IBC expresses concern about a proposed “interim” CAT definition possibly becoming a fraud magnet

Responding to a proposed new definition for catastrophic (CAT) impairment, the Insurance Bureau of Canada (IBC) says two issues are central to insurers – upholding the use of “hospital admission” as a gatekeeper function for determining a catastrophic impairment, and concern that a suggested “interim” catastrophic impairment status might amount to a fraud magnet.
IBC was responding to an expert medical panel’s final report to the Financial Services Commission of Ontario (FSCO), entitled Recommendations for Changes to the Definition of Catastrophic Impairment.
Two of the panel’s recommendations in particular attracted the attention of IBC’s submission.
One is that an “interim” catastrophic impairment status be created for patients whose impairments specifically meet or exceed the criteria outlined under definition 2(d) 14 (section 4.1.6), 2 (e) (section 4.1.7) of the Statutory Accident Benefits Schedule (SABS).
“The purpose of the interim catastrophic impairment status is to ensure that these insured individuals have access to the rehabilitation services that are necessary to improve their health and maximize their chances of achieving a final impairment level that is less than catastrophic,” the panel wrote.
IBC submitted it is not the intention of the panel to create an easily accessed early determination of CAT status without monetary or temporal limitations. Instead, IBC noted, the panel is attempting to create “a new ancillary benefit to address a subset of cases.” These include:
•The non-CAT range of benefits is/will be exhausted.
•Some additional services hold promise for improving the person to a better-than- CAT level of impairment.
•The person’s care is under the management of a treating physician.
•The level of impairment is at a CAT level, although not necessarily permanently so.
“There is a significant concern about the abuse that could flow from this proposed extension of coverage,” IBC says in its submission to FSCO. “This concern is heightened by the use of descriptive terminology suggesting that it is an ‘interim’ step to CAT designation, and comes with access to CAT-type benefits.
“Either of these attributes would turn access to early extended benefits, intended for very serious injuries, into a magnet for abuse and, with that, costly dispute processes.”
The panel also incorporated rehabilitation in a public facility – such as a hospital – as a key element in its definition of a catastrophic impairment.
For example, to be assessed as catastrophically impaired, an insured person must meet the following criterion, among others: “the insured person is currently participating in, or has completed a period of inpatient rehabilitation in a public rehabilitation facility.”
IBC says the province needs to embrace the role contemplated for the publicly funded health system as a “gatekeeper” for accessing high-level benefit levels from the SABS. “In our view, the involvement of the publicly funded health system…is essential for the viability and effectiveness of the panel’s model.”