insurer not provided opportunity to adjust in real time so no retroactive attendant care

September 14, 2015, Kitchener, Ontario

Posted by: Robert Deutschmann, Personal Injury Lawyer

Heard Before: Adjudicator Charles Matheson

Date of Decision: April 14, 2015

Issues:

Mr. Andrew Reichert was injured in an ATV motor vehicle accident on July 22, 2006. He lost control of his ATV causing it to flip over onto him and causing catastrophic injuries. Andrew Reichert is a paraplegic, he continues to have no feeling below his waist and has severe neurological pain, coupled with the inability to keep his balance while sitting in a wheelchair.

He applied for and received statutory accident benefits from Gore, and they continued to pay Attendant Care Benefits (“ACB”), until January 9, 2013, when Andrew Reichert submitted a new Form 1 for the amount of $6,956.16. Gore paid the maximum benefit under the Schedule of $6,000.00 as was recorded in the OCF-9, dated February 28, 2013. On or about March 26, 2013, Andrew Reichert submitted an OCF-6 or expense claim form which requested ACBs for $7,352.01 per month on an on-going basis and retroactive to July 22, 2006. The parties were unable to resolve their disputes through mediation, and Mr. Reichert applied for arbitration at the FSCO.

The issues in this Preliminary Hearing are:

1. Is Andrew Reichert entitled to claim Attendant Care Benefits retroactively? If Andrew Reichert is allowed to claim Attendant Care Benefits, for how far back can he claim?

Result:

1. Andrew Reichert is not entitled to any retroactive Attendant Care Benefits.

HEARING

Andrew Reichert’s arguments for the retroactive ACBs, in part, are as follow:

1. There was never a denial of ACBs prior to March 26, 2013 and, as such, the limitation period clock never began to run prior to March 26, 2013;

1. As found in Smith v. Co-operators, a limitation period cannot begin to run against an insured without a clear and unequivocal denial or refusal of benefits by the Insurer. In order to rely on a limitation period defense, the Insurer must have issued,

“a clear and unequivocal refusal of benefits, which sets out the applicant's right to engage the dispute resolution process in a clear and straightforward manner.  This is an objective test to be applied without regard to what the insured might or might not have known following a termination of benefits”.

1. Retroactive assessments of ACB are permitted under the SABS, as Andrew Reichert relies on the findings of Economical Mutual Insurance Company and Ms. M.G appeal case and Subramaniam v. Wawanesa Mutual Insurance Company.

Gore’s arguments, in part, are as follows:

1. Andrew Reichert is statute barred from arbitrating the retroactive ACBs as the Insurer wasn’t given any notice during the normal course of adjusting the file that there was a need or a requirement for more ACBs, other than those requested on the Form 1s, which were paid in full each month;

1. As in Oakville Hydro, Justice Spence J.’s findings at paragraph 9 to 13 can be summarized that the material facts giving rise to a cause of action must be discoverable. The limitation period will run from the time Andrew Reichert has or ought to have had knowledge of his/her potential claim.

1. The Insurance Act and the Limitations Act place a positive obligation on an Applicant to mediate and/or litigate a disputed benefit after notifying the Insurer of the circumstances giving rise to their claim, which must be done within two years of the Insurer’s refusal to pay said benefit; In Subramaniam, Arbitrator Rogers denied the Applicant’s claim for retroactive ACBs stating:

“Section 39 of the schedule provides that an insurer may, but is not required to pay an expense for attendant care, incurred before a properly completed Form 1 is submitted to the insurer. That section means that Wawanesa cannot be required to pay attendant care expenses is excess of $709.03 per month, for any period before Mr. Subramaniam submitted Ms. Bielaski’s Form 1.”

The undisputed evidence is as follows:

a)      Andrew Reichert has suffered, as a result of the accident, catastrophic injuries;

b)      Andrew Reichert submitted expense forms (OCF-6) which mirrored the Form 1 amount on a monthly basis since September 2006;

c)      The amounts changed on the Form 1s and the corresponding OCF-6s as Andrew Reichert was being reassessed. There were no less than six reassessments and Form 1s submitted between September 2006 and January 2013;

d)     All the Explanation of Benefits forms (OCF-9) were clear and concise as to the remedies available to Andrew Reichert should Andrew Reichert not agree with the amount being paid;

e)      The last OCF-9 was generated on April 7, 2008;

f)       All the Form 1s were initiated by Gore throughout the time frame of September 2006 to December 2012;

g)      The last assessment and corresponding Form 1 prior to January 2013 for ACBs was done on July 30, 2009, followed by a letter explaining the payments, which was generated on September 11, 2009;

h)      The first occasion where a reassessment report with supporting narrative accompanied by a new Form 1 (generated by the Applicant) was January 9, 2013. The monthly amount requested was $6,956.16. In essence, this is the first competing Form 1 submitted by the Applicant;

i)        An OCF-9 was generated as a result of the January 9, 2013 report on February 28, 2013 stating in part that ACBs of $6,000.00 maximum was paid;

j)        On or about March 26, 2013, Andrew Reichert submitted an OCF-6 requesting retroactive ACBs;

k)      On or about March 26, 2013 Gore responded to the above OCF-6s with an OCF-9 and the refusal to pay retroactive ACBs;

l)        A series of competing Form 1s were generated all requesting more ACBs that exceeded the maximum amount allowable under the SABS;

m)    Gore continues to pay the maximum amount allowable under the SABS.

The Arbitrator reviewed the SABS in order to identify the appropriate sections that apply to this case. The pertinent sections to this case regard Attendant Care Benefit, Notice and Application for Benefits, and Time Limit for Proceedings. The Arbitrator agreed with Mr. Reichert that the limitation period clock begins to tick after the Insurer properly refuses to pay a benefit.

The Arbitrator agreed with Gore’s position through the Insurance Act and the SABS, provide for a positive obligation for Andrew Reichert to notify Gore of the circumstances giving rise to a disagreement of a benefit being claimed, which in turn, allows for the immediate adjustment of a claim or, if refused by the Insurer, the mediation or litigation of same. The Arbitrator also emphasized the words “to notify the Insurer”, as this is a vital step in the denial process. Without notification of a claim or counter claim, the Insurer cannot properly adjust the claim or refuse to pay a benefit.

The Arbitrator determined Form 1s are the only proper format for seeking ACB benefits. This was not achieved by Andrew Reichert until January 2013, and the amount is capped at $6,000.00 per month, which Gore paid upon receipt of the new Form 1 in January 2013.

In regards to the concepts that Andrew Reichert can provide a competing Form 1 and the Insurer is obligated to continuously adjust a claim, this can be found in sections 39(1) and (7) of the Schedule. Section 39(1) allows for “an assessment of attendant care needs for the insured person”. It was the Arbitrator’s view that this implies that “an assessment” shall determine the ACBs being paid, and is not restricted to just the Insurer’s assessment, which seems to be a recurring argument Andrew Reichert raises. Further, this places a burden on Gore to adjust the file in an on-going manner.

These concepts are further entrenched when section 39(7) allows for competing or new assessments of attendant care needs which “may be submitted to an insurer at any time”. Applicants must communicate their benefit claim in a timely manner and allow the Insurer to adjust the claim on an on-going basis. Once denied, after the Applicant’s new evidence has been considered, the limitation clock begins to tick. This regimen is designed to prevent the litigation of benefit disputes by ambush. This process did not happen in this case.

In Mr. Reichert’s case, there has been no evidence produced that he disputed the current monthly Form 1s by either presenting a OCF-6 showing additional attendant care expenses beyond the existing Form 1, or a by producing their own competing Form 1. The evidence shows that it wasn’t until January 9, 2013, that a new Form 1 was submitted to Gore which notified Gore that there was a disputed issue with ACBs. Gore properly adjusted the claim and paid the maximum amount per month allowable under the SABS of $6,000.00, in a timely manner, when they were notified of the competing Form 1.

The Arbitrator agreed with Mr. Reichert’s counsel that a “proper refusal” to pay ACBs wasn’t issued by Gore which would trigger the limitation period. That being said, the refusal did not materialize because Gore didn’t know that there was a dispute in order to refuse another level of ACBs, nor was Gore given an alternative to the existing Form 1s.

The Arbitrator determined that it is inadequate and inappropriate for Andrew Reichert to submit an OCF-6 for outstanding retroactive ACBs when the SABS clearly identifies that Form 1s are the only appropriate format to do so. Participating in this type of application for retroactive ACBs prevents Gore from having the opportunity to adjust the file in real time.

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