, a WAD III injury, which is far more
serious and complicated is not treatable, whereas under the PPN, treatment for a
WAD III injury has been restricted to a maximum number of treatment sessions and
then referred for an insurer’s examination. Under the PPN protocol, it is expected
that housekeeping and attendant care are not necessary, except for those with
WAD III injuries. If a claimant is
having difficulty with housekeeping and home care duties, the health
practitioner could undertake an activities of daily living assessment and
in-home visit by a physiotherapist or an occupational therapist. If the assessment reveals that the
claimant needs attendant care, then the health practitioner has to help the
claimant fill out a Form 1. If
housekeeping is required for more than six weeks, the claimant will most likely
have to undergo a multidisciplinary evaluation (MDE). The health practitioner must determine
if the claimant is unable to work and facilitate the completion of a disability
certificate, an OCF 2 and a jobsite assessment.
PPN’s will ultimately limit the treatment that can be
provided to an injured person and removes the treatment decisions from the
insured’s treating health care practitioners to those favoured by the insurer.
ADDRESSING
INSURER BREACHES UNDER THE UNFAIR AND
DECEPTIVE PRACTICES ACT
In
an effort to balance the insurer’s new right under the expanded s.42, there is a
broadening of the behaviour that constitutes an “unfair or deceptive act or
practice” on the part of the insurer as per the new Unfair or Deceptive Acts or
Practices Regulation.
If
an insurer does any of the following, it will be deemed to be an “unfair or
deceptive act or practice”:
These unfair and deceptive acts have to be reported to
the Superintendent of Insurance, who may investigate and order the insurer to
cease doing any act, or remedy the situation or even cease engaging in the
business of insurance. What is
more, the aforementioned acts will be used by insureds to claim punitive damages
against insurance companies.
CONCLUSION
Despite the expected goals of the new regulations with
the elimination of DAC’s, there will likely be little cost saving to insurance
companies and a system that is no less complicated than
before.
It
is also anticipated that there will be far more conflict between IE’s and
treating health care providers than there was between DAC’s and treating health
care providers. IE’s will most
likely be conducted by insurance industry “preferred providers”, meaning that
one can expect the interests of the insurer to be prominent in these
assessments.
One
of the biggest advantages to insurers is the fact that there are no limits in
terms of what can be spent on IE’s or how broad the scope of the IE will be.
Assessments can be conducted from
multiple specialties if so desired. On the other hand, the injured person
cannot afford to do so on the same scale as the insurer. There is a significant administrative
cost to these regulatory changes which merely adds to the burden on the
system.
While DAC’s are to be eliminated, they are being
replaced by many more IE’s.
Instead, effective changes to the system should involve fewer assessments
and dramatic simplification of the regulations. Alternatively, what we have now are more
assessments and more complexity.
Are we really better off?