Catastrophic Ambiguity

One plus one is two. If only quantifying wellbeing were so straightforward and simple. What are doctors supposed to add and subtract when examining a patient to determine if their injuries are catastrophic? It’s not a straightforward formula, and solving for ‘x’ and ‘y’ has never been more complicated.

When the Ontario government handed down its list of reforms for the auto insurance product in November 2009, among them was a proposed review of the definition of catastrophic impairment. The current definition, initially drafted in 1996 under the Statutory Accident Benefits Schedule (SABS), has morphed and shifted through various arbitrator and judicial decisions.

Perhaps the most important shift has been to combine Subsection 1.1 (f) of the SABS ( “55 % or more impairment of the whole person”) with Subsection 1.1. (g) of the SABS (extreme impairment “due to mental or behavioural disorder”) to determine what’s known as “whole body impairment.”

Experts say the combination of physical impairment with behavioural/psychological impairment has led the industry into murky waters when determining catastrophic impairment. Sources say a clear formula no longer exists, in part because the way to calculate psychological impairment lacks any scientific merit or methodology. In addition, the guidelines prescribed by the legislation are outdated.

As the government sits down to draft its formula for determining catastrophic impairment, members of the health care and insurance industries were asked to comment on what they believe are the shortcomings of the current definition of catastrophic impairment and on how they would prefer to see it defined.

‘Catastrophic’ defined

Subsections 1.1 (e), (f) and (g) of the SABS are coming under particular scrutiny.

Subsection 1.1 (e) relates to brain impairment, and essentially relies upon the Glasgow Coma Scale (GCS) in gauging the severity of the impairment. The GCS is an assessment of impaired consciousness and coma based on eye opening, verbal and motor responsiveness. It consists of 15 items in three basic categories: motor response (six items); verbal response (five items); and eye opening (four items). Points are awarded for the best response in each category and category scores are added up to provide a global GCS score. A further explanation can be found in Evidence Based Classification of Brain Impairment: Application to Catastrophic Impairment Classification.

Summed scores range from a minimum of three (total unresponsiveness) to a maximum of 15 (alert, fully responsive). Under the SABS, if a person scores a nine or less “within a reasonable period of time after the accident,” or achieves a score of two (vegetative) or three (severe disability) on the Glasgow Outcome Scale more than six months after the accident, they meet the catastrophically impaired threshold.

Subsection 1.1 (f) is traditionally thought to refer to physical impairments. According to this subsection, in order for an injury to be considered catastrophic, it must be: “an impairment or combination of impairments that, in accordance with the American Medical Association’s Guides to the Evaluation of Permanent Impairment, 4th edition, 1993, results in 55% or more impairment of the whole person.”

Subsection 1.1. (g) covers mental and/or behavioural disorders and stipulates that such impairments must “in accordance with the American Medical Association’s Guides to the Evaluation of Permanent Impairment, 4th edition, 1993, [result] in a class four impairment (marked impairment) or class five impairment (extreme impairment).”

Adding a ‘y’ into the equation

The written definitions above may appear to be straightforward, but judicial decisions and arbitration decisions by the province’s insurance regulator, the Financial Services Commission of Ontario (FSCO), have opened the door to a wide variety of interpretations. One of the most significant of these decisions is the 2004 Ontario Superior Court case Desbiens v. Mordini. This case was the first in which the courts looked at the combination of both psychological and physical impairment to calculate the whole person impairment.

In Desbiens, the physical injuries of the plaintiff, Phillipe Desbiens, were not enough to place him at the 55% impaired threshold. But Ontario Superior Court Justice Harvey Spiegel (as he then was) determined that Subsection 1.1 (f) of the SABS referred to more than just physical injuries. Interpreting Subsection 1.1 (f) as a type of catch-all category, Spiegel also took into consideration the psychological effects of Desbien’s auto accident-related injury. As a result, Desbien’s impairment total exceeded the 55% threshold and was thus defined as a “catastrophic” impairment.

Insurance industry sources suggest the Desbiens decision, which effectively merged physical and psychological impairments, has led to a string of similar results in other arbitration and judicial decisions. This has created confusion and a lack of clarity, they argue.

Tammie Norn, president of Proformance Adjusting Solutions Inc., says that Spiegel’s decision in Desbiens diverges from the original intent of the SABS.

“To me [the decision to combine physical and psychological impairment] came as a real knock to the legislation because, when you read [Subsection 1.1 (f)], you understand that either you have a 55% or more physical impairment or you have a class four [psychological] impairment. It didn’t say that you can combine the two to meet the catastrophic threshold,” Norn says.

“It was a bit of a shock to the industry when that came out, so it will be interesting to see how [the government] handles the definition, given the existing case law.”

The looser interpretation also creates a bit of a loophole for claimants who may not necessarily be deemed catastrophically impaired, but who are borderline, to push past the 55% threshold, she adds.

Lisa Fazzari, corporate claims technical advisor of accident benefits at The Economical Insurance Group, notes that a person with chronic pain disorder may now be entitled to catastrophic impairment benefits. “Yes, chronic pain is severe, did the government intend for people with chronic pain to have access to a $2-million limit?”

Since Desbiens was handed down, reports suggest there has been an increase in the number of applicants making a claim under the “catastrophic impairment” guidelines. According to Insurance Bureau of Canada (IBC)’s submission to FSCO during the five-year auto review, insurers report being presented with increased numbers of requests for determination of catastrophic impairment. “The data on claim size from the SABS Statistical Plan appears to confirm these reports, suggesting that between 2004 and 2007, the incidence of catastrophic claims may have risen by as much as 25%.”

Fazzari says her company has seen a steady increase in applications for catastrophic impairment benefits under Section 1.1(f) since the decision, reaching a record high in 2009.

Lowering thresholds, expanding loopholes

The percentage of catastrophic claims does not represent a majority percentage of insurers’ overall accident benefit (AB) claims. In fact, Fazzari estimates these types of claims represent less than 10% of an insurers’ total claims volume. Still, the increased application for catastrophic impairment benefits creates the potential to increase costs for insurers and place an additional burden on the AB system as a whole.

In discussing the province’s most recent package of 41 reforms, which are designed in part to help lower auto insurers’ claims costs, Leonard Sharman of the Co-Operators suggests that lowering the threshold for catastrophic injuries could potentially wipe out any benefits garnered from the rest of the auto reform package.

“This is a very big issue for us,” he says. “We think this will determi
ne how effective the reforms are, once they determine a definition for it. Lowering the limits will just result in more people trying to attain the catastrophic threshold.”

Les Cabell, claims manager at Chartis Insurance (formerly AIG), says that while the increasing frequency of catastrophic claims creates concern, the severity of such claims poses a real challenge to insurers. “The problem with catastrophic impairments is not the benefits available [for them],” Cabell says. “Most of the time [the problem is] not the assessment decision itself, but it’s the process behind it.”

Applications for catastrophic impairment benefits invariably wind up in the tort system, he says. “The overlap [between the AB and tort systems] is a problem because it muddies the waters in terms of intent,” he says. “The intent of any of the [AB] medical assessments is to provide clarity and purpose, as well as treatment and benefits for an individual.” But when tort is a consideration, what typically happens is that [AB medical] assessments “are developed to support the tort claim, as opposed to being exclusively for the benefit of the applicant within the catastrophic and SABS system.”

Fazzari agrees, adding that a typical assessment cost for a catastrophic claim under Subsection 1.1 (f) is between $15,000 and $20,000, because “now you need to have a number of disciplines assessing the claimant.”

Dr. Sheldon Levy, medical director of Riverfront Medical Services, says that as you lower the threshold for benefit eligibility, you will include more ‘false positives.’ In other words, there is an increase in the number of requests made by way of OCF-18s and OCF-22s for goods and services, as well as assessments, that may ultimately prove to be unnecessary. “You set up a circle as you increase the number of false positives,” Dr. Levy says. “You increase the number of people applying for benefits that they may not medically need. These requests for funding must either be approved or assessed. It has the potential to create an additional cost to the system, and that cost has the potential to be significant.”

In its submission to FSCO, IBC pointed to a 2005 study of 2,100 cases in the United States that were referred for an impairment rating review. Upon review, 80% of the original impairment ratings were found to be erroneous; of these erroneous ratings, 89% were rated higher than what was appropriate.

In order to stem the tide of applicants, Dr. Levy suggests that a possible gatekeeper role might be appropriate. “We need to have something come into place with respect to catastrophic claims,” he says. “We have a lot of people who don’t understand catastrophic impairment filling out OCF-19s [Application for Determination of Catastrophic Impairment].”

This puts the insurer in a position in which it must respond. To better position themselves in responding to these OCF-19s, insurers might order further medical assessments to assist in making a determination. If the claimant is not deemed to have sustained a catastrophic impairment, more often than not the insurer’s position is rebutted. The individuals completing the initial application for determination are rarely responsible for crafting these rebuttals, Dr. Levy says. “So, you have inexperienced or untrained individuals who aren’t held to the same level of expertise as those who are charged with responding to the application,” Dr. Levy says. “And the initiators of the process are rarely, if ever, utilized in terms of rebutting their own application, so it goes to a third party.”

And so, Dr. Levy maintains, “there has to be some threshold for access to the catastrophic impairment determination process. Whoever fills out the OCF-19 should have a certain level of expertise and knowledge. Because once you initiate the process, you can’t stop it. An insurer is compelled by legislation to respond.”

FSCO eliminated designated assessment centres (DACs) from the SABS in March 2006. DACs were designed to avoid discrepancies between medical assessments initiated by claimants and their insurers. DACs were authorized to conduct independent assessments designed to balance the interests of both insurance companies and claimants. Insurers were required to initiate and pay for the cost of the DAC assessment, and claimants were required to cooperate in the assessment process.

With the elimination of DACs, there is an absence of any standards or guidelines for catastrophic determinations, IBC said in its report to FSCO. If claimants dispute the determination of an insurer, they are entitled to be re-assessed by their own health care provider in order to address the issues raised by the insurer’s medical assessment.

“It is noteworthy that between 1996 and 2004, during most of the period that FSCO’s catastrophic determination guidelines were in effect, no decision [to define an impairment as ‘catastrophic’] made by a DAC was disputed through arbitration or court process,” IBC contended in its report to FSCO. “The financial incentive of the rebuttal feature of the post-DAC regulations is encouraging more health professionals to enter the process of doing catastrophic evaluations.”

Lost in translation

One key element is missing from any proposed formula that would combine physical and psychological impairments. Medical experts say the guidelines mandated by the Ontario government are outdated. In fact, the entire validity of the GCS has been called into question as a medical test.

The SABS requires that injuries be assessed according to the 4th edition of the American Medical Association’s Guides to the Evaluation of Permanent Impairment. The fourth edition is now nearly 20 years old.

Norn says the use of outdated guides creates a disconnect. “There’s a reason why there have been two revisions since the 4th edition,” she says. “I would assume that if they’re going to look at the [catastrophic impairment] definition, they’re going to have to look at whether or not they are going to continue to use the AMA guidelines [to define it] and whether or not they are going to use the current one.”

Dr. ZoharWaisman, a consultant psychiatrist with extensive experience in medical evaluations of personal injury litigants, notes that a 6th edition of the AMA guidelines was published in 2008. “The 6th edition contains clearer guidelines as to impairment ratings,” Dr. Waisman says. “It contains better tables and charts that would point us in the right direction in terms of percentage ratings.”

Until Desbiens, percentage ratings were never assigned to Subsection 1.1 (g) impairments, Dr. Waisman observes. Rather, medical practitioners would classify the person as moderately, mildly or severely impaired. “The difficulty we have in the (g) criteria is that it’s not clear how we derive that percentage,” Dr. Waisman says. “There’s no scientific method that would allow us to derive a percentage score. So that lends the guides to wide interpretation and creates disagreement. There’s no clear understanding or formula we can use to derive that percentage.”

Chapter 4 of the AMA guidelines specifically talks about the mental issues that might emerge as the result of a brain injury. But there is no similar chart to help track emotional problems — such as depression, for example. “A lot of the people we see don’t have a brain injury at all, but they do have psycho-emotional problems,” Dr. Waisman says. “But we don’t have any guides to view that. The courts argued that you can draw conclusions from that chart, but there is no clear understanding how to transpose the information.”

Medical experts are instructed to find “the most analogous” impairment if a particular impairment is not listed in the guides, Dr. Waisman explains. “If someone has a chronic pain disorder, that’s not the same as having behavioural problems from a brain injury,” he says. “How can you apply percentages from the brain-injured population to other populations that are not brain-injured? It’s open to interp
retation. The difficulty is where the percentages were derived from, and what scientific method was used to derive them.”

Dr Levy agrees. He says without a validated methodology to convert the mental/ behavioural Subsection 1.1. (g) score from a classification to a percentage rating, it is impossible for those using the guides to do so on a consistent basis with any degree of scientific certainty..

Medical v. legal

The AMA guidelines are not the only outdated piece of the SABS. In its report to FSCO, IBC says “catastrophic” brain impairments are currently defined based on academic literature published between 1975 and 1981. “In addition, the definition of brain impairment and its relationship to the predictability of long-term outcomes have come under scrutiny from consumers, government, health care providers and private payment stakeholders.”

Consequently, a panel of experts from the Canadian medical field met in 2008 to develop an evaluation framework based on the best evidence available. A report of their work was intended to help to predict future care needs after traumatic brain injuries for adults older than 21 years of age. The panel developed the following definition of a catastrophic brain impairment: “Catastrophic brain impairment is trauma to the brain that results in physical and/or cognitive difficulties severe enough that an individual cannot function in the community in normal expected adult roles and require professional, social and/or physical support to maintain them safely in the environment in which they live.”

In its discussion, the panel examined the use of the GCS to determine brain impairment. The panel noted that while the GCS test is straightforward, easy to administer and sufficient for determining impairment within a short time frame after an injury, it is not very effective at determining long-term effects.

Dr. Levy notes the 2009 Ontario Court of Appeal case Liu v. 1226071 Ontario Inc. (Canadian Zhorong Trading Ltd.) recently found the GCS is a legal test, not a medical test. “The idea of it being a medical test is that you apply a set of medical criteria to identify those people most in need of catastrophic benefits,” Dr. Levy says. “But, if you make it a legal test, you’re simply looking at an isolated number, post-accident, potentially out of context and out of sync with any real or true medical sequelae [complications caused by a condition].” In contrast to the medical community’s focus, which is ensuring appropriate treatment to those that require it, the court’s focus would appear to be on the abstract number nine — the GCS number below which a person meets the definition of a catastrophic impairment. When you start to focus soley on the number, Dr. Levy says, “you’re losing the medical component of the assessment. You’re basically saying: ‘The GCS was less than nine, they had a brain impairment, and therefore they are catastrophic and are entitled to apply for access to extended benefits.’ Whereas with the medical test, you can say: ‘The score was less than nine, however it improved to greater than nine within a reasonable amount of time, therefore perhaps they don’t meet the definition of catastrophic impairment and do not medically require access to extended benefits.'”

Solving for clarity

The lack of clarity surrounding the current definition and its methodology means adjusters, insurers and medical practitioners must basically rely on their best judgement to determine whether or not someone is catastrophically impaired. “It’s a very long and expensive process, it would be nice to have some clarity,” says Laurie Walker, an adjuster at SCM ClaimsPro.

In the meantime, Walker says, adjusters are relying heavily — perhaps too heavily — on assessments. “The brain injuries are probably the most complex,” she says. “Every person’s brain and how they receive an injury and how they will respond to rehab is different. Instead of adjusters trying to understand (or if they don’t have the time to understand), they’ll just have it assessed, which is expensive and creates a delay in treatment.”

Norn agrees, referencing the government’s recent recommendation to have specialized training for adjusters for complex injuries. She says to provide training that would help an adjuster view the impairment as a combination of the physical and psychological, it would require “getting the right health care professionals to provide the training on what this looks like.” She notes adjusters these days might not be dealing with a 55% injury threshold or a Class 4 injury, “but look at all of these impairments and put them together and quite possibly you are dealing with a catastrophic case here,” she says. Ideally, training workshops would contain examples of these types of cases. “Then the next time the adjuster has one of these cases, he or she can think: ‘This is similar to what we dealt with in our workshop,'” Norn says. In turn, this would help adjusters figure out what type of medical health care providers they must use to help them understand the type of injury in question.

Other industry stakeholders hope to see a new, concrete definition that eliminates any cause for confusion. “We need a definitive, clear, objective definition,” says Ralph Palumbo, IBC’s vice president for Ontario. “One of the things IBC is suggesting is that paragraphs (f) and (g) be removed [from the SABS].”

Until a concrete definition is drafted, IBC would like to see — using a clear, unambiguous language — a list of injuries and impairments considered to be ‘catastrophic’ for the purpose of the SABS. “If you’re going to go down the road and try to redefine catastrophic impairment, that’s going to take a long time,” Palumbo says. “So, in the short term, while you’re preparing the regulations, at least bring some clarity to the auto reform initiative by saying: ‘These are the injuries and the impairments.’ That way everyone understands exactly where we are and is reading from the same page.” Fazzari agrees. “If you don’t meet any of the impairments listed, then you’re not catastrophic,” she says. “We can underwrite for that.”

Scott Blodgett, media relations officer at the Ministry of Finance, says the government’s timelines for discussing the ‘catastrophic impairment’ definition have not yet been finalized. Nor is it known which stakeholders will be participating in the discussion. As for what is on the table, Blodgett said the government intends to study what other jurisdictions are doing. Manitoba, for example, recently passed Bill 36, which includes a broad definition of catastrophic injury. The definition includes, among other factors: “the functional alteration of the brain resulting in determined impairment of 50% or more,” or a combination of a list of injuries. The list includes “functional alteration of the brain resulting in a determined impairment of 30% or more but less than 50%,” resulting in a whole body impairment of 80% or more. Quebec, on the other hand, has a method that isn’t likely to be adopted by the Ontario government anytime soon. Blodgett notes that Quebec’s use of a ‘meat chart’ — which graphically itemizes injuries and their projected treatment costs — compensates accident victims in the absence of tort recovery, but is not a direction that Ontario is likely to follow.

Should the province opt to continue with the practice of merging physical and psychological impairments for the purpose of determining “whole body injury,” Sharman saysThe Co-Operators would like to see the threshold go to 65%, rather than the current 55%. This would help correct for the anticipated “false positives” in determining whether claimants meet the catastrophic threshold.

Whatever the outcome of the changes may be, sources agree there should be some formal communication once the new guidelines are drafted. In this way, everyone — including insurers, adjusters, health care providers and consumers — will have a common understanding about what constitutes a “catastrophic” auto i
njury. “Everyone needs to be on the same page, and adjusters need to be properly trained in handling and identifying these types of conditions,” Norn says. “You need to know early on if you’re dealing with a catastrophic claim. And you’re not going to know that unless you understand the definition.”

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Perhaps the most important shift has been to combine Subsection 1.1 (f) of the SABS ( “55 % or more impairment of the whole person”) with Subsection 1.1. (g) of the SABS (extreme impairment “due to mental or behavioural disorder”) to determine what’s known as “whole body impairment.”