AAI Limited t/as GIO v Smith
[2022] NSWPICMP 108
•9 May 2022
| DETERMINATION OF REVIEW PANEL | |
| CITATION: | AAI Limited t/as GIO v Smith [2022] NSWPICMP 108 |
| CLAIMANT: | Luningning Smith |
INSURER: | AAI Limited t/as GIO |
| REVIEW PANEL: | Member Belinda Cassidy Dr Drew Dixon Dr Shane Maloney |
| DATE OF DECISION: | 9 May 2022 |
| CATCHWORDS: | MOTOR ACCIDENTS- Motor Accident Injuries Act 2017 (MAI Act); statutory benefits claim; disputes about treatment that has not been provided and treatment expense that has not yet been incurred; causation of injury and whether treatment is related to a motor accident; issue of jurisdiction and interpretation of Schedule 2(2)(b) of the MAI Act; Held- Review Panel and Medical Assessor do not have jurisdiction to determine a dispute about treatment that has not been provided but which may be provided in the future; discussion of section 3.24 MAI Act and the Motor Accident Guidelines and alternative methods of paying for treatment that is needed but not yet paid for; decision in Obeid v AAI Limited t/as AAMI followed. |
| DETERMINATIONS MADE: | The Review Panel revokes the certificate issued by Assessor Herald dated 9 November 2021. |
STATEMENT OF REASONS
INTRODUCTION
Ms Luningning Smith is 70 years old and was involved in a motor accident on 21 July 2018. The claimant was driving her own car with two passengers when a vehicle travelling on the wrong side of the road collided with Ms Smith’s vehicle[1].
[1] This detail is provided in the claim form document contained in the original application for medical assessment (the original application). None of the documents have identification numbers of page numbers.
Ms Smith sustained a fractured left wrist which required surgical fixation with a plate and screws. She also suffered from left shoulder pain, left lateral chest wall pain, left hip, left lower back and left sided neck pain[2].
[2] This detail is provided in the certificate of fitness and capacity attached to the claim form provided with the original application.
On or about 10 August 2018, Ms Smith made a claim for statutory benefits under the Motor Accident Injuries Act 2017 (the MAI Act). The claim was made against GIO, the third-party insurer of the vehicle that collided with Ms Smith’s car. GIO accepted the claim and benefits were paid. On 21 November 2018 the insurer determined that the claimant had sustained more than minor injuries and that GIO therefore had a liability to pay Ms Smith ongoing statutory benefits[3].
[3] This detail is provided in the insurer’s internal review decision provided with the original application.
On 11 November 2020 the claimant’s treating orthopaedic surgeon,
Professor George Murrell asked GIO to approve surgery to the claimant’s right shoulder. Ms Smith argued that despite her injuries being to her left side, her right shoulder became symptomatic due to her favouring her left upper limb after the accident and that her right shoulder surgery was related to the car accident and was reasonable and necessary in the circumstances.
On 22 November 2020, GIO wrote to the claimant and Professor Murrell advising that GIO would not pay for the surgery on the basis that the right shoulder surgery was not related to an injury sustained in the accident and was likely to be caused by pre-existing conditions. On 9 December 2020 the claimant sought an internal review of that decision and on 18 December 2020 GIO affirmed the decision to reject the request.
The dispute about the surgery was referred to the Personal Injury Commission (the Commission) for determination on 4 March 2021.
On 9 November 2021 Assessor Jonathon Herald determined that the claimant’s proposed right shoulder surgery relates to an injury caused by the motor accident and that it was reasonable and necessary for her to have that surgery. He also determined that the surgery would improve Ms Smith’s recovery[4].
[4] It is not clear why Assessor Herald included a reference in the certificate to the treatment ‘improving the recovery’ bearing in mind GIO’s decision that the claimant’ sustained non-minor injuries in the accident. Disputes about whether treatment will improve an injured person’s recovery are only relevant to those injured persons who have been found to have minor injuries and whose statutory benefits have been terminated under section 3.28.
The insurer was dissatisfied with the decision and applied to the President for a review of it under section 7.26 of the MAI Act. The claimant opposed the application.
On 21 February 2022, the delegate of the President of the Commission determined that there was reasonable cause to suspect that Assessor Herald’s medical assessment was incorrect in a material respect and allowed the review to proceed. The President then convened this Review Panel (the Panel).
A preliminary issue as to jurisdiction arose in this matter before the Panel was due to meet. For the reasons set out below, the Panel is of the view that it does not have power to determine the medical dispute and that Assessor Herald did not have power to determine the medical dispute.
LEGISLATIVE FRAMEWORK
Statutory background
The MAI Act provides a scheme of compulsory third party insurance (CTP) for vehicles registered in New South Wales and the licensing and regulation of the private insurers who sell CTP insurance. The MAI Act also provides a scheme of statutory benefits and common law damages to those persons killed or injured in motor accidents in New South Wales.
The MAI Act applies to accidents occurring on or after 1 December 2017. For accidents occurring before that date, the provisions of the Motor Accidents Compensation Act 1999 (the MAC Act) apply. The MAC Act provided a scheme of predominantly fault based damages with limited not-at-fault benefits as well as damages for no fault or blameless accidents[5].
[5] Damages are assessed under Chapter 5, not-at-fault benefits are provided for under the Accident Notification scheme in Part 3.2 and no fault or blameless accidents permit the recovery of damages in some cases according to Chapter 1, Part 1.2 Division 1.
There are two types of claims and two types of benefits provided for in the MAI Act:
(a) claims for statutory income support as well as treatment and care benefits under Part 3 of the Act. These benefits are paid on a not-at-fault and no fault basis[6], and
(b) claims for damages under Part 4 of the Act available where some other person is at fault and in certain no-fault situations[7]. Damages are limited to non-economic loss and certain economic losses set out in section 4.5(1)[8]. Injured persons cannot recover damages for treatment expenses incurred in the past or likely to be incurred in the future.
[6] Section 3.1 provides benefits are payable regardless of whether anyone was at fault and even if the injured person was at fault. There are certain exceptions for example if the claimant was charged with and convicted of a serious driving offence (see section 3.36).
[7] No-fault (formerly blameless accidents) are provided for in Chapter 5.
[8] Past and future loss of earnings or earning capacity, the cost of accommodation and travel, costs of financial management and reimbursement of income tax paid on statutory benefits or workers compensation benefits.
Statutory benefits under the MAI Act
Section 3.1 provides that if someone is injured in a motor accident in NSW after the commencement of the MAI Act, “statutory benefits are payable”. Section 3.2 provides that those statutory benefits are payable “by the relevant insurer” determined in accordance with the provisions of section 3.2 or 3.3. There is no dispute in this matter that Ms Smith was injured in a motor accident to which the provisions of the MAI Act apply and there is no dispute that GIO is the relevant insurer liable to pay those benefits.
Division 3.4 deals with statutory benefits payable for treatment and care and commences with section 3.24 which says:
“(1) An injured person is entitled to statutory benefits for the following expenses (treatment and care expenses) incurred in connection with providing treatment and care for the injured person—
(a) the reasonable cost of treatment and care,
(b) reasonable and necessary travel and accommodation expenses incurred by the injured person in order to obtain treatment and care for which statutory benefits are payable,
(c) if the injured person is under the age of 18 years or otherwise requires assistance to travel for treatment and care, reasonable and necessary travel and accommodation expenses incurred by a parent or other carer of the injured person in order to accompany the injured person while treatment and care for which statutory benefits are payable is being provided.
(2) No statutory benefits are payable for the cost of treatment and care to the extent that the treatment and care concerned was not reasonable and necessary in the circumstances or did not relate to the injury resulting from the motor accident concerned.”
Section 3.25 provides that no statutory benefits are payable for expenses incurred in relation to gratuitous domestic assistance and section 3.26 provides for the payment of statutory benefits for the reasonable expenses incurred in employing someone to provide domestic services to a claimant’s dependents.
Section 3.27 prohibits the payment of statutory benefits unless the treatment and care expenses have been verified “including verification that the expenses have been incurred and the treatment has been provided and it relates to an injury caused by the accident”.
The entitlement to treatment and care expenses continues for life in accordance with section 3.28, so long as the claimant has non-minor injuries and is not wholly or mostly at fault.
Section 3.31(1) empowers the making of Guidelines concerning treatment and care expenses which can limit the amount of benefits payable for any specific treatment or care, designate certain treatment and care as appropriate and therefore deeming it as approved and limit attendant care services. Section 3.31(2) then permits an insurer to refuse payment of treatment that is not approved in the Guidelines. Section 3.31(3) says:
“Nothing in this Division prevents an insurer from –
(a) paying treatment and care expenses that the insurer is not required to pay … under this Division, or
(b) approving further treatment and care for the purposes of any claim.”
Dispute resolution
Section 7.17 defines a medical dispute to mean a dispute between a claimant and an insurer about a “medical assessment matter”.
Schedule 2(2) of the MAI Act provides a list of matters “declared to be medical assessment matters” for the purposes of Part 7 (and in particular sections 7.17).
Schedule 2(2)(b) provides for the resolution of disputes about:
“Whether any treatment and care provided to the injured person is reasonable and necessary in the circumstances or relates to the injury caused by the motor accident for the purposes of section 3.24.”
Section 7.20(1) provides that a medical dispute may be referred for assessment. The claimant referred the dispute about her surgery to the Commission for determination.
Section 7.24 provides for the further assessment of medical disputes and section 7.26 provides for the review of medical assessments. The insurer sought the review of the original assessment by Assessor Herald.
THE ISSUE OF JURISDICTION AND SUBMISSIONS
Procedural chronology
After the Panel was convened and before its first meeting, the Panel identified a preliminary issue as to jurisdiction as follows:
(a) the proposed surgery to the claimant’s right shoulder that has been requested by the claimant has been declined by the insurer. There is clearly a dispute between the two parties but is it a medical assessment matter within the meaning of section 7.17 and Schedule 2(2)(b)?
(b) the wording of Schedule 2(2)(b) refers to disputes to be determined “for the purposes of section 3.24”. Section 3.24(1) refers to expenses “incurred in connection with providing treatment and care …” and (2) says that no treatment and care benefits are payable if the treatment “was not reasonable and necessary” or “did not relate” to an injury caused in the accident. While section 3.24 clearly provides for the reimbursement of expenses relating to treatment that has already occurred, does section 3.24 provide for the pre-approval of treatment that has not yet occurred and a dispute mechanism for occasions when an insurer refuses to pre-approve and commit to the payment of certain treatment?
On 22 March 2022, the Panel issued directions to both parties as follows:
(a) the claimant was, by 25 March 2022, to advise the Panel whether or not she has had her right shoulder rotator cuff repair surgery and in a message to the Panel in the portal she confirmed that she has not. The surgery has not taken place;
(b) the insurer was to lodge submissions about whether the Panel had jurisdiction by 8 April 2022 and on that date, submissions were uploaded, and
(c) the claimant was, by 27 April 2022, to lodge any submissions in reply on the jurisdiction issue. A response was received by the claimant on that date.
On 5 April 2022, a medical review panel in another matter Obeid v AAMI Limited t/as AAMI[9] revoked a certificate of a Medical Assessor and issued a new certificate. The Obeid Panel determined at [90] that the dispute about the payment of future right shoulder surgery was not a medical assessment matter under the MAI Act because:
“… a medical assessment matter is limited to ‘treatment and care provided to the injured person’ and by extension in s 3.24, to expenses incurred in providing treatment and care for the injured person.”
[9] [2022] NSWPICMP 76 (Obeid).
The Obeid decision was published on 14 April 2022 and the Panel brought that decision to the attention of the parties on that date.
The insurer’s submissions
The insurer in this matter says that this Panel does have power to determine the dispute about surgery that had not yet been provided.
The insurer’s submissions are as follows:
(a) the insurer is unaware of this issue having been raised elsewhere since the commencement of the MAI Act [3];
(b) the wording of Schedule 2(2)(b) is different to the equivalent section of the MAC Act [5] and refers to treatment related to the accident “for the purposes of section 3.24” [6];
(c) section 3.24(1) includes the words “providing treatment” which “contemplates treatment proposed but not yet taken place” [8] and treatment “recommended but not yet provided” [12];
(d) the objects of the Act include encouraging “early and appropriate treatment” (section 1.3(2)(a)) and “the early resolution of motor accident claims and the quick, cost effective, and just resolution of disputes” (section 1.3(2)(g)) [9-10];
(e) the word provided in Schedule 2(2)(b) of the MAI Act should not be interpreted narrowly but should be interpreted to comply with the objects and section 3.24 [11], and
(f) “a strict interpretation of the schedule … is inconsistent with the objects of the Act and would cause potentially significant delays in achieving those objects and thereby have a detrimental impact on the scheme.” [13]
The insurer was invited to provide further submissions in the light of the Obeid decision however on 2 May 2022, the insurer advised it did not wish to lodge any further submissions in the matter.
Claimant’s submissions
On 27 April 2022, the claimant advised the Panel through the portal as follows:
“The Claimant is in agreeance with the Insurer’s submissions however, we acknowledge the decision made in the case of Obeid v AAI Ltd t/as AAMI … determining that the Personal Injury Commission does not have the jurisdiction to determine treatment disputes which are proposed.”
These submissions are not clear and the Panel is proceeding on the basis that the claimant is of the view the Panel (and Assessor Herald) has jurisdiction or power to determine Ms Smith’s dispute with GIO about her shoulder surgery.
DOES A MEDICAL ASSESSOR HAVE POWER TO DETERMINE THIS DISPUTE?
The Obeid decision
The Obeid Panel found that Mr Obeid’s treatment had not been provided and therefore no expense had been incurred as required by section 3.24(1). Therefore, the Medical Assessor and the Panel did not have power to determine the dispute before them.
There are many similarities between Mr Obeid’s case and Ms Smith’s. The starting point is that the insurers are from the same family, AAI Limited, although two different insurers, AAMI and GIO. Both claimants were seeking to have rotator cuff repair of the right shoulder, and both had sought pre-approval from the insurer so that the insurer would pay for the procedure and the claimants did not have to pay and then wait for reimbursement. And in both, the treating orthopaedic surgeon was Professor George Murrell.
The claimant in Obeid had argued that the Medical Assessor and by extension the Obeid Panel did have power to determine the dispute about Professor Murrell’s proposed surgery. The insurer in the Obeid matter, AAI Limited t/as AAMI argued that the Medical Assessor and the Panel did not have power to determine the dispute about surgery that had not yet been provided.
AAI Limited’s subsidiary GIO in this matter is arguing the opposite to AAI Limited’s subsidiary AAMI saying the Panel does have power to determine treatment to occur in the future.
The Obeid decision is not binding upon this Panel and the Panel must conduct its own assessment of the matter before it.
The previous scheme and Guidelines
The wording of Schedule 2(2)(b) to the MAI Act differs from the wording of section 58(1)(d) of the MAC Act which provided jurisdiction to Medical Assessors to determine disputes about treatment “provided or to be provided”. In a scheme where damages are to be awarded for both past and future treatment, this power was necessary to resolve medical disputes about treatment that had been provided and treatment that was to be or may be provided in the short term (another round of physiotherapy for an acute condition) which the insurer might then pay for in the long term (knee replacement surgery in 15 years) which would need to be included in an award of damages. Had Ms Smith been injured before 1 December 2017, there is no doubt that a Medical Assessor and a review panel would have been able to determine a dispute about whether her shoulder surgery to be provided as proposed by Professor Murrell was related to her injuries and was reasonable and necessary in the circumstances.
The MAC Act imposed a duty on an insurer to pay for treatment and care expenses “as incurred”[10] and do all things reasonable and necessary to rehabilitate an injured person[11]. These duties do not appear in Division 6.2 of the MAI Act. Under the MAC Act and its claims handling guidelines, a claimant could seek reimbursement of treatment expenses paid or seek pre-approval of treatment to be provided and obtain a commitment to pay from the insurer. A claimant would then recover damages for treatment and care expenses claimed but not paid by the insurer be they expenses incurred in the past or expenses that may be incurred in the future. Any treatment and care expenses paid by the insurer during the life of the claim would be included in the claim for damages but deducted from the damages awarded in accordance with section 83(5).
[10] Section 83 of the MAC Act.
[11] Section 84 of the MAC Act.
Chapter 4 of the Motor Accident Guidelines issued under section 3.31 and 6.1 of the MAI Act provides at clauses 4.73 – 4.99 for the handling of claims and the provision of treatment and care to injured persons. This includes:
(a) the adoption of a “recovery approach” to treatment “tailored to the claimant’s individual circumstances and needs” (4.75);
(b) the development of recovery plans for all claimants (4.81) which is provided to the claimant and their treating doctor (4.88). The claimant must agree to participate in that recovery plan (4.90) there is an obligation on the insurer to provide the treatment and care detailed in the recovery plan (4.84);
(c) the insurer must facilitate the referral of the claimant for treatment to an appropriate and preferred treatment provider (4.95 – 4.97), and
(d) if the insurer receives requests for treatment from the claimant, the insurer must determine whether to allow that treatment or not within 10 days of receipt of the request and notify the claimant and the service provider and / or the treating doctor (4.98 - 4.99).
The three options for the provision of treatment
When Division 3.4 of the MAI Act is considered with Chapter 4 of the Guidelines, there appear to be three ways for an injured person to obtain treatment in the course of a statutory benefits claim:
(a) reimbursement - the injured person will pay for their own treatment and seek reimbursement of the expenses they have incurred from the insurer;
(b) recovery plan - the insurer will develop a recovery plan which includes treatment that the insurer agrees it will pay for, and
(c) pre-approval - a claimant can seek pre-approval from the insurer and a commitment to pay for the treatment.
There is a possible fourth option provided for in section 3.31(1) that is, there is certain treatment that can be approved as appropriate treatment and over which there may not be a dispute. For example, the guidelines might deem a certain number of physiotherapy treatments as appropriate for a certain type of soft tissue injury.
If Ms Smith had followed option (a) above and paid for her surgery and asked the insurer to reimburse her, then, when the insurer had refused, she would clearly have a dispute which Medical Assessor Herald and this Panel would have power to determine. She would have incurred an expense possibly payable under section 3.24. The wording of Schedule 2(2)(b) is clear and gives a medical assessor power to determine a dispute about treatment that has been provided.
If Ms Smith’s right shoulder surgery had formed part of her recovery plan, option (b) above, then presumably there would be no dispute as the recovery plan would have been developed by the insurer in consultation with the claimant and her treatment providers[12] and the recovery plan would have included the surgery. There does not appear to be a mechanism in Schedule 2 of the MAI Act to resolve disputes about the content of recovery plans.
[12] Clause 4.82 of the Motor Accident Guidelines.
Ms Smith has followed option (c) above and asked GIO to pay for her surgery in advance of it happening and GIO has refused to do so. Ms Smith has not had the surgery, has not paid for it herself and has not incurred an expense. The issue before the Panel is whether Schedule 2(2)(b) can provide power to it to determine a dispute not expressly mentioned, that is the power to determine a dispute about treatment that has not occurred, has not been provided and is not part of a recovery plan.
Resolution of the issue of jurisdiction
The Hon Michael Kirby AC CMG in a paper entitled Statutory Interpretation: The meaning of meaning[13] noted the current approach to the task of interpreting legislation required the analysis of text, context and purpose which can be summarised as follows:
(a) The starting point is the text of the legislation.
(b) The “overall objective … is to give effect to the purpose of Parliament as expressed in the text of the statutory provisions”.
(c) The words of the statute should not be considered in isolation and the words in issue should be considered in context of the same sentence, the whole paragraph or the surrounding provisions, if not the entire piece of legislation.
[13] [2011] MelbULawRw 3.
As was said earlier, the text of Schedule 2(2)(b) provides for the resolution of disputes about treatment provided “for the purposes of section 3.24”. The purpose of Schedule 2 is to declare disputes that arise in motor accident claims as either merit review matters, medical assessment matters or miscellaneous claims assessment matters. The Schedule determines who, of the variety or decision makers provided for in part 7 of the Act, has the power to determine what dispute. Schedule 2(2)(b) provides a forum the resolution of a dispute about treatment expenses incurred by an injured person under section 3.24 and determine whether the relevant insurer has a liability to pay for it.
The text of the legislation provides, in section 3.24, for the entitlement to certain treatment and care and for the reimbursement method of payment for treatment expenses incurred. The insurer’s submissions do not engage with the word “incurred”, which uses the past tense but deals with the word “providing” suggesting this contemplates treatment that has not yet occurred. When considering the whole of the first sentence in section 3.24(1) the scheme of statutory benefits involves an entitlement to the payment by the insurer of expenses incurred by the claimant in treating injuries caused by the accident that are reasonable and necessary and properly verified whenever the treatment is undertaken[14]. There is no prohibition here on future treatment, but section 3.24 provides boundaries or limits to all forms of treatment, past and future.
[14] Which will be for 26 weeks or for life depending on section 3.28.
Section 3.31 may provide the legislative basis for the two alternative methods of obtaining treatment for accident-related injuries namely the recovery plan method (section 3.31(1)) or the pre-approval method (section 3.31(3)(b)).
The Panel agrees with the insurer that the objects of the Act are to encourage the early provision of treatment and section 3.34 and the Guidelines achieve this. Certainly, the recovery plan method of obtaining treatment is designed with that in mind (agree up front and early on with the claimant and their treatment providers to a course of treatment and agree on the cost of it). The pre-approval method also achieves that aim because for example, an impecunious claimant can get the treatment they need, when they need it and without having to save for it.
The insurer argues that the words “treatment provided” should not be interpreted narrowly and should be read to enable disputes about treatment that is “to be provided” to be referred to Medical Assessors and Review Panels. Whether a word or phrase is to be interpreted widely or narrowly applies when there is a lack of clarity in the application of the word. When clause 2(b) of Schedule 2 is read with the whole of section 3.24 there is no ambiguity in the Panel’s view. There is jurisdiction to determine disputes about treatment which has been provided and where an expense has been incurred. There is no jurisdiction to determine disputes about treatment which has not been provided and where no expense has been incurred.
There is no other provision dealing with disputes about the medical issues concerning treatment for persons with non-minor injuries[15]. In particular, there are no provisions in the MAI Act dealing with disputes about the contents of recovery plans or disputes about whether pre-approval should be granted or refused and whether the insurer should be required to pay for treatment and commit to the incurring of an expense.
[15] Disputes about the cost of treatment and care are a merit review matter found in Schedule 2(1)(i). For persons with minor injuries, Schedule 2(2)(c) declares that whether treatment or care will improve recovery is a medical assessment matter.
CONCLUSION
It follows therefore that in this Panel’s view, there is no power in clause (2)(b) of Schedule 2 to the Act for a Medical Assessor or a Panel to determine whether treatment that has not been provided is related to the accident caused injuries or whether that treatment is reasonable and necessary in the circumstances.
While the Panel agrees with the insurer’s submissions that one of the objects of the Act is to provide for the early resolution of disputes that arise in connection with claims, this object would not be achieved if the Panel were to attempt to resolve a dispute over which they have no jurisdiction.
As the Panel is of that view, Assessor Herald had no power to certify
Ms Smith’s shoulder surgery as related to the accident and reasonable and necessary and his certificate should not stand.
The Panel notes that the Obeid Panel revoked the original Assessor’s certificate because “It would be unfair to leave a certificate made without power undisturbed when the Panel has the power to revoke a certificate”.[16]
[16] Paragraph [92] of the Obeid decision and the reference is to section 7.26(7) of the MAI Act.
The Panel sought submissions from the parties as to whether they agreed to this Panel adopting the same approach as the Obeid Panel. While the insurer agreed, the claimant neither agreed nor opposed to proposal.
While there is no doubt that the Panel has power under section 7.26(7) to confirm or revoke a certificate of assessment, it is arguable that the Panel only has power to do so in respect of a valid certificate of assessment. If Medical Assessor Herald had no power to assess the dispute about treatment not yet provided, then any certificate he has issued may have no foundation. However, in the absence of any argument on that point the Panel adopts the approach of the Obeid Panel and will revoke the certificate.
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