IAG Ltd t/as NRMA Insurance v Khaihra
[2021] NSWPICMR 44
•24 September 2021
| CERTIFICATE OF DETERMINATION OF MERIT REVIEWER | |
| CITATION: | IAG Ltd t/as NRMA Insurance v Khaihra [2021] NSWPICMR 44 |
| CLAIMANT: | Gurbachan Singh Khaihra |
| INSURER: | IAG Ltd t/as NRMA Insurance |
| MERIT REVIEWER: | Ray Plibersek |
| DATE OF DECISION: | 24 September 2021 |
CATCHWORDS: | MOTOR ACCIDENTS- Statutory benefits claim; claim for medical expenses; reasonable and necessary treatment costs; dispute over cost of MRI scan; AMA Fee Lists; State Insurance Regulatory Authority Workers Compensation (Medical Practitioner Fees) Order 2020; expenses for treatment and care; verification of expenses; maximum fees payable by insurers for treatment and care; payment by an insurer of statutory benefits for treatment and care; sections; 3.27, 3.30 and 8.9 of the Motor Accident Injuries Act 2017; clause 34 of the Motor Accident Injuries Regulation 2017; Held - the MRI provider has approval from the Insurer to claim the AMA Fee List amount to a maximum of $1,705 for fees payable for treatment and care. |
| DETERMINATIONS MADE: | 1. The Insurer is to pay the Claimant’s reasonable and necessary medical treatment costs at $1,705 for the MRI scan invoice dated 12 December 2019. 2. This determination takes effect on 24 September 2021. |
Background
The Claimant in this case, Mr Gurbachan Singh Khaihra, injured his right knee in a motor car accident. He had an MRI scan which cost him $1,705. The Insurer argued that the cost of the MRI was excessive and only offered to reimburse Mr Singh $700. Mr Singh’s lawyers argue that the MRI was necessary and the relevant AMA Fee List allows the provider to charge a maximum amount of $1,705. Mr Singh’s lawyers have made an application for the Insurer to repay the full amount for the MRI of $1,705. The dispute also concerns, whether for the purposes of section 8.9 of the Motor Accident Injuries Act 2017 (the MAI Act), the cost of an MRI incurred by the Claimant are reasonable and necessary.
On 7 July 2019 the Claimant was involved in a motor vehicle accident on Newbridge Road, Moorebank NSW.
On 7 November 2019 the Insurer received a request for a right knee MRI from MRI Now, (R 2).
By email dated 13 November 2019 the Insurer approved the imaging request for right knee MRI, (R 3).
In the approval, the Insurer stated that the approved costs for the MRI was at $700 for one region of the body. The Insurer stated that if contrast was required for the imaging, an additional $100 would be paid.
The terms of the approval included the following notation:
“For MRI:
- We approve the requested MRI at $700.00 for one
region of the body. If contrast is required for the
imaging, we will pay an additional $100.00.We approve the requested imaging at standard AMA rates.”
The approval noted that a review of the Claimant’s medical file has determined that the request is both reasonable and necessary. The approval for the imaging was expressed to be on a “Without Prejudice” basis.
An invoice from MRI Now dated 12 December 2019 stated that the total amount of the imaging was $1,705, under the OP200 code, (R 6).
On 24 December 2019, the Insurer paid $700 of the invoice, (R 6).
On 21 September 2020, the Claimant’s solicitors applied for an internal review on the basis that the MRI was approved by the Insurer and therefore full payment must be made for the total amount, (R 5).
The Insurer conducted the Internal Review on 14 October 2020 and decided to affirm the original decision. The Insurer determined that the invoice in relation to the MRI imaging request was approved by the Insurer on a without prejudice basis and any invoice following this request was reasonable and necessary at the Insurer’s approved rate of $700, and $100 additionally if contrast was used.
In the Internal Review, the Insurer’s reasons for its decision included references to section 3.27 of the MAI Act and clause 4.81.1 of the Motor Accident Guidelines (the Guidelines).
On 15 October 2020, the Claimant’s solicitors lodged an Application notifying a dispute.
The Claimant now seeks payment for the remaining amount for the MRI imaging in dispute referred to above.
The Insurer submits that the Application has been lodged as a Merit Review matter under Schedule 2, clause 1(i) of the MAI Act.
Submissions
In written submissions dated 15 October 2020, (A 1) the solicitors for the Claimant seek the payment of the Claimant’s reasonable and necessary medical expenses for the MRI imagining.
The solicitors for the Claimant refer to sub- sections 3.30 (2)(b) and 8.9 (1)(a) of the MAI Act. They also refer to clause 34 in the Motor Accident Injuries Regulation 2017 (the Regulation).
The solicitors for the Claimant then refer to the AMA Fee Lists in relation to MRI scans, (A2). This list states that Magnetic Resonance Study of one region of the body or two contiguous regions of the body is $1,705.
The Claimant written submissions conclude with a submission that the Insurer is in breach of its obligations under the objects of the MAI Act to assist injured claimants.
In written submissions in reply dated 9 November 2020, (R 1) the Insurer wrote that it approved the MRI request on a without prejudice basis on 13 November 2019. The MRI was approved at a rate of $700 for one region of the body and an additional $100 if contrast was required for the imaging.
The Insurer then submits that the costs requested for an MRI by MRI Now are not reasonable and necessary in the circumstances.
The Insurer then sets out how it interpreted and applied the legislation and Guidelines. I have summarised their argument as follows.
The Insurer submits that sub-section 3.27(1) of the MAI Act states that no statutory benefits are payable under Division 3.4 for expenses unless the expenses are properly verified in accordance with the Guidelines.
Clause 4.86.1 of the Guidelines states that a Claimant has an obligation under the
MAI Act to minimise loss and participate in reasonable and necessary treatment and care and rehabilitation.
The Insurer submits that in accordance with clause 4.101.2 of the Guidelines, the Insurer has stated the cost that it agreed to meet when the request for the MRI was received.
The Insurer submits MRI Now and the Claimant were advised in writing in accordance with clause 4.101.1 of the Guidelines that the Insurer was prepared to pay $700 for the MRI and an additional $100 for the contrast prior to undergoing the imaging, (R 3).
The Insurer then refers to sub- section 8.9(2) of the MAI Act and submits that it has adopted the SIRA Workers Compensation (Medical Practioner Fees) Order 2020 and gave the approval for the MRI in accordance with the schedule of fees, (R 7).
The Insurer submits that the fees claimed by the Claimant as set out in the AMA list are the maximum amount that is payable and allowed by the Act and Regulations. But this list does not bind the Insurer to pay the maximum amount.
The Insurer then refers to four websites which give guidance as to the cost of an MRI which starts from $170 to $403.20 for Medicare for an MRI of knee in patients over 16 years old.
The Insurer submits that treatment requests received are reviewed on a case to case basis in accordance with reasonable and necessary guidelines. The Insurer makes the decisions in accordance with the Act and Guidelines. It was not reasonable and necessary for the Claimant to undergo imaging at a rate over the approval provided by the Insurer.
Relevant Statutory Provisions
Both parties in this dispute are well aware of the statutory provisions relevant to this dispute as they have referred to those provisions in their submissions. Accordingly,
I will only refer to them briefly.
The objects of the MAI Act include, at s 1.3(2)(g), ‘to encourage the early resolution of motor accident claims and the quick, cost effective and just resolution of disputes’. In the interpretation of a provision of the MAI Act or the Regulations, a construction that would promote the objects of the MAI Act or the provision is to be preferred to a construction that would not promote those objects (s 1.3(4)). In the exercise of a discretion conferred by a provision of the MAI Act or the Regulations, the person exercising the discretion must do so in the way that would best promote the objects of the MAI Act or of the provision concerned (s 1.3(5)).
Sub-section 3.27 provide as follows:
“3.27 Verification of expenses
(1) No statutory benefits are payable under this Division for expenses unless the expenses are properly verified in accordance with the Motor Accident Guidelines.
(2) The Motor Accident Guidelines may make provision for how expenses for treatment and care are to be verified including verification that—
(a)the expenses have been incurred, and
(b)the treatment and care has been provided, and
(c)the treatment and care relates to the injury in respect of which statutory benefits are payable.”
Sub-section 3.30 provide as follows:
“3.30 Payment of hospital, ambulance, medical and other expenses not covered by bulk billing arrangement
(1)This section applies to—
(a)payment for the treatment and care of injured persons at hospitals, and
(b)payment for conveying injured persons by ambulance, and
(c)payment for any medical or dental treatment of, or rehabilitation services provided to, injured persons,
in any case where payment for the expenses concerned has not been made, and is not required to be made in accordance with a bulk billing arrangement under Division 10.3.
(2)If an insurer is required to make that payment in accordance with this Division, the rate at which the payment is to be made is as follows—
(a)in the case of treatment and care at public hospitals—at the rate determined by the Minister for Health by order published in the Gazette,
(b)in any case in which a maximum rate is fixed under Part 8 and paragraph (a) does not apply—at the maximum rate so fixed,
(c)in any case in which the rate is fixed by the Motor Accident Guidelines made under section 3.31 and paragraphs (a) and (b) do not apply—at the rate so fixed,
(d)in a case to which a rate referred to in paragraph (a), (b) or (c) does not apply—at the rate reasonably appropriate to the treatment and care.
Note—
Section 3.24 limits payment to the cost of treatment and care to the extent that it was reasonable and necessary in the circumstances.”Sub-section 8.9 then provides in part that:
“8.9 Maximum fees payable by insurers for treatment and care not provided at hospitals or provided at private hospitals. (cf s 56 MACA)
(1)The regulations may make provision for or with respect to fixing the maximum amount for which an insurer is liable in respect of any claim for—
(a)the fee payable for any treatment and care of an injured person to the provider of that treatment and care (other than treatment and care that is provided to in-patients or out-patients at a hospital and for which any payment is required to be made to the hospital and not to the provider of that treatment and care), or
(b)the fee payable for any treatment and care of an injured person to a private hospital for treatment and care at the private hospital.
(2)Any such fees may (but need not) be fixed by reference to fees recommended by the Australian Medical Association or other professional association or by reference to any schedule of fees.
(3)A payment by an insurer of statutory benefits for treatment and care, or assessed by the Commission, is to be made consistently with any regulations under this section.
(4)This section does not prevent the inclusion in Motor Accident Guidelines of provision as to the appropriate allowance for fees to which this section applies and which are not fixed by regulations under this section.”
Clause 34 of the Regulation provides as follows:
“34 Maximum amounts payable by insurer for treatment and care not provided at hospitals or provided at private hospitals (section 8.9)
(1)The maximum amount for which an insurer is liable in respect of any claim for fees payable for treatment and care to which section 8.9 of the Act applies is the amount listed, in respect of the treatment concerned, in the AMA List.
Note—
Section 8.9 of the Act does not apply to treatment and care that is provided at a hospital (whether to an in-patient or an out-patient) and for which any payment is required to be made to the hospital and not to the provider of the treatment. The section does apply to the fee payable to a private hospital for any treatment and care at the hospital.(2)This clause applies only in relation to treatment and care—
(a)that is provided to an injured person by a health practitioner, and
(b)in respect of which a fee is specified in the AMA List.
(3)In this clause—
AMA List means the document called List of Medical Services and Fees published by the Australian Medical Association and dated 1 November 2017 as amended or replaced, from time to time, by a document that—
(a)has been published by the Australian Medical Association, as an amendment to, or replacement of, the AMA List, and
(b)has been recognised by the Authority, by notice published in the Gazette.”
Determination
The Insurer’s submissions contain three difficulties: its interpretation of the legislation, its application of the Guidelines and the ambiguous terms under which it gave approval to the MRI service provider.
First, regarding the Insurers submissions on the legislation. The Insurer sets out in some detail the provisions it relies on in sub-sections 3.27(1),8.9 (2) of the MAI Act and clauses 4.86.1 and 4.101 in the Guidelines. In its written submissions the Insurer states that it makes its decisions in accordance with the Act and Guidelines, (R 1, para 24).
The difficulty with the Insurer’s reasoning in its submissions is that it does not disclose whether or not it took into account the Regulations. Nor do the Insurer’s submissions address how the Regulations may apply to affect the payment of the MRI invoice.
In its submissions the Insurer refers in detail to what it submits are the relevant considerations in the MAI Act and Guidelines but not the Regulations.
The Claimant in its submissions does refer to the Regulations and how these may affect the payment of the disputed invoice. In particular the Claimant refers to clause 34. This clause in effect provides that the maximum amount for which an insurer is liable for any claim for fees payable for treatment and care, to which section 8.9 of the Act applies, is the amount listed in the AMA List. The Claimant then points to the relevant AMA Fee List, (A 2), which lists the maximum amount as $1,705.
Accordingly, the first difficulty with the Insurer’s submissions is that it does not sufficiently explain why clause 34 of the Regulation does not apply in this case. Nor does it address (other than cost savings) why the SIRA Workers Compensation (Medical Practioner Fees) Order 2020 should be applied or preferred over the AMA Fee list amount.
Second, in its submissions the Insurer relies on sub-section 3.27(1) of the MAI Act to argue that the expenses have to be properly verified in accordance with the Guidelines. The Insurer then refers to the Guidelines as a basis to argue that clause 4.86.1 in the Guidelines require that the parties must minimise costs. However, the Insurer does not refer to sub-section 3.27(2) of the MAI Act which sets out what is to be verified. The verification contemplated by sub-section 3.27(2) is that the expenses have been incurred; the treatment and care has been provided, and the treatment and care relates to the injury in respect of which statutory benefits are payable.
Contrary to the Insurer’s submission, sub-section 3.27(1) and (2) of the MAI Act do not operate to require verification by the Guidelines of the amount of the expenses.
Third, when the entire terms of the Insurer’s approval is read it is ambiguous. The approval states that the Insurer approved the requested MRI at $700 for one
region of the body. However the approval also stated that the Insurer approved
” …the requested imaging at standard AMA rates.”Thus, on a fair reading of the Insurer’s approval, it is open to the MRI provider to charge either $700 for one region of the body or the standard AMA rate.
In its submissions the Insurer makes the point that it does not have to pay the maximum price and that the MRI was not reasonable and necessary at that price over and above the amount approved by the Insurer. The Insurer had also submitted that the amount requested by MRI Now does not align with the objects of the Act in keeping it affordable. Even if these submissions are correct, they are not an argument that would prevent the provider claiming the AMA rate which is allowed for in the Insurer’s approval email dated 13 November 2019.
Having considered both sets of submissions from the Claimant and Insurer I find the argument put by the Claimant to be more persuasive. Under sub-section 3.30 (2) (b), if an insurer is required to make a payment under Division 3.4 and the maximum rate is fixed under Part 8 then payment is at the maximum rate so fixed. Under sub-section 3.30 (2) (c), if the rate is fixed by the Guidelines under section 3.31 and paragraphs (a) and (b) do not apply—at the rate so fixed. In the present dispute, since the Insurer is required to make the payment under Division 3.4 then section 8.9 applies which provides that the Regulations may fix the maximum amount for which an insurer is liable. Clause 34 of the Regulation then fixes the maximum amount for which an insurer is liable as the AMA List price. Because sub-section 3.30 (2) (c) does not apply, the amount fixed by the Guidelines do not apply in this case.
The Insurer has accepted that the MRI was reasonable and necessary. The relevant AMA List price is $1,705. As the Insurer’s approval included “the standard AMA rates”
I also find that this rate included the AMA List price of $1,705.
Conclusion
Accordingly, having reviewed all the submissions, legislation and evidence I find that the Claimant and MRI provider has approval from the Insurer to claim the AMA Fee List amount to a maximum of $1,705. I also find that in accordance with its approval, the Insurer is liable to pay the claimed total amount of $1,705 for fees payable for treatment and care.
Ray Plibersek
General Member and Merit Reviewer
Personal Injury Commission
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