Vlad v Insurance Australia Limited t/as NRMA Insurance
[2023] NSWPICMR 15
•10 March 2023
| CERTIFICATE OF DETERMINATION OF MERIT REVIEWER | |
| Citation: | Vlad v Insurance Australia Limited t/as NRMA Insurance [2023] NSWPICMR 15 |
| ClaimanT: | Vasilica Vlad |
| Insurer: | Insurance Australia Limited t/as NRMA Insurance |
| Merit Reviewer: | Katherine Ruschen |
| DATE OF DECISION: | 10 March 2023 |
CATCHWORDS: | MOTOR ACCIDENTS - Motor Accident Injuries Act 2017; merit review; dispute about statutory benefits under Division 3.4; costs of treatment and care, section 3.24; private hospital fees, sections 3.30 and 3.31; prescribed maximum payable for treatment at private hospital, section 8.9 and clause 34 of the Motor Accident Injuries Regulation; List of Medical Services and Fees published by the Australian Medical Association, the AMA list; clause 4.94 of the Motor Accident Guidelines; Held – the reviewable decision is affirmed. |
| Determinations made: | CERTIFICATE OF DETERMINATION Issued under s 7.13(4) of the Motor Accident Injuries Act2017 Determination The reviewable decision is about the amount of statutory benefits that are payable under Division 3.4 of the Motor Accident Injuries Act 2017 (the MAI Act) and is therefore a merit review matter under Schedule 2(1)(i) of the MAI Act. 1. The reviewable decision is affirmed. |
STATEMENT OF REASONS
INTRODUCTION
A dispute has arisen between Vasilica Vlad (the claimant) and the insurer about the cost of treatment and care payable under Division 3.4 of the Motor Accident Injuries Act 2017 (the MAI Act).
The claimant was involved in a motor accident on 29 July 2022.
The claimant made a claim for statutory benefits under the MAI Act.
On 19 October 2022 the insurer determined that the costs of certain treatment recommended by the claimant’s treating doctor, Dr Dona are capped at the amount prescribed by the List of Medical Services and Fees published by the Australian Medical Association (the AMA list).
The claimant requested an internal review of the insurer’s decision of 19 October 2022.
On 31 October 2022 the insurer issued their internal review in which the insurer affirmed their original decision that the cost of the subject treatment is capped at the amount prescribed in the AMA list.
The claimant has requested a merit review of the insurer’s internal review decision dated 31 October 2022.
SUBMISSIONS
The claimant contends that the subject surgery cannot be carried out at a cost at or under the amount prescribed in the AMA list and the insurer therefore ought to pay the commercial cost. The claimant relies on a quotation from Dr Eddy Dona in the sum of $15,000 inclusive of GST, anaesthetist, and hospital fees.
The insurer contends the subject surgery is treatment at a private hospital for treatment that is a specified item in the AMA list. In so far as this is a claim for statutory benefits the insurer submits, they are not obliged under the MAI Act to pay the claimant more than the prescribed amount for the surgery, regardless of actual costs that might be incurred by the claimant.
REASONS
Background
On 19 September 2022 Dr Dona opined the claimant suffered capsular contracture as a result of significant trauma to the chest and breast sustained in the motor accident. Given the claimant’s physical and aesthetic concerns Dr Dona recommended surgery in the form of bilateral capsulectomy and exchange of implants. Dr Dona estimated $15,000 inclusive of GST, anaesthetist, and hospital fees.
It is proposed that the surgery be carried out as day surgery at a private hospital.
The insurer requested that Dr Dona identify the relevant item in the AMA list applicable to the proposed surgical procedure. In response, Dr Dona stated AMA item 45554 is likely the applicable item. However, Dr Dona has refused to cap the costs at the amount prescribed for this item in the AMA list.
The insurer has partially approved the costs of surgery by approving the amount prescribed in the AMA list for AMA item 45554. The insurer has treated the procedure to each breast as a separate surgical procedure and accordingly, has approved payment of the prescribed fee twice that is, one prescribed fee of $2,270 (the current AMA listed fee) for each breast, which totals $4,540.
Legislation
Under s 3.24 of the MAI Act an injured person is entitled to statutory benefits for the costs of treatment and care incurred in connection with providing treatment and care for the injured person as a result of the motor accident.
There is no dispute that the surgery recommended by Dr Dona is treatment covered by s 3.24. The dispute is regarding the amount payable for the recommended surgery.
Section 3.24 relevantly provides that the claimant is entitled to payment of “the reasonable cost of treatment and care”.
The proposed treatment in issue is treatment in the form of surgery to be carried out at a private hospital. Accordingly, s 3.30 of the MAI Act also applies. Among other things, s 3.30 applies to “payment for the treatment and care of injured persons at hospitals”. In relation to treatment provided at a private hospital, as is the case here, s 3.30 provides the rate at which payment is “in any case in which a maximum rate is fixed under Part 8 … at a rate no greater than the maximum rate so fixed”.
Accordingly, it is necessary to go to Part 8 of the MAI Act and specifically, s 8.9 in Part 8 which relevantly provides the following regarding maximum fees payable by insurers:
“(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) …
(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.”Clause 34 of the Motor Accident Injuries Regulation 2017 (the Regulation) prescribes the maximum amounts payable by an insurer under s 8.9 of the MAI Act for treatment and care provided at private hospitals as follows:
“(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.”
Accordingly:
(a) pursuant to s 3.24 of the MAI Act the insurer is required to pay reasonable costs of treatment;
(b) as the treatment is at a private hospital, under s 3.30 of the MAI Act the maximum amount payable is the amount fixed under s 8.9 of the MAI Act;
(c) under s 8.9 of the MAI Act the Regulation may provide the maximum payable for treatment at a private hospital and may fix the maximum payable by reference to fees recommended by the AMA or in any schedule of fees, and
(d) clause 34 of the Regulation prescribes the maximum payable by the insurer for treatment at private hospitals for the purpose of s 8.9 of the MAI Act is the amount listed, in respect of the treatment concerned, in the AMA list.
Dr Dona agreed with the insurer’s identification of item 45554 in the AMA list as the applicable item. The description for item 45554 in the AMA list is as follows:
“BREAST PROTHESIS, removal and replacement with another prosthesis, following medical complications (for rupture, migration of prosthetic material, or symptomatic capsular contracture), including excision of at least half of the fibrous capsule or formation of a new pocket, or both, if: (a) either: (i) it is demonstrated by intra-operative photographs post-removal that removal alone would cause unacceptable deformity; or (ii) the original implant was inserted in the context of breast cancer or developmental abnormality; and (b) the excised specimen is sent for histopathology and the volume removed is documented in the histopathology report; and (c) photographic and/or diagnostic imaging evidence demonstrating the clinical need for this service is documented in the patient notes.” (emphasis added)
Dr Dona diagnosed the claimant as having developed capsular contracture that is, the formation of a capsule of scar tissue around the breast implants, as a result of the motor accident. As treatment for this condition Dr Dona recommended bilateral capsulectomy being a procedure to remove fibrous scar tissue around the implants that is, removal of the capsular contracture and exchange of implants.
It is clear from the description of AMA item 45554, as set out above, that item 45554 covers the treatment recommended by Dr Dona, as it clearly covers removal of the implants, excision of the fibrous capsule that is, a capsulectomy, and replacement with new implants that is, an exchange of implants. The treatment concerned is therefore an item specified in the AMA list at item 45554. The AMA list prescribes the amount as $2,270 for the capsulectomy and exchange of implants recommended by Dr Dona. Accordingly, pursuant to ss 3.30 and 8.9 of the MAI Act and cl 34 of the Regulation the insurer is not liable to pay an amount greater than the amount prescribed in the AMA list for item 45554, regardless of the amount said to be payable by the treatment provider.
I accept the insurer’s position that each breast should be treated as a separate surgical procedure with each procedure attracting the maximum amount payable of $2,270. Accordingly, the maximum payable by the insurer under the MAI Act is $4,540 being the current maximum prescribed under item 45554 in the AMA list paid twice, one payment for each breast.
Section 3.31 of the MAI Act provides that “nothing in [Division 3.4 of the MAI Act] prevents an insurer from paying treatment and care expenses that the insurer is not required to pay as statutory benefits under [Division 3.4]”. However, it is clear from the above analysis of ss 3.24, 3.30 and 8.9 of the MAI Act and cl 34 of the Regulation that the insurer is not liable to pay any amount above the amount prescribed in the AMA list. Accordingly, whilst s 3.31 does not prevent an insurer from paying more than the prescribed maximum, should the insurer choose to do so, the insurer cannot be compelled to pay anything more than the prescribed maximum. In this case, the insurer’s liability is capped at $4,540 under item 45554 in the AMA list in respect of the treatment concerned and the insurer cannot be compelled to pay more than this amount.
The above outcome may be perceived as unfair to a person such as the claimant who requires specialist treatment which may not be readily available at a public hospital and in respect of which private hospital fees may exceed the maximum amount payable under the legislation. By application of the MAI Act, the claimant is unable to recover any fees for the treatment that exceed the maximum amount payable under the MAI Act as statutory benefits. This ostensibly produces an unfairness. However, as stated by Harrison AsJ in Allianz Insurance Australia Limited v Shahmiri [2022] NSWSC 481 at [70] “one cannot construe an Act to accommodate a particular circumstance, no matter how unfair that circumstance may be”.
In so far as the position between the claimant and Dr Dona is concerned regarding any costs Dr Dona says are payable over and above the prescribed maximum, s 3.31(4) of the MAI Act provides that an injured person such as the claimant:
“… is not liable to pay, and a person is not entitled to recover from an injured person, the cost of treatment and care provided in respect of an injury suffered in the motor accident concerned if, and to the extent that, the cost of treatment and care exceeds any limit imposed by the Motor Accident Guidelines in respect of the treatment and care.”
Clause 4.94 of the Motor Accident Guidelines (the Guidelines) provides that the limit for the purpose of s 3.31(4) of the MAI Act “is the applicable Australian Medical Association (AMA) rates at the time the treatment/service is provided”. However, this is a matter between the claimant and Dr Dona, as in the circumstances of this matter the insurer cannot be compelled under the MAI Act to pay the treatment provider, or reimburse the claimant, any amount greater than the amount prescribed in the AMA list.
CONCLUSION
For the reasons set out above:
(a) the subject treatment is specified in item 45554 of the AMA list;
(b) the amount payable by the insurer for the subject treatment is capped at the amount specified in the AMA list under item 45554, being a maximum of $2,270, and
(c) each breast is to be treated as a separate surgery and therefore the maximum of $2,270 is payable for each breast, bringing it to a combined total maximum payable of $4,540.
The insurer has approved payment up to the amount currently prescribed in the AMA list for item 45554 for each breast, meaning the insurer agrees to pay $4,540 for the subject treatment. This accords with my reasons and conclusion above. Accordingly, the reviewable decision is affirmed.
LEGISLATION AND GUIDELINES
In making this decision, I have considered the following:
· the application, reply and supporting documentation;
· the MAI Act;
· the Guidelines;
· the AMA list; and
· the Regulation.
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