Amey and Telstra Corporation Limited (Compensation)
[2018] AATA 1847
•21 June 2018
Amey and Telstra Corporation Limited (Compensation) [2018] AATA 1847 (21 June 2018)
Division:General Division
File Number: 2016/6045
Re:Brian Amey
APPLICANT
AndTelstra Corporation Limited
RESPONDENT
DECISION
Tribunal:Deputy President S A Forgie
Date:21 June 2018
Place:Melbourne
The Tribunal decides that:
the amount of compensation that is appropriate to the provision of Phonak Audeo V50-312 BTE hearing aids and all associated costs is:
(1)if the hearing aids have already been provided and fitted, the sum of $4,272.00; or
(2)if the hearing aids have not already been provided and fitted, an amount calculated in accordance with the respondent’s Schedule of Fees in effect at the time they are provided and fitted.
..................[sgd]..................................................
S A FORGIE
Deputy President
COMPENSATION – reasonable medical treatment – licensee liable to pay appropriate compensation for reasonable medical treatment – reviewable decision varied.
Cases
Alexandra Private Geriatric Hospital Pty Ltd v Blewett (1984) 2 FCR 368; 56 ALR 265
Commission of the Safety, Rehabilitation and Compensation of Commonwealth Employees v Horan [1991] FCA 208
Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409; 24 ALR 577; 2 ALD 60
Re Horan and Comcare [1990] AATA 278; 21 ALD 621; 12 AAR 578
Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24; 66 ALR 299
Re Award Under Criminal Injuries Compensation Ordinance; Ex part Baker (1987) 71 ACTR 44
Re Byrne and Department of Defence (1997) 25 AAR 510
Re Precup and ASP Ship Management [2015] AATA 467
Re Sinclair and Comcare [2002] AATA 23; (2002) 34 AAR 340; 67 ALD 247
Legislation
Safety Rehabilitation and Compensation Act 1988 ss 4, 14, 15, 16
Seafarers Rehabilitation and Compensation Act 1992
Criminal Injuries Compensation Ordinance 1983 (ACT)
Other Material
Telstra Hearing Device Policy
REASONS FOR DECISION
Deputy President SA Forgie
Mr Brian Amey was employed by the Telstra Corporation Limited (Telstra) as a Technician Assistant for almost 30 years. He left that employment in 1990 but Telstra accepted liability for his hearing loss under s 14 of the Safety, Rehabilitation and Compensation Act 1988 (SRC Act). It did so on 17 June 2011 after receiving his claim dated 22 February 2011. When Mr Amey subsequently claimed permanent impairment compensation in respect of his hearing loss, Telstra accepted liability on 20 July 2011. Initially, it determined that Mr Amey was entitled to a lump sum payment of $3,614.95 but increased this to $3,390.69 on 19 August 2011 after reconsidering its initial decision.
While waiting for the resolution of his claim, Mr Amey, who had been a client of the Melbourne Audiology Centre Pty Ltd (MAC) since December 2010, was fitted with hearing aids on 10 March 2011. Telstra did not pay compensation for them as it was yet to accept liability but it did pay the costs associated with his attendance at MAC and costs of maintaining his hearing aids and reviewing his needs from December 2011. On 15 April 2016, Ms Arasu, who has cared for Mr Amey at MAC’s Dandenong Clinic since December 2010, assessed that he required new hearing aids. It is agreed between Mr Amey and Telstra that the Phonak Audeo V50-312 BTE hearing aids (PA hearing aids) she recommended for him are appropriate as are services associated with the provision of them to Mr Amey. What is in issue between them is the price of the PA hearing aids. MAC sent a quotation to Telstra in the sum of $5,910.00 for the hearing needs assessment and the provision of hearing aids. Telstra declined to accept a quotation in a form that bundled together the cost of the hearing aids with the costs of the various services and that did not itemise those costs. It also determined that it was liable to pay the amount assessed in accordance with its Schedule of Fees. That was stated to be an amount of $4,172.00 which included:[1]
[1] Letter to Mr Amey from Telstra dated 16 September 2016: T documents; T14 at 63
(1)
Two Audeo hearing aids at a wholesale price of $1,246.00 per hearing aid.
$2,492.00
(2)
Hearing Needs Assessment with an Audiologist.
$ 175.00
(3)
Handling Fee including GST ($250+$25).
$ 275.00
(4)
Fitting of hearing aids including all necessary hearing rehabilitation in the first 12 months following supply and fitting (binaural).
$1,100.00
(5)
Supply of batteries/consumables at $115.00 per aid.
$ 230.00
I note that the individual figures add up to $4,272.00 but this does not alter the matter in issue, which is whether Telstra should pay MAC on its quotation or whether it is entitled to ask for an unbundled quotation and to pay according to its Schedule of Fees. It is not clear to me whether Mr Amey has received his AP hearing aids or not. If he has, I have decided that the amount of compensation payable to him under s 16 of the SRC Act is $4,272.00. If it has not, I find that Mr Amey is entitled to compensation under s 16 in the amount determined under its Schedule of Fees current at the time the AP hearing aids are provided.
LEGISLATIVE FRAMEWORK
Subject to Part II of the SRC Act, Comcare, and so Telstra,[2] is liable to pay compensation in accordance with the terms of that legislation respect of an injury suffered by an employee if that injury results in, among other outcomes, permanent impairment.[3] Section 16 is concerned with compensation that is paid in respect of medical expenses and related matters. Section 16(1), which applies whether or not an injury results in death, incapacity for work or impairment,[4] provides:
“Where an employee suffers an injury, … [Telstra] is liable to pay, in respect of the cost of medical treatment obtained in relation to the injury (being treatment that it was reasonable for the employee to obtain in the circumstances), compensation of such amount as … [Telstra] determines is appropriate to that medical treatment.”
[2] Telstra is a corporation holding a licence that is in force under Part VIII of the SRC Act. Therefore it is a “licensed corporation” as that expression is defined in s 4(1) and, for the purposes of Part II, any reference to “Comcare” is a reference to Telstra as a licensed corporation and so a “licensee”: SRC Act; s 4(10A).
[3] SRC Act; s 14(1)
[4] SRC Act; s 16(2)
For the purposes of s 16(1), s 16(3) provides:
“… the cost of medical treatment shall, in a case where the treatment involves the supply, replacement or repair of property used by the employee, be deemed to include any fees or charges paid or payable by the employee to a legally qualified medical practitioner or dentist or other qualified person for a consultation, examination, prescription or other service reasonably required in connection with that supply, replacement or repair.”
If an employee has paid the cost of the medical treatment, the amount of compensation payable under s 16(1) is payable by Telstra to, or in accordance with the employee’s directions.[5] Where the employee has not paid the cost, the amount of compensation payable by Telstra is payable to the person to whom it is payable.[6]
[5] SRC Act; s 16(4)(a)
[6] SRC Act; s 16(4)(c)
Provided the journey was reasonable having regard to ss 16(7) and (8), Telstra is liable to pay compensation to the employee in respect of his or her making a necessary journey for the purpose of obtaining medical treatment in respect of which compensation is payable. The amount is worked out on a rate specified by the Minister by legislative instrument multiplied by the number of whole kilometres Telstra determines to have been the reasonable length of the journey that was necessary for the employee to make.[7]
[7] SRC Act; s 16(6)
THE CONTENTIONS
On behalf of Mr Amey, Ms Bradey of counsel submitted that the amount of $5,190.00 as quoted by his treating audiologist should be accepted by Telstra as the appropriate amount. MAC, which is Mr Amey’s treating audiologist, is unable to provide the PA hearing aids for sum of $4,172.00 offered by Telstra. MAC is being asked to provide the hearing aids at a wholesale price when usual audiologist practice is to charge a margin on that price. Ms Bradey relied on the cases of Re Byrne and Department of Defence[8] (Byrne), Re Sinclair and Comcare[9] (Sinclair) and Re Precup and ASP Ship Management[10] (Precup).
[8] (1997) 25 AAR 510; Dr Campbell
[9] [2002] AATA 23; (2002) 34 AAR 340; 67 ALD 247; Ms Cowdroy, Member
[10] [2015] AATA 467; Deputy President Constance
The amount charged by MAC is not so in excess of standard charges as to classify it as not being an appropriate charge for Mr Amey’s medical treatment. Section 16 of the SRC Act does not contemplate that there will be a co-contribution by the employee. In that regard, it is to be contrasted with s 29 which does contemplate that will happen. Consistently with the principles in Drake v Minister for Immigration and Ethnic Affairs,[11] Telstra may have a policy but its policy may not abrogate from its duty to determine what is “appropriate”. What is “appropriate” must be determined having regard to Mr Amey’s circumstances and commercial reality. Section 16 is not designed to be a cost saving measure for Comcare or for licensees such as Telstra. Evidence that the PA hearing aids can be provided to Mr Amey for a lesser amount than MAC charges is not evidence that MAC’s charges are inappropriate. The practical effect of a policy that effectively requires Mr Amey to attend a provider other than his chosen provider fetters his choice. Telstra does not have power to fetter his choice. He has a therapeutic relationship with his audiologist at MAC and feels comfortable with her. Mr Amey is a private client of MAC and MAC charges him as such. There is no agreement between MAC and Telstra.
[11] (1979) 46 FLR 409; 24 ALR 577; 2 ALD 60at 590; 70 per Bowen CJ and Deane J and at 602;80 per Smithers J
On behalf of Telstra, Mr Wallace of counsel submitted that the issue of reasonableness goes to the treatment itself and not to the amount of compensation that is payable for that treatment. The amount of compensation payable is that determined by Telstra as appropriate. It is a discretionary decision that it must make and the presentation to it of a bundled quotation of $5,190.00 does not allow it to make that decision. The quotation is for an amount some $2,000.00 more than the PA hearing aids can be provided to Mr Amey by other audiologists. Its determination of $4,172.00 reflects the amount for which it can be provided. Apart from Mr Amey’s wish to remain with MAC, there is no suggestion in the evidence that MAC can give a better service. Mr Amey, however, has only ever attended Hearing Life, which offered a free consultation at the beginning of the 2000s and then MAC, to whom he was referred by his then solicitors, Velos Lawyers (Velos). Mr John Velos, the firm’s Principal, owns MAC and there was a clear conflict of interest when he referred Mr Amey to MAC while acting for him in relation to his claim for compensation.
Telstra does not wish to place a fetter on Mr Amey’s ability to have the PA hearing aids provided or to choose a service provider other than MAC if he wishes to do so. There are what Mr Wallace described as a “plethora of providers” near his home.
CONSIDERATION
An amount Comcare or a licensee determines is appropriate to medical treatment that was reasonable for the employee to obtain
A. Examples of bases on which compensation is determined under SRC Act
The SRC Act provides for workers’ compensation for employees of the Commonwealth and of corporations which are licensees. What is meant by “compensation” is not defined as such but its meaning becomes clear from Part II of the SRC Act. It is an amount of money that is to be paid for the various losses or expenses as described in that Part. Each one is the subject of a separate section in Part II and each section describes the loss or expense by reference to parameters it sets out.
Take s 15, for example, which applies to a situation in which an employee has an accident arising out of or in the course of his or her employment by the Commonwealth or by a licensee but the accident does not result in an injury but it does result in the loss of, or damage to, the employee’s property. If those criteria are met, the employee is not entitled to compensation in the form of a payment to replace the property. The employee’s entitlement, and the corresponding obligation of Comcare or of a licensee, is compensation “… of an amount equal to the amount of the expenditure reasonably incurred by the employee in the necessary replacement or repair of the property.”[12] (emphasis added). The amount of compensation is necessarily constrained by what the expenditure that has been “reasonably incurred” in not just the “replacement or repair” of the property but in the “necessary replacement or repair” (emphasis added) of the property. It may be that repair of, for example, a person’s dentures is necessary but that their replacement is not. That will be a matter of evidence.
[12] SRC Act; s 15(1)
Having determined the extent of what amounts to “necessary replacement or repair”, the next step is to determine the amount of expenditure that has been “reasonably incurred” by the employee in doing so. Again, that becomes a matter of evidence having regard to such matters as the nature of the property being necessarily replaced if that is the case, the nature and extent of the repairs that are necessary repairs, and the estimates of costs obtained from an appropriate number of repairers or, if being replaced, suppliers. Among those repairers or suppliers may be the employee’s preferred repairer or supplier but that will generally be of no moment in determining what expenditure has been “reasonably incurred”. The employee’s freedom to choose his or her preferred repairer or supplier is not curtailed in this process. He or she may choose whomsoever he or she wishes and pay whatever he or she is prepared to pay but the amount of compensation will not be determined by reference to the amount quoted by that repairer or supplier.
I do not presume to draw any conclusions regarding the interpretation of s 15 for I am using it only as an example of one of the various ways in which the amount of compensation is determined under Part II of the SRC Act. If I were considering it further, I might have regard to comments made in relation to compensation for “the expense reasonably incurred by him as a consequence of the death” in s 5(2) of the Criminal Injuries Compensation Ordinance 1983 (ACT) by Kelly J in Re Award Under Criminal Injuries Compensation Ordinance; Ex part Baker:[13]
“… It seems to me that the expression ‘the expense reasonably incurred by him as a consequence of the death’, used as it is in benevolent, remedial legislation, ought to be given as wide an interpretation as its words can reasonably bear.
” It is clear that the cost of a funeral is such an expense. It is clear also that having regard to ordinary community standards, the cost of a headstone, memorial or memorial plate would be regarded by the average member of the community as an expense reasonably incurred by one responsible for the burial of a dead person.
It must necessarily be a matter of degree and, in every case, … must be one of fact.”[14]
[13] (1987) 71 ACTR 44
[14] (1987) 71 ACTR 44 at 45-46
While this passage might be useful in considering the amount that is “reasonably incurred” under s 15, it would not be useful in determining the amount of compensation payable under the SRC Act in respect of funeral expenses. Section 18 provides that the amount of compensation is the amount that “Comcare [or licensee] considers reasonable having regard to: (a) the charges ordinarily made for funerals in the place where the funeral was carried out; and (b) any amount paid or payable in respect of the cost of the funeral under any other law of the Commonwealth” (emphasis added). Determination of what is reasonable is left to what Comcare or the licensee considers reasonable rather than, as is the case under s 15, to what has been “reasonably incurred”. The tests have subtle differences and the two approaches illustrate the care that must be taken to have regard to the way in which Parliament requires the amount of compensation to be determined for each type of compensation that is payable.
B. Basis on which compensation is determined under section 16 of the SRC Act
Section 16 takes a different approach altogether. It does not refer to “expenditure reasonably incurred by the employee”, as is the case in s 15, or to the amount that Comcare or the licensee “considers reasonable” having regard to certain matters, as is the case with s 18. Liability under s 16 is to pay “compensation of such amount as Comcare determines is appropriate to that medical treatment” where “that medical treatment” is “medical treatment obtained in relation to the injury (being treatment that it was reasonable for the employee to obtain in the circumstances)”.[15] Assessment of what is “reasonable … in the circumstances” refers only to the medical treatment obtained by the employee. It does not apply to the compensation determined by Comcare or the licensee. What Comcare or the licensee must determine is the amount that is “appropriate to that medical treatment” being the medical treatment that it was reasonable for the employee to obtain in the circumstances.
[15] The supply of the AP hearing aids is “medical treatment” within paragraph (f) of the definition of that term in s 4(1) of the SRC Act: “the supply, replacement or repair of an artificial limb or other artificial substitute or of a medical, surgical or other similar aid or appliance”.
What amount is “appropriate” to particular medical treatment is the amount that is “suitable or proper”[16] to pay for that medical treatment. That does not take me much further but an amount that is appropriate amount must also be an amount that is suitable or proper to pay having regard to the fact that payment is made under the SRC Act by way of compensation. Whether that legislation is seen as establishing some form or insurance scheme or as benevolent and remedial legislation providing benefits for workers who are injured in the workplace, compensation is paid as a consequence of their suffering an injury as defined in that legislation and, in so far as money can do so, to make up for particular losses that they suffer as a result of an injury. In a case such as this, the supply of the PA hearing aids is accepted as medical treatment that it was reasonable for Mr Amey to obtain. The amount of compensation determined by Parliament to be payable is “such amount as Comcare [and so Telstra] determines is appropriate to …” the supply of those PA hearing aids.
[16] Chambers 21st Century Dictionary, 1999, reprinted 2004
In choosing to frame the amount of compensation that is payable in that way, Parliament has made it clear that the payment of compensation under s 16 is not predicated on any notion that an employee necessarily recovers all of his or her costs. An employee may do so but only if the costs incurred in obtaining medical treatment reflect “such amount as Comcare [and so Telstra] determines is appropriate to …” obtain that treatment. This is not inconsistent with the view expressed by Dr Campbell, Member, in Byrne when he found that any requirement of a contribution by an employee was not permitted by s 16(1) of the SRC Act. He did so on the basis that s 16 is silent on the matter and that any contribution as such is inconsistent with its proper interpretation.[17]
[17] (1997) 25 AAR 510 at 514
That is not to say that an employee is restricted in his or her choice of the provider of medical treatment. There is nothing in s 16 or in the SRC Act that restricts an employee’s choice of provider of medical treatment as such. An employee may go to whomever he or she pleases and pay whatever he or she is prepared to pay but it is clear from s 16(6) that Comcare or a licensee is not liable to pay compensation in the form of reimbursement of travel costs regardless of where the employee chooses to seek medical treatment and how he or she travels to undergo it. Under s 16(6)(b)(i), Comcare’s liability arises if the employee “reasonably incurs expenditure” in “making a necessary journey for the purpose of obtaining that medical treatment”. If both of those criteria are satisfied, Comcare or the licensee’s liability is not unlimited. It is restricted to an amount worked out by reference to a rate per kilometre specified by the Minister multiplied by the number of kilometres, which Comcare or the licensee “… determines to have been the reasonable length of such a journey as it was necessary for the employee to make …”.[18]
[18] SRC Act; s 16(6)(c)
When it comes to compensation for remaining in a place for the purpose of obtaining medical treatment, the amount is not determined by reference to what Comcare or a licensee considers reasonable but by the expenditure that has been “reasonably incurred in remaining for that purpose”.[19] That is a different basis for assessment of compensation from that prescribed for travel costs but, again, it does not allow full cost recovery unless that cost is equivalent to an amount of “expenditure … reasonably incurred”.
C.What is an “amount appropriate” to the medical treatment it was reasonable for an employee to obtain in the circumstances?
[19] SRC At; ss 16(6)(b)Iii) and (d)
What is an “appropriate” amount is the proper amount that is payable to obtain the medical treatment that was reasonable to obtain in the circumstances. In this case, it is the proper amount for Mr Amey to be provided with PA hearing aids for there is no dispute that it was reasonable for him to obtain those hearing aids. Under s 16(3), that amount must include any fees or charges paid or payable by the employee to, in this case, a qualified person for any service “reasonably required” in connection with that supply.
What is appropriate in those terms is not necessarily the amount that the employee has paid or has been quoted for the medical treatment concerned. The SRC Act does not require that and Comcare or a licensee is entitled to determine the amount that is appropriate by reference to the amount for which the medical treatment can be obtained by the employee. Having regard to their obligation to pay for the costs of a journey necessary to obtain the medical treatment, Comcare or a licensee cannot be guided by the amount charged by any provider regardless of its proximity to the employee and the employee’s ability to have access to the provider. They must be guided by the amount charged by a provider, which is accessible by the employee and which offers the particular medical treatment.[20]
[20] This is consistent with the views expressed by Deputy President Todd in Re Horan and Comcare [1990] AATA 278; 21 ALD 621; 12 AAR 578 when he said at 626; 584: “... It is doubtful how far the concept of necessity, which is built into this provision, can be taken. Unless the medical treatment is virtually at a person’s front door, it will be necessary to make a journey to get to the place where it is to be administered, and that then becomes a necessary journey. It may, however, involve the notion, emphasised by the provisions of s 16(8)(a), that a journey of the kind in fact made was an unnecessary journey because a much shorter journey might have been made to a person or place where the treatment was available. Such an enquiry could give rise to the sort of problems that the Tribunal faced in relation to cases under the Isolated Patients Travel and Assistance Scheme. I shall assume for the purposes of this case that this is what the expression ‘necessary journey’ means.” This was not a point raised on appeal to the Federal Court: Commission of the Safety, Rehabilitation and Compensation of Commonwealth Employees v Horan [1991] FCA 208; Neaves J.
The decision of Sinclair, to which I was referred, pays regard to the amount actually paid by an employee. Ms Sinclair had paid $50 for each of her physiotherapy treatments. The Tribunal found that the majority of service providers charged between $45 and $55 per treatment. Comcare had determined that the amount of $36.80 was the amount appropriate to that treatment. The Tribunal concluded:
“… [I]n the matter presently before the Tribunal, the applicant has expended $50 for physiotherapy treatments. Such a cost, whilst slightly higher than suburban practitioners, is not so far in excess of standard charges to classify it as not being an appropriate charge for that medical treatment.
The standard practice of Comcare in paying the scheduled fee for services can mean that an employee is compelled to subsidise the cost of medical treatments to a not insubstantial degree, particularly when the necessity for medical treatment is frequent and protracted. In having regard to the costs expended by an employee, it is not the case that Comcare is having regard to the employee’s personal circumstances, rather it is having regard to the practical realities. In so finding, the Tribunal rejects the notion that appropriateness is measured solely by reference to the scheduled fee and prefers the notion that compensation should reflect the realities of the situation.”[21]
[21] [2002] AATA 23; (2002) 34 AAR 340; 67 ALD 247 at [18]-[19]; 247-248
If this is passage is intended to mean that the practical realities are the guiding influence, I would be in qualified agreement. Practical realities are a guiding influence in so far as they assist in determining what amount is appropriate to the medical treatment. What is appropriate must be an amount that enables the employee to obtain the medical treatment that has already been determined to be reasonable for the employee to obtain. It is not about an employee’s being able to obtain that medical treatment from the provider of his or her choice. Equally, it is not about the amount for which the medical treatment could be obtained by the employee without regard to the location of where the treatment is available for that amount and the employee’s ability to have access to that treatment. The amount that is appropriate must be an amount for which the medical treatment determined to be reasonable can realistically be obtained by the employee in a location to which he or she could reasonably be expected to travel.
Ms Bradey also referred to a passage from the reasons for decision of Deputy President Constance in Precup in support of her submission that:
“In the present case, the Respondent has determined the appropriateness of treatment by reference to the Fee Schedule contained in its Hearing Device Policy. The decision in both Sinclair and Precup confirm that it is an error for them to do so and they must consider the practical reality of the specific situation of the Applicant.”
Precup was concerned with the interpretation of s 28 of the Seafarers Rehabilitation and Compensation Act 1992. It is written in similar, although not identical terms to s 16 of the SRC Act. Section 28(1) reads:
“If an employee:
(a) suffers an injury; and
(b) obtains medical treatment for the injury, being treatment that it was reasonable for the employee to obtain in the circumstances;
compensation is payable for the cost of the medical treatment, of such amount as is appropriate, having regard to the nature of the treatment.”
After referring to Sinclair, the reasons for decision in Precup continued:
“… The fact that the Applicant paid a higher fee for physiotherapy sessions compared to most suburban practitioners was properly considered by the Tribunal at the appropriateness stage.
In such cases, the fact that the treatment could be provided at a lower rate does not mean that treatment was unreasonable for an employee to obtain. Under the scheme of compensation provided by the Act, an injured worker is free to have whatever treatment at whatever cost he or she determines. The Act provides for a determination of the amount of compensation which the employer must pay for that treatment. Subsection 28(1) is clear that the compensation payable is not necessarily equal to the actual cost incurred. It is qualified in that the compensation payable is only that amount which is appropriate, having regard to the nature of the treatment.
This is not to say that financial considerations may not arise when considering whether treatment was reasonable for an employee to obtain. The Federal Court has made it clear that a decision maker should consider the cost of treatment in assessing reasonableness. In Comcare Australia v Rope [[2004] FCA 540 at [17]] the Court said, in part:
… the reference in s 16(1) to treatment being ‘reasonable to obtain in the circumstances’ is a clear indication that, in this case, the tribunal was required to engage in a costs/benefit analysis in relation to PNI treatment. The Tribunal needed, among other things, to weigh the benefit of PNI treatment against the cost of obtaining it (given that the treatment was available only in Townsville), taking into account any other treatment available to Ms Rope.
In Rope, the dispute related to whether the type of treatment proposed was reasonable for Ms Rope to obtain in view of the cost of travel to obtain it. In this matter, it is not in dispute that the use of a catheter, a leg bag and associated tubing, and the procedure of anal irrigation are proper types of treatment. The dispute is concerned primarily with the amount which the Company should pay Mr Precup to compensate him for the cost of obtaining the necessary aids. These are matters to be considered under that part of the subsection dealing with the appropriateness of the amount of compensation to be paid.”[22]
[22] [2015] AATA 467 at [71]-[73]
I was referred only to [72] of Precup but I have given that paragraph context to show that it was only drawing a distinction between an assessment of treatment that was reasonable (which may include consideration of the cost of the treatment) and an assessment of the amount of compensation that is appropriate, having regard to the nature of the treatment. The two issues must be treated separately. I do not think it goes further than that.
The place of policy in determining what is an appropriate amount
Once the parameters of an administrative decision-maker’s powers have been identified by reference to the enactment under which the decision is to be made,[23] that administrative decision-maker is entitled to develop a policy that is consistent with those parameters and that allows account to be had of the particular circumstances of each case. Within those boundaries, the person to whom the decision-making power is entrusted may develop a policy setting out guidelines relevant to the way in which the discretionary power will be exercised either by the person or, where delegation is permitted, by that person’s delegates.
[23] Those boundaries are to be found either expressly stated in the enactment or they may be implicit when regard is had to the subject matter of the enactment under which the decision is made as well as from object and underlying policy of that enactment: Alexandra Private Geriatric Hospital Pty Ltd v Blewett (1984) 2 FCR 368; 56 ALR 265 at 375; 272 per Woodward J and see also Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24; 66 ALR 299; Gibbs CJ, Mason, Brennan, Deane and Dawson JJ at 39-40; 308-309 per Mason J with whom Gibbs CJ and Dawson J agreed
The role of such policy was discussed by the Tribunal’s first President, Brennan J, in Re Drake and Minister for Immigration and Ethnic Affairs (No 2)[24] (Drake (No 2)) when considering then ss 12 and 13 of the Migration Act 1958 (Migration Act) requiring the Minister to determine whether or not to deport a person in certain circumstances. The passage is consistent with the earlier judgments of Bowen CJ and of Smithers J in Drake v Minister for Immigration and Ethnic Affairs.[25] In Drake (No 2), Brennan J said:
“… The Minister is free to exercise that power without adopting a policy as to the standards and values to which he will have regard in deciding particular cases. He is equally free, in point of law, to adopt such a policy in order to guide him in the exercise of the statutory discretion, provided the policy is consistent with the statute. …
There are powerful considerations in favour of a Minister adopting a guiding policy. It can serve to focus attention on the purpose attention which the exercise of the discretion is calculated to achieve, and thereby to assist the Minister and others to see more clearly, in each case, the desirability of exercising the power in one way or another. Decision-making is facilitated by the guidance given by an adopted policy, and the integrity of decision-making in particular cases is the better assured if decisions can be tested against such a policy. By diminishing the importance of individual predilection, an adopted policy can diminish the inconsistencies which might otherwise appear in a series of decisions, and enhance the sense of satisfaction with the fairness and continuity of the administrative process.
Of course, a policy must be consistent with the statute. It must allow the Minister to take into account the relevant circumstances, it must not require him to take into account irrelevant circumstances, and it must not serve a purpose foreign to the purpose for which the discretionary power was created. A policy which contravenes these criteria would be inconsistent with the statute … The Minister must decide each of the cases under ss 12 and 13 on its merits. His discretion cannot be truncated by a policy as to preclude consideration of the merits of specified classes of cases. A fetter of that kind would be objectionable, even though it were adopted by the Minister on his own initiative. A Minister’s policy, formed for the purposes of ss 12 and 13 of the Migration Act, must leave him free to consider the unique circumstances of each case, and no part of a lawful policy can determine in advance the decision which the Minister will make in the circumstances of a given case.
That is not to deny the lawfulness of adopting an appropriate policy which guides but does not control the making of decisions, a policy which is informative of the standards and values which the Minister usually applies. There is a distinction to be drawn between an unlawful policy which creates a fetter purporting to limit the range of discretion conferred by a statute, and a lawful policy which leaves the range of discretion intact while guiding the exercise of the power. …”[26]
[24] (1979) 2 ALD 634
[25] (1979) 24 ALR 577; 2 ALD 60 at 590; 70 per Bowen CJ and Deane J and at 602;80 per Smithers J
[26] (1979) 2 ALD 634 at 640-641
Telstra had developed the following policy that was in place in April 2016 when Mr Amey was provided with AP hearing aids. The Hearing Device Policy was written in a form addressed to an employee advising him or her of the circumstances in which it would consider a claim. First, Telstra required the employee to submit a completed Telstra Hearing Device Request Form, which is signed and dated by both the employee and the hearing treatment provider. Second, Telstra required the employee to submit a copy of his or her most recent audiogram and speech discrimination test results. The Hearing Device Policy contained the following advice:
“Incomplete forms will not allow Telstra to consider your claim for a hearing device. The Telstra Hearing Device Request Form must be signed and dated by you and your hearing treatment provider before being considered by Telstra. Quotations provided directly by the hearing treatment provider, without the information required, cannot be considered and assessed.”[27]
[27] Exhibit 1; Attachment D
The Hearing Device Policy went on to require all quotations to be sent to Telstra for consideration and for Telstra to give written approval before devices are supplied and fitted. All quotations must specify the make and model of the recommended devices and include the supply and fitting costs in line with Telstra’s Schedule of Fees. “A full itemisation of fees must be provided with all quotes”, the Hearing Device Policy continued. Furthermore:
“· Telstra will not pay above the Telstra fee schedule for the provision of hearing devices unless documented exceptional circumstances are provided and accepted by Telstra.
·The device selection rationale must address the following:
°Your hearing and communication needs in day to day life including home, work, education, community, recreational and social activities.
°Your general health and/or specific physical issues including frailty, vision and manual dexterity.
°A clinical justification for the level of technology and aid style recommended. This should clearly explain how the selected device will meet the stated communication needs.
°If the quotation for the device requested is above the price approved in Item THA 003 further explanation of the exceptional circumstances is required. The quotation should document more challenging listening needs (eg when the client is still working full time, is a community leader etc) and why and how a more expensive device will better meet those needs.
°Requests for devices above the price detailed in THA 003 will all be considered individually on merit and may require additional approval from the Telstra Audiology Advisor.
°Requests for assistive listening devices will be considered on merit if there is sufficient documented clinical need, and the request is made at the same time or within 12 months of the provision of the device.”[28]
[28] Exhibit 1; Attachment D
After setting out its replacement policy and those items and services for which it was not obliged to pay, Telstra’s Hearing Device Policy set out a Schedule of Fees. In April 2016, the Schedule of Fees was the following:
Item
Service description
Maximum amount
(excl GST*)GST
Total
THA001
Hearing needs assessment - Audiologist
$175
THA002
Hearing needs assessment – Audiometrist
$153
THA003
Supply of hearing aid (including remote control)
Wholesale price of hearing aids to maximum of $1,400 per aid
THA004
Assistive listening device (including wireless devices)
Requests must be made within 12 months of the provision of hearing aids. Fitting of assistive listening devices is included in item THA006
Up to $350
THA005
Handling fee (monoaural or binaural hearing aid/s) payable upon supply of hearing aid
$250
THA006
Fitting of hearing device/s including:
· Initial Fitting, including the fitting of hearing aids and assistive listening devices
· All necessary hearing rehabilitation for the claimant within the first 12 months following supply and fitting
· Maintenance as per the manufacturer’s warranty
Paid only once per claimant in any five year period unless prior approval obtained from Telstra.
$650 (monoaural)
$1,100 (binaural)
THA007
Hearing aid repairs outside warranty
Payable only if a copy of manufacturer’s invoice for repairs is provided
$360
THA008
Hearing aid review/minor maintenance
Only applicable 12 months after supply
$125
THA009
12 months supply of hearing aid batteries and consumables including tips, domes, moulds, wax management systems etc.
$115 per aid
THA010
Replacement of receivers including refitting of receivers in any 12 month period
Only applicable 12 months after initial fitting
$115 per aid
*GST – Amounts published have not take into account that GST may apply to certain services. Where GST components apply, they are to be itemised separately on quotes and invoices.[29]
[29] T documents at T11 at 56
Telstra’s Hearing Device Policy gives me a little concern in two regards. The first is in so far as it requires an employee to submit quotations for Telstra’s written approval before devices are supplied and fitted. That would seem to be appropriate if the employee is asking Telstra to pay the provider directly in accordance with s 16(4)(c). It is clear from s 16(4)(a), however, that Telstra is obliged to pay compensation to the employee him or herself if the employee has already paid for medical treatment that is reasonable in the circumstances. The compensation is in the form of an amount it determines is appropriate to the medical treatment. It may be that the employee is taking a chance that Telstra will regard the fitting of devices as reasonable medical treatment and that it will regard the amount paid by the employee as an appropriate amount but an employee may choose to do that. An employee may well want to discuss reasonableness of the medical treatment and appropriateness of the amount quoted for them before the devices are supplied and fitted so that he or she can decide whether to make up any shortfall but there is no obligation to do so.
My second concern about the Hearing Device Policy arises from the fact that it seems to meld consideration of the medical treatment, being in the form of hearing devices, that it is reasonable for an employee to obtain in the circumstances with the amount that Telstra determines is appropriate to that medical treatment. It does that particularly in its fourth open dot point when it requires an explanation of exceptional circumstances if the quotation for the device requested is above the price approved in item THA 003. What the Hearing Device Policy appears to do is to make a rough initial assessment of what is reasonable medical treatment by reference to the cost of the device or devices. If the price is outside the fee set in THA 003 of the Schedule of Fees, it will look at the necessity for more expensive device or devices. That appears to put the cart before the horse for s 16(1) requires a determination first of the treatment that is reasonable for the employee to obtain. Once what is reasonable treatment has been determined, Telstra as the licensee is required to pay compensation appropriate to that medical treatment.
My concern may be more one of appearance than of practical reality and I do not need to explore it further for both Mr Amey and Telstra agree on the devices that he required. Furthermore, I do not understand Mr Amey to be concerned about the way in which the Hearing Aid Policy has identified the acquisition of the hearing aids as well as other services reasonably required in connection with that supply, replacement or repair in the Schedule of Fees. What he resists is any suggestion that he should separate the price for the acquisition and the services in the same way when he gives the invoice or quotation prepared by MAC to Telstra. Rather, Ms Bradey submits on Mr Amey’s behalf that MAC’s invoice with a single figure for the supply and other services reasonably required with its supply, fitting and review is sufficient for Telstra’s needs.
At the time Telstra made its decision, Ms Bronwyn Callander was the Assistant Claims Manager, Workers’ Compensation. She said that Telstra has no problem in approving the hearing aids recommended by MAC but it cannot do so on an unbundled quotation. In setting its Schedule of Fees by reference to individual prices and fees, Telstra has opted to allow the wholesale cost of the devices with an allowance for a management fee. That choice was made for the specific purpose of overcoming excessive mark ups on the actual cost of the devices. The fees are revised each year. Telstra operates nationally and cannot come to individual contractual arrangements with all providers. Its requirement that quotations are unbundled enables it to ensure that there is transparency in those quotations. In that way, Telstra can assess requests in a fair and timely manner and ensure that it does not discriminate among providers by paying one more than another for the same service.[30]
[30] Exhibit 3 at [4]
Amounts of compensation paid by Telstra, Commonwealth and two States
Ms Alison De Araugo is the Operations Manager, Injury Management & Claims within the Health, Safety & Environment Team at Telstra. She gave evidence as to the way in which Telstra had devised its policy. She annexed the Schedule of Fees to her first Statement dated 19 April 2017 and used that in a table comparing amounts payable under Victorian and New South Wales workers’ compensation schemes at that time. In her later statement made on 8 May 2017, Ms De Araugo attached schedules of fees that were operative in April 2016. I have taken her table and adjusted the fees to reflect the fees as at April 2016 I accept Ms De Araugo’s evidence that Comcare uses the AGHS Program’s Schedule of Fees in guiding its assessment of what amounts to appropriate compensation but I also note that the way in which it identifies services is different from the way in which Victoria and New South Wales do. There is closer parity between the identification of services between the two States and Telstra. I was given both the contracted and non-contracted fee for Victoria in Ms De Araugo’s first Statement but only the contracted fee was annexed to Ms De Araugo’s second Statement. I do not intend that to be a criticism at all because it reflects a fee higher than the non-contracted fees in the initial information.
Service description
Telstra
(excl GST)Victoria (excl GST)
(contracted)New South Wales
(excl GST)Hearing needs assessment - Audiologist
$175
$202.14
$197.20
Hearing needs assessment – Audiometrist
$153
$175.85
$162.50
Supply of hearing aid (including remote control)
Wholesale price of hearing aids to maximum of $1,400 per aid
Wholesale price of hearing aids to maximum of $2,500 per aid
Assistive listening device (including wireless devices)
Up to $350
Handling fee (monoaural or binaural hearing aid/s)
$250
$296.78
$290.00
Fitting of hearing device/s including hearing and maintenance
$650 (monoaural)
$1,100 (binaural)
$749.03 (monoaural)
$1,187.07 (binaural)
$696.90
(monoaural)$1,139.40
(binaural)Hearing device fitting package - monoaural
Hearing device fitting package - binaural
Maintenance fee – monoaural or binaural hearing aids (excl GST)
Management fee – assistive listening device (excl GST)
$95.01
Hearing review and/or hearing device maintenance – audiologist
$143.96/hr
Hearing review and/or hearing device maintenance – Audiometrist
$125.20/hr
Hearing device repairs
$360
$391.75
Up to $382.80
Hearing aid review/minor maintenance
$125
$139.30
12 months supply of hearing aid batteries and consumables
$115 per aid
$116.10 per hearing aid
Replacement of receivers including refitting of receivers in any 12 month period
$115 per aid
MAC’s care and pricing policies
Ms Mary Kalantzis is MAC’s General Manager. She is well qualified and very experienced in the hearing care industry as a clinician, sales and marketing manager, learning and development management, owner and operator of hearing retail businesses and consultant. Before being employed by MAC and acting as a consultant, Ms Kalantzis reviewed its pricing structure and strategy regularly to keep abreast of new hearing aid launches and changing market conditions. MAC, Ms Kalantzis said, prides itself on ensuring that clients’ needs always come first. Its staff are not paid commission on hearing aid sales and so have no incentive to sell more highly priced hearing aids or to replace hearing aids unless it is in a client’s interests to do so.
In her experience, she said, clinics have different pricing structures according to whether they can be positioned as premium service providers, as “lowest price guaranteed” providers or somewhere in between. Ms Kalantzis said that she is responsible for setting all of MAC’s prices for services and products based on its costs and market price comparisons. Account is also taken of the need to ensure that the business can meet its fixed overheads including staff wages, rent, utilities, equipment and so on and is profitable. The hearing care industry is very competitive but, on the whole, Ms Kalantzis is satisfied that MAC’s pricing is very competitive. The price quoted by MAC for Mr Amey’s AP hearing aids included the hearing aids, fitting and fine tuning of those aids to meet his needs, the rehabilitation plan, instructions for using and maintaining them and reviewing the fitting as he required during the first 12 months following the initial fitting. Although it was asked to do so by Telstra, MAC does not unbundle its prices because it is not industry practice to do so, Ms Kalantzis said.
MAC is a contracted provider for WorkSafe Victoria and the Commonwealth’s Occupational Health and Safety (OHS) scheme and has agreed to provide services and products to their clients are pre-negotiated prices. It has done so and accepts those prices because of the high number of clients who fall under the schemes. MAC is prepared to unbundle its prices for the OHS scheme as there is a Deed of Standing Offer between manufacturers and OHS for the provision of hearing aids at a negotiated and agreed price. If a client requires a more expensive hearing aid, MAC quotes an additional price on top of the amount paid by OHS. That amount is quoted to the client and provided to OHS as a bundled price.
WorkSafe Victoria have negotiated a Device Price List with hearing aid manufacturers for the provision of hearing aids below a certain price point. MAC is required to select hearing aids from that list and to invoice unbundled prices. Unbundling is necessary because of the contractual arrangement that WorkSafe Victoria has with manufacturers of hearing aids.
MAC has no contractual arrangement with Telstra to provide unbundled prices. The fact that it has contracts with OHS and WorkSafe Victoria is irrelevant to the issue of whether MAC should unbundle its prices for Telstra, Ms Kalantzis said. Without a contract, MAC is not required to charge discounted prices to clients covered by Telstra. Consequently, MAC charges clients, who are covered by Telstra, its standard hearing aid prices, which are market based. These prices are reasonable, Ms Kalantizis said.[31]
[31] Exhibit C
Mr Amey’s experience with MAC and his enquiries
Mr Amey said that he had undergone a free hearing test with Hearing Life before he went to MAC. He was given the results of his hearing test but he was not given a technical explanation. No explanation was given to him of the various hearing devices available on the market. All that he was told was that, if he were to return, the clinic he attended would fit him with hearing aids. That was a 40 minute free consultation. Apart from that one experience, he has only ever received treatment from MAC. In his statement, Mr Amey said:
“I understand that I may be able to go to another clinic to have my hearing aids fitted at Telstra prices. However, I am happy with the service that I receive at Melbourne Audiology Centre and I want to remain their client. I do not like being bullied into going to a different clinic especially when Melbourne Audiology Centre have informed me that their prices are reasonable.
I am loyal to people that provide me with good medical care, because it’s hard to find these days. I am the same with my GP and I consider my audiologist to be no different.”[32]
[32] Exhibit A at [23]-[25]
In giving oral evidence, Mr Amey said that he feels very comfortable and happy with MAC and the staff who attend him. Initially, he attended at MAC’s premises in Victoria Parade but he asked if there was somewhere close to home where he could attend. Mr Amey said that he has no difficulty in attending MAC’s premises in Dandenong. Mr Amey said that he may have told Ms Callander that he is happy to go somewhere closer to home but he is happy with MAC.
Mr Amey agreed with Mr Wallace that he had telephoned a number of other hearing centres and had obtained quotations for $3,500, $4,500 and $5,000. None of the centres he called was close to his home. When Mr Wallace of counsel suggested to him that there are five or six hearing centres in the area close to his home, Mr Amey replied that he had not known that. Everyone he spoke with mentioned that pensioners receive discounts. Some claimed that they could price match other quotations that he received but all quotations were similar. He had obtained these quotations because he sensed a conflict between Ms Callander and MAC. Ms Callander had told him that Telstra was prepared to pay $4,450.[33] He satisfied himself that Ms Callander was telling the truth when she had told him that he could get the AP hearing aids for the amount Telstra would pay. Mr Amey said that he gave these costings to his lawyer. He did not consider going to any of the hearing centres from whom he had obtained quotations because he was happy with MAC.
[33] I note that, in her statement dated 26 October 2017, Ms Callander said that the total cost to Telstra at that date would be $4,566. Telstra had no issue in approving the items Ms Kalatzis referred to but it needed to see the unbundled price.
What is an amount appropriate to Mr Amey’s medical treatment?
I have already found that AP hearing aids are reasonable medical treatment for Mr Amey to obtain. The only issue is the determination of the amount appropriate for him to obtain that treatment. Even on his own evidence of the calls he made, he obtained a quote of $3,500, which was less than the amount of $4,172.00 which Telstra was prepared to pay for the supply of AP hearing aids and the related services. The quotation he obtained was for an unbundled amount but that is not relevant in demonstrating that the medical treatment could be obtained for the amount determined by Telstra as appropriate. I do not have any evidence as to the locations of those providers but I accept Mr Amey’s evidence that they were not located close to his home. What is located close to his home is a hearing centre, the Audio Clinic at Mornington, that is prepared to provide AP hearing aids and the attendant services for the amount set out in Telstra’s Schedule of Fees.[34] I find that Mr Amey lives within a 20 minute drive of that hearing centre. MAC’s hearing centre at Dandenong is just over 20 minutes away but the two distances are comparable.
[34] Exhibit 5
Mr Amey wants to obtain his AP hearing aids from MAC and only from MAC because he trusts them and feels comfortable with them. That is entirely understandable given the relationship of trust that he feels he has with them. His previous experience with Hearing Life is not comparable. As he said, it was a free consultation offered by Hearing Life and his experience in that free consultation cannot be compared with the experience that he has with MAC and that which he could expect to have from Hearing Life or another hearing clinic if undergoing a full assessment and obtaining the full suite of services appropriate to the provision of AP hearing aids.
I accept that Mr Amey builds up relationships of trust with his health providers. Again, that is understandable and trust is important. That, however, does not mean that the assessment of the amount that is appropriate to the medical treatment is determined by reference to an individual employee’s sense of loyalty or by his or her relationship of trust. There may be particular circumstances and particular health needs that make it reasonable for an employee to obtain medical treatment from only provider. That may be a relevant factor in determining what it is that it is appropriate to pay and it may be payment by reference to a fixed schedule of fees may not be appropriate. Mr Amey’s circumstances and health needs are not, however, of that sort. There is nothing that takes them outside the normal range of circumstances and health needs that required medical treatment by the provision of AP hearing aids.
The Schedule of Fees by which Telstra assessed the amount appropriate to Mr Amey’s hearing aids leads to an amount that is, while at the lower end, within the range of quotations that Mr Amey obtained. It is close to the amounts payable by WorkCover Victoria and the New South Wales workers’ compensation schemes. Like them, Telstra has set fees by reference to the provision of hearing aids at the wholesale service and for each service. Insisting on unbundled quotations from hearing centre providers means, as Ms Callendar said, that Telstra can ensure that it is paying a wholesale price for hearing aids. If the quotations were bundled, the quotation could include a price that reflects a retail, rather than a wholesale, price. The difference between wholesale and retail price would vary from provider to provider. Unbundling the quotations also enables Telstra to assess the amount payable for those services specified in s 16(3). Apart from the professional fees of the Audiologist and other professionals, provision is also made for a Handling Fee.
The purpose of compensation payable under s 16 of the SRC Act is to ensure that an employee receives an amount that is appropriate to the medical treatment that it was reasonable for him or her to obtain. Provided medical treatment of that sort can be obtained at a location reasonably accessible to an employee for an amount assessed by Telstra, it is an amount appropriate to that medical treatment. Whether the employee wishes to obtain it elsewhere is entirely a matter for him or her but Telstra cannot be required to pay more than is appropriate. A provider may not wish to unbundle its quotation of its fees. That is entirely a matter for the provider but Telstra is not obliged to pay the quoted amount simply because the provider does not wish to unbundle its fees. A provider’s statement that its fees are reasonable does not determine what is appropriate.
In a case such as this, Telstra’s assessment of what amount was appropriate was properly made by reference to its Schedule of Fees. The medical treatment could be obtained for that amount from a location convenient to Mr Amey’s residence. There is nothing in Mr Amey’s circumstances that require consideration of any different amount. His preference to obtain the treatment from MAC is entirely a matter for him but Telstra should not be required to pay an amount greater than that for which the medical treatment can be obtained at a location that is reasonably accessible to him.
It is not clear to me whether Mr Amey has received his AP hearing aids or not. If he has, I find that the amount of compensation payable to him under s 16 of the SRC Act is $4,272.00. If he has not, I find that Mr Amey is entitled to compensation under s 16 in the amount determined under its Schedule of Fees current at the time the AP hearing aids are provided.
| I certify that the preceding fifty three [53] paragraphs are a true copy of the reasons for the decision herein of Deputy President S A Forgie. |
..............[sgd]....................................................
Associate
Dated: 21 June 2018
| Date of hearing: | 13 November 2017 |
| Counsel for the Applicant Solicitor for the Applicant: Counsel for the Respondent | Ms Kim Bradey Mr John Venizelakos Mr John Wallace |
| Solicitor for the Respondent: | Mr Damian Clarke Clarke Legal |
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