Canadian Underwriter

Tight Cap

February 2, 2017   by Greg Meckbach, Associate Editor

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Concerns have been raised following the release of a decision January 11, in which a Financial Services Commission of Ontario (FSCO) arbitrator ruled in favour of Co-operators General Insurance Company.

The insurer paid Nicole Breadner $2,200, plus tax, for the cost of one neuropsychological assessment. But Breadner, who was injured in a vehicle accident in February 2014, had submitted a treatment and assessment plan recommending a neuropsychological assessment with costs totalling more than $5,000.

On Breadner’s treatment and assessment plan (OCF-18), the breakdown of related costs included $2,000 for a neuropsychological interview and another $2,000 for neuropsychological testing. (The hearing was held in February 2016, before the province transferred responsibility for accident benefits claims disputes to the Licence Appeal Tribunal.)

In agreeing to pay just $2,200, plus tax, for Breadner’s assessment, The Co-operators argued that the work done was actually only one assessment/examination.

Section 25(1) of SABS stipulates that an auto insurer must pay “reasonable fees charged by a health practitioner for reviewing and approving

a treatment and assessment plan” for medical and rehabilitation benefits, under certain circumstances. Section 25(5) further stipulates that an insurer “shall not pay… more than a total of $2,000 in respect of fees and expenses for conducting any one assessment or examination and for preparing reports in connection with it, whether it is conducted at the instance of the insured person or the insurer.”

The cap has been in place since 2010, when the Ontario government made reforms to auto insurance rules.

FSCO arbitrator Caroline King notes in her decision that in the latter section, the word “report” is plural. “This indicates that the number of reports does not itself trigger entitlement for additional assessment/examination costs,” King writes in the ruling.

“This comes up for us in cases all the time, when assessors are submitting invoices that are more than the $2,000 cap with even just one assessor,” says Shannon Gaudet, a Toronto-based associate for Lerners LLP who practices insurance defence law.

Gaudet suggests that with the Breadner ruling, when receiving accident benefits claims, “insurers will be taking a closer look at the scope and nature of the work that was done to perform the assessments, and to consider whether or not it constitutes one assessment or two.”

Wendy Moore Mandel, a partner with Thomson Rogers suggests that “as medical experts become expensive, the $2,000 cap can become a problem.”

The $2,000 cap is “going to be more of a problem for insurers than for plaintiffs who have tort cases because [defendants’ insurers] will fund it anyway,” says Moore Mandel.

The $2,000 cap “has proven difficult for some more complex assessments, including neuropsychological assessments,” notes a Smitiuch Injury Law blog. “In order to obtain a reliable assessment, the cost is well beyond $2,000,” it states.

“On the tort side, I usually see neuropsych assessments for something in the $10,000 range – maybe a bit more, maybe a bit less – just because the amount of testing is so significant,” says Tara Lemke, an associate with Williams Litigation Lawyers. Noting that neuropsychological assessment reports can be in excess of 30 pages (with 20 of those test results that have been performed), “I can certainly understand why claimants’ counsel are trying to get that broken into multiple assessments,” she says.

“I have seen other instances where they are successful in that regard to help defray some of the costs of these assessments,” she adds.

Lemke, Gaudet and Moore Mandel were not involved in the Breadner case.

Breadner “is extremely relevant to insurers and to claimants, especially in the new age of capped costs for assessments,” Ashleigh Leon, a partner with Miller Thomson LLP, which represented The Co-operators, writes in Lexology.

“There are numerous assessments which appear to be multidisciplinary in nature, such as neurocognitive examinations and psychovocational examinations, just to name a few,” Leon notes.

Since 2010, many plaintiff’s lawyers and insurers “have been getting around” the $2,000 cap on assessment fees “by dividing up the assessment into two distinct assessments,” argues the post from Smitiuch Injury Law.

“For the most part, this has been widely accepted as a way to comply with the statutory limit while getting a fairly reliable assessment report,” the blog states. “There have been a few insurers who have not agreed with this approach.”

Insurers should be “very diligent in examining the costs breakdown on the OCF-18s submitted to determine… whether the work to be done constitutes one or more assessments, regardless of the number of reports the assessor(s) intends to complete,” Leon writes.

“I expect that with [the Breadner] decision, insurers are going to use it to say, ‘No it’s one assessment,'” says Gaudet.

A neuropsychological assessment is usually done when an accident victim has a brain injury, Lemke says. “Because there is such an overlap between the effects of a significant psychological disorder versus what could be attributed to a traumatic brain injury, in some cases there is a question of, was there actually a brain injury, and if so, what are the measurable effects and is that due to a brain injury or is that due to a psychological sequela?” she comments.

Lemke argues that if arbitrators “stick to the fact that it really is only $2,200 for a neuropsychological assessment, I think that is going to make it much harder for both insurers and claimants to actually get those assessments completed because I can’t imagine that the doctors

would be willing to do, say, a $10,000 or $12,000 assessment, for $2,200.”

Moore Mandel maintains that a neuropsychological assessment represents “the most glaring example” of a medical assessment that would cost more than $2,000, given its length and different components.

While she does not disagree with the arbitrator’s ruling in Breadner, “the issue I think is going to be a tougher one for insurance companies than for plaintiffs,” Moore Mandel predicts.

“If plaintiffs have a tort case, then they are going to get the full testing and the full reporting done anyway, even if the no-fault insurer’s contribution is limited to $2,000, because we will just pay for it on the tort side of the case,” she says.

“I think in the short term, insurers will see this as a cost savings, because they will go, ‘Great. We don’t have to respond to the higher costs for these neuropsych assessments that are being asked for by insured people,” she says.

“But in the long term, when they come to realize in those cases where the insurance company needs a neuropsych and can’t afford to get it, their hands are going to be tied,” Moore Mandel adds.

Although Lemke has no quarrel with having a cap on assessment fees, it must “reflect the reality” of neuropsychological assessments, meaning there should “be some very limited, very strict exceptions to the $2,000 rule.”

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