Goodyer and Health Insurance Commission
[2002] AATA 353
•16 May 2002
DECISION AND REASONS FOR DECISION [2002] AATA 353
ADMINISTRATIVE APPEALS TRIBUNAL )
) No N2002/72
GENERAL ADMINISTRATIVE DIVISION )
Re BEULAH ISABEL GOODYER
Applicant
And HEALTH INSURANCE COMMISSION
Respondent
DECISION
Tribunal Mr M D Allen, Senior Member
Date16 May 2002
PlaceSydney
Decision The decision under review is set aside and this matter remitted to the Respondent with the direction that the Applicant has not made a statutory declaration pursuant to s18 of the Health and Other Services (Compensation) Act 1995 as amended that was not substantially correct.
(Sgd) M D Allen
..............................................
Senior Member
CATCHWORDS
HEALTH - Medicare. Refund of medicare payments when compensation for injuries received. Tortious act was failure to diagnose. No element of settlement monies related to medical expenses which would have been incurred in any event. Medicare benefits not made as a result of that injury.
Health and Other Services (Compensation) Act 1995 s3, 4, 8
Health and Other Services (Compensation) Legislation Amendment Act 2001
Technical Products Pty Ltd v State Government Insurance Office (QLD) 167 CLR 45
Workers' Compensation Board of Queensland v Technical Products Pty Ltd 165 CLR 642
Repatriation Commission v Veterans Association of Australia NSW Branch Inc 48 SWLR 548
REASONS FOR DECISION
Mr M D Allen, Senior Member
By Application made the 31st day of August 2001 the Applicant sought review of a decision made by the Respondent that a statement made pursuant to s18 of the Health and Other Services (Compensation) Act 1995 ("the Act") was not substantially correct.
The decision was made pursuant to s33E of the Act as that section existed as at 16 July 2001. Section 33E was renumbered as s23B by the Health and OtherServices (Compensation) Legislation Amendment Act 2001 which received Royal Assent on 1 October 2001 however nothing turns on this point.
Section 33E (now 23B) read:
"S33E Notice of statement that is not substantially correct.
(1) This section applies only if an advance payment is made.
(2) If the Managing Director is satisfied that a statement given to the Commission under section 18 or this section is not substantially correct, the Managing Director must give to the compensable person a written notice:(a) specifying that the statement is not substantially correct; and
(b) requiring the claimant to give an amended statement that is substantially correct; and
(c) stating the period within which the claimant is required to give the amended statement to the Commission.(3) The notice must be given before the last day on which the Managing Director could give to the compensable person the notice under section 33C.
(4) The claimant must give to the Commission the statement required by the notice within the period of 28 days after being given the notice.
(5) In deciding whether a statement is substantially correct, the Managing Director may have regard to:(a) the date on which the compensable person suffered the injury; and
(b) the nature of the injury that the compensable person suffered; and
(c) the treatment of the injury; and
(d) statistical information about claims for eligible benefits in relation to injuries of substantially the same kind as the injury in respect of which the claim was made; and
(e) expert medical opinion about the treatment that is usual or may reasonably be expected in relation to injuries of that kind; and
(f) any other matter that the Managing Director considers relevant.(6) A reference in subsection (5) to the treatment of the injury includes the reference to the provision of nursing home care or residential care as a result of the injury.
(7) Sections 18 and 19 apply to an amended statement under this section as if it were a statement under section 18."The underlying facts giving rise to the dispute between the parties are not in dispute. The matter is really one of statutory interpretation although the Respondent would also deny certain inferences, which the Applicant seeks to raise from the facts. What is not in dispute however is the following:
(I) On 18 January 1998 the Applicant underwent a bilateral mammography which investigation was reported upon by a Dr Jeffrey Kuan.
(II) Because of self-examination by the Applicant she underwent a second mammography on 7 December 1998.
(III) The result of the second mammography was that a malignancy was detected in the Applicant's right breast.
(IV) That malignancy was confirmed as a T2NOMO grade 2 carcinoma and on 31 December 1998 the Applicant underwent surgery to excise the said malignancy.
(V) Advice to the Applicant was that the said malignancy should have been readily discoverable at mammography on 18 January 1998.
(VI) On 18 November 1999 the Applicant issued proceedings out of the District Court of NSW in Sydney claiming damages against Dr Kuan for failure to diagnose her breast cancer in January 1998.
(VII) Proceedings against Dr Kuan were settled for the sum of $150,000.00.As pointed out in the Respondent's written submission the Act is designed to recover medicare benefits paid to persons for services rendered in respect of the persons' compensable injury prior to the award of compensation. As was stated by the then Minister for Family Services in her second reading speech to the Health and Other Services (Compensation) Bill 1994:
"Under current legislation, people who received compensation for an injury should reimburse the Commonwealth for medicare and nursing home benefits which they have received in respect of that injury.
However the review of the relationship between Compensation and Health and Community Services Programs found that many people receiving compensation designed to make a full cost of injury-related medical and other care needs do not reimburse the Commonwealth. They 'double dip' by receiving free or heavily subsidised services funded by the Commonwealth as well as compensation for the full costs of these services.
Double dipping can never be acceptable because it means that the community pays twice for a service - once for insurance and again through Commonwealth funding.
The current policy to prevent double dipping…"
A more succinct statement of the purposes the Bill was given by the Parliamentary Secretary to the Minister for Communications, Information Technology and the Arts in introducing the Health and Other Services (Compensation) Legislation Amendment Bill 2001 where he stated:
"The Bill proposes to amend the Health and Other Services (Compensation) Care Charges Acts 1995. The Acts were past to insure that, when plaintiffs go to Court to recover damages for personal injuries, they would repay to the Commonwealth the cost of any medicare and residential care benefits received because of the injury."
The relevant parts of the Act are Section 3(1), which is the definitions section. It states inter alia:
""amount of compensation", in relation to a judgment or settlement, is defined in subsection (2);
"claimant", in relation to compensation, means the person seeking compensation either on his or her own behalf or on behalf of another person;
"compensable person" means:(a) an individual who is entitled to receive or has received a compensation payment in respect of an injury; or
(b) if the individual has died-the individual's estate;
"compensation" is defined in section 4;"eligible benefit" means:
(a) a medicare benefit…
"injury" includes a disease;
"judgment" means an order (by whatever name called) by a court or a compensation authority under which an amount of compensation payable is fixed, but does not include a reimbursement arrangement, a consent judgment or an order in the nature of a consent judgment;
"professional service" has the same meaning as in The Health Insurance Act 1973;
"receive" in relation to a compensation payment is defined in subsection (3);
"reimbursement arrangement" means an agreement in writing, an order of a court or compensation authority, or a decision of a person or body, to the effect that the person against whom a claim for compensation is made is liable to pay compensation to reimburse the claimant for expenses as they are incurred by the claimant that:(a) are incurred in respect of any service or care rendered or provided in the course of treatment of, or as a result of, the claimants injury; and
(b) are expenses in respect of which an eligible benefit is or may become payable."settlement" means an agreement under which an amount of compensation that a party to the agreement agrees to pay to another person is fixed, and includes:-
(a)…
(b) a consent judgement or an order in the nature of a consent judgement, of a court or compensation authority under which an amount of compensation payable to a person is fixed."
Subsection 3(4) then reads:
"A reference in this Act to an amount of compensation being fixed under an order or agreement is a reference to the amount being:
(a) specified in the order or agreement, or in the law under which the order or agreement is made or to which the order or agreement relates; or
(b)…"
Section 4 of the Act reads:
"Definition of compensation
4. (1) Subject to subsection (2), for the purposes of this Act, compensation is:(a) a payment of damages; or
(b)…
(c) a payment (with or without admission of liability) in settlement of a claim for damages or a claim under an insurance scheme of a kind to which paragraph (b) applies; or
(d) any other compensation or damages payment, other than a payment under a scheme to which the recipient has contributed;
that is made in respect of an injury to a person (whether or not the payment is made to that person)."
Section 8 then reads:
"Recovering past payments of medicare benefit from judgments and
settlements
8. (1) Subject to subsections (2), (3), (6) and (9), if:(a) a judgment or settlement is made in respect of an injury to a compensable person; and
(b) medicare benefit has already been paid in respect of a professional service rendered to that person in the course of treatment of, or as a result of, the injury; and
(c) a liability has not already arisen under section 7 in respect of that payment of medicare benefit;
there is payable to the Commonwealth an amount equal to the medicare benefit.
(2)…
(3) If:(a) the amount of compensation is fixed by a judgment that specifies an amount (the "past medical care component"), being a portion of the amount of compensation, to be a component for the medical expenses already incurred relating to the injury; and
(b) the amount that, apart from this subsection, would be payable to the Commonwealth under this section exceeds the past medical care component;
the amount payable under subsection (1) is taken to be the past medical care component."
The Respondent maintains that ss8(1) is unambiguous in its terms and that the applicant must reimburse expenses claimed on medicare for the treatment of her breast cancer. For her part the applicant claims that the award of damages was for the failure to diagnose the malignancy and no part of the award was for past or future medical expenses.
The Applicant's position is set out in the letter from her solicitor to the Respondent dated 13 December 2000 (T5) which reads:
"All medical experts were in agreement that the delay caused no difference in the treatment Mrs Goodyer would have had to undergo. Consequently, the matter was settled with no allowance being made for out of pocket expenses as all medical treatment would have been necessary, even if the breast cancer had been diagnosed 12 months earlier."
And the position is also reiterated in a further solicitor's letter dated 17 January 2001 (T11):
"1. As you will note, the Statement of Claim claims no specific past out of pocket expenses.
2. As noted by you, the Health Insurance Commission is entitled to recover those medical services that relate to the compensable injury. The compensable injury in this case is the delay in diagnosis, not the breast cancer per say. Mrs Goodyer's past medical expenses bear no relationship whatsoever to the delay in diagnosis, as evidenced by the medical reports previously provided."
The Applicant's Statement of Claim in the District Court gave as the particulars of negligence
(a) failing to diagnose the breast carcinoma
(b) failing to detect any lump in the plaintiff's right breast
(c) failing to detect any signs suggestive of a carcinoma in the plaintiff's right breast
(d) reporting the mammography as showing no evidence of malignancy when he knew or ought to have known that evidence of malignancy was in fact present.
(e) failing to recommend further investigation of the plaintiff's breast
(f) failing to recommend repeat mammography to confirm the absence of malignancies.
Obviously some of the paragraphs set out above reflect the pleaders abundant caution but it is clear that the real complaint of the applicant was as per paragraphs (a) and (b) above.
At the time of settlement a claims registration pursuant to Section 11 of the Act was lodged with the Respondent by the Applicant's solicitor. It stated as the injury suffered:
"Stage T1NOMO grade 2 carcinoma of the right breast, lumpectomy auxiliary mode dissection."
This must be qualified by the notice of settlement sent together with a payment of $15,000.00 representing 10 percent of the settlement amount to the Respondent by the Defendant's insurer. That notice at T8 is signed by the solicitor for the Defendant's insurer and reads:
"Nature of injury suffered (please provide a brief description) DELAYED DIAGNOSIS OF BREAST CANCER."
And answers questions under the heading Specific Award Details as follows:
Q10 Past Medical (Amount agreed in Settlement)
Answer, $NIL allowed in settlement.
Q12 Were future Medical Costs allocated?
Answer, no.
It seems clear from the above documentation that the settlement proceeded on the basis that whereas there was a negligent failure to diagnose that failure did not, of itself, lead to the incurring of any medical expenses over and above what the Applicant would have occurred in any event following the belated discovery of the malignancy.
Obviously if the malignancy remained undiscovered between January and December 1998 then no medical expenses were incurred in relation to it during that period. Medical opinions obtained by both he Applicant's solicitors and the Defendant's solicitors stated that no addition medical expenses were incurred due to the late discovery of the malignancy.
Associate Professor Levi oncologist in a report dated 4 November 1999 to the Applicant's solicitors (T21) opined inter alia:
"… It is reasonable to indicate that if the diagnosis of Mrs Goodyer's carcinoma had been made in January 1998 it would have also been of high grade as it was in December 1998."
And continues at paragraph 7 of the report:
"In reference to relevant treatment to be undertaken if the carcinoma had been diagnosed on 19/1/98, rather than December I make the following comment. If it is assumed that the stage of the malignancy if diagnosis was made in January 1998 would have been T1NOMO with a high grade malignancy oestrogen and progesterone receptor negative, then optimum treatment would have remained lumpectomy, right auxiliary lymph mode dissection, radiotherapy and chemotherapy, as was undertaken after diagnosis in December 1998. The principle determinants of this treatment would have been related to the high grade of the malignancy and the oestrogen and progesterone receptor negativity… The treatment duration and potential adverse effects associated with the treatment would have remained the same if diagnosis had been made in January 1998 compared to December 1998."
Professor Langlands' oncologist in a report to the Defendant's solicitors dated 27 April 2000 (T21) after reading reports by Professor Levi and Professor Tattersall opined:
"In that case treatment by surgery radiation and chemotherapy would have been no different. Thus she would not have avoided any treatment related toxicity such as the deep vein thrombosis or radiation pneumonitis, had the diagnosis been made earlier.
In listing treatment under Particulars of Injury 1b – 1e there is an implication that these are some consequences of delay. This is manifestly not the case if it is accepted that the abnormality present in January 1998 was the cancer eventually treated in December 1998.
As treatment would not have been influenced by the time of diagnosis, costs for treatment and follow-up would be no different."The Respondent submitted that as the Applicant had received a settlement for an injury (which term includes a disease) namely breast cancer then there was refundable by the Applicant a sum representing the medicare benefits paid to her for the costs of treatment for her breast cancer.
In support of its submission the Respondent referred to the phrase "in respect of" that occurs in paragraph (a) and (b) of ss8(1) of the Act. It relied upon the decision of the High Court in Technical Products Pty Ltd v The State Government Insurance Office (QLD) 167 CLR 45 at 47 where Brennan Deane and Gaudron JJ said "the words 'in respect of' have a very wide meaning. Indeed, they have a chameleon-like quality in that they commonly reflect the context in which they appear…"
However the majority went on to say at p47 "That nexus will not, however, exist unless there be some discernible and rational link between the basis of legal liability and the particular motor vehicle" adding at page 48 after an illustration of how the phrase operated in the particular statutory context before them "… the further requirement that the circumstances giving rise to the relevant legal liability … show a discernible and rational link between the liability and the particular vehicle." Cf Dawson J at p51 "the words 'in respect of' require some material connection between the two matters referred to."
In the earlier but connected case of Workers Compensation Board of QLD v Technical Products Pty Ltd 165 CLR 642 at p 647 Wilson and Gaudron JJ referred to Mason J (as he then was) in State Government Insurance Office (Q) v Rees 144 CLR 549 at 561 "But, as with other words and expressions, the meaning to be ascribed to 'in respect of' depends very much on the context in which it is found." Cf Deane Dawson and Toohey JJ at p 653, 654 "Undoubtably the words 'in respect of' have a wide meaning… The phrase gathers meaning from the context in which it appears and it is that context which will determine the matters to which it extends".
The context in which the words are used is ss8(1) of the Act are in the context of repaying to the Commonwealth monies paid out by the Commonwealth in refunding the cost of medical treatment which costs are later recovered from a defendant in legal proceedings (either a tortfeasor or an employer).
In seeking to ascertain the injury in respect of which the professional services incurring the medical benefits were paid regard must be had to the context in which the phrase occurs – see Repatriation Commission v Vietnam Veterans Association of Australia NSW Branch Inc and Ors [2000] 48 NSWLR 548 at 575-6.
The Act requires that the injury for which compensation and medical treatment was obtained be identified. As pointed out in the 2nd reading speech to the Act the purpose of the legislation is to ensure that the costs of medicare benefits be repaid to the Commonwealth where compensation was received to meet the costs of injury related medical needs.
In normal cases the injury (which term includes disease) caused by a tortious act will be readily identifiable eg injuries occurred in a motor vehicle accident. In other cases a disease may be said to have been caused eg negligent exposure to chemicals may cause emphysema or a particular form of cancer. These are the situations which the Act is intended to cover that is to say a tortious act which causes or contributes to an injury and the consequent payment of damages in compensation therefore which damages and payment includes a sum or sums to cover past and future medical treatments.
In this matter the medical needs of the Applicant were not incurred because of any disease (injury) for which compensation was obtained. The fact of the presence of a disease was an element of her case in negligence against the defendant medical practitioner but the compensation monies (that is to say the settlement of her claim) were paid because of the failure to diagnose. No medical expenses were incurred because of or as a result of the tortious act resulting in the receipt of damages. This much is made clear by the expert medical opinions, which can be taken into account pursuant to paragraph 23B(5)(e) of the Act. To use the words of Dawson J in Technical Products Pty Ltd v SGIO (QLD) supra there was no material connection between the settlement monies and the medical expenses incurred once the disease was discovered.
As I am satisfied that the settlement in this matter was not made in respect of the Applicant's injury (ie the disease of breast cancer) then ss8(1) has no application to her and the decision under review must be set aside.
The matter will be remitted to the Respondent with the direction that the Applicant has not made a statutory declaration pursuant to s18 of the Act that was not substantially correct.
I certify that the 25 preceding paragraphs are a true copy of the reasons for the decision herein of:
Senior Member M D Allen
Signed: .....................................................................................
Associate: Nathaniel WillsDate of Hearing 24 April 2002
Date of Decision 16 May 2002
Solicitor for the Applicant Applicant was self-represented
Counsel for the Respondent Mr M Robinson
Solicitor for the Respondent Health Insurance Commission
0
0
0