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Focus On - Final draft gives SABS regs some teeth

When the Ontario Liberals first promised toabolish designated assessment centres (DACs) in the weeks leading up to theOctober 2003 election, Premier Dalton McGuinty said the centres — intended toprovide neutral assessments in disputes over claims under the StatutoryAccident Benefits Schedule (SABS) — were too expensive, too cumbersome, andfailed to respond to the needs of accident victims.

Philippa  Samworth says changes will make the system easier and fairer to insureds.
Philippa Samworth says changes will make the system easier and fairer to insureds.
Now McGuinty has put his money where his mouth was: in late June, the government released "final draft" amendments to the SABS regulations. They eliminate DACs, introduce a new regime, and put teeth into that regime by way of amendments to the Unfair or Deceptive Acts or Practices regulation.

"The government is replacing the DAC system with an insurance examination system," says Dale Orlando of McLeish & Orlando LLP.

A letter dated June 27 from Bryan Davies, former chief executive officer and superintendent of financial services at the Financial Services Commission of Ontario (FSCO), advised stakeholders of the changes.

Davies offered stakeholders an opportunity to review what he calls the "final draft regulations" in the context of a "brief technical review" by FSCO "before the Ministry takes the regulation forward for final approval." The review process was conducted in July.

The government believes the new system will streamline the claims process. It allows parties with disputes over assessment or examination findings and benefit determination to proceed directly to the dispute resolution system at FSCO or to the courts following mediation.

The current version of the regulation follows on one released in December 2004.

"The most important change allows claimants to [give] the insured's caregiver a chance to comment on the medical report obtained by the insurer," says Philippa Samworth of Dutton Brock LLP.

Under the DAC system, claimants could be subject to three different assessments in any one claim: from their own health care providers, from examination, and by DACs.

"Because DAC decisions were binding, adjusters often sat back and took the path of least resistance by sending claimants to the DAC for determination, even in slam-dunk cases," Orlando says. "Given the duty of good faith and the unfair practices amendments, I hope that the new system will run in a more efficient manner."

Samworth believes it will. "I'd like to think these changes will make our system easier and fairer to insureds and give them a better understanding of what the assessors are saying," she said. "Insured shouldn't have to go through the myriad of medical examinations and reports that occurred under the DAC system."

Under the new regime, claimants will still be allowed to obtain assessments from their own health care providers, and insurers disputing claims will have to schedule a separate medical examination with an expert of their choosing before making a decision on benefit entitlement. The insured can then have his or her health care provider make written comments about the insurer's report.

"Hopefully that will effect settlement or narrow the issues pending the dispute resolution process," says Samworth.

There are benefits to insurers as well: the DAC system allowed referrals to up to four different types of DACs. Each centre separately reviewed medical and rehabilitation issues, catastrophic impairment, disability, and attendant care issues. The new system lets insurers combine broad benefit issues into one comprehensive examination.

The government also hopes to eliminate the large multidisciplinary teams involved in DAC assessments, where health care providers assessed and reviewed treatment plans proposed by the same type of health care provider.

Under the new system, claimants and insurers must use single examiners wherever feasible. Multidisciplinary teams can be used if justified by the nature of the claims and the benefits of using such teams.

From a governance perspective, examiners will be subject to the rules of their governing body and the requirements of the Insurance Act. They must adhere to the practice standards of their health profession when conducting examinations. Insurers who request an examination from an unqualified professional commit an unfair business practice.

The insurance examination must take place no further than 30 km from the claimant's home in the Greater Toronto Area, and not more than 50 km from the claimant's home elsewhere in Ontario. If no qualified practitioner is available within these parameters, the insurer may arrange an examination "at a location that is reasonable in the circumstances."

Subject to defined parameters, the cost of examinations becomes a matter of negotiation between individual insurers and examiners.

Rigorous procedural time frames permeate the new system, including:

· Insurers must schedule examinations within five to 10 days (20 when there is a catastrophic impairment determination) after notifying the claimant that the insurer requires an examination by its own expert, but the parties can agree on an alternative date;

· Assessors must provide reports to insurers within 10 days of an examination, or 30 days in the case of catastrophic impairment;

· Insurers must make benefit determinations within five business days after receipt of the examination report. They must also provide copies of the report to the claimant and the claimant's health care practitioner; and

· Mediations must take place within 60 days of an application to FSCO.

Perhaps most importantly, the government has put some teeth into SABS. The amendments to the Unfair or Deceptive Acts or Practices regulation make it an unfair practice for an insurer to deny entitlement without a medical examination, to misrepresent the opinion of an examiner, to request an examination when not reasonably required, or to fail to pay a claim or for the costs of an assessment within the prescribed time limits in SABS.

The release of the final version of the draft regulations means that the process of DAC elimination, which started in March 2004, is nearing a close.

At the time a government white paper recommended abolishing DACs and replacing the system of separate evaluations from the "plaintiff's doctor" and the "insurance company doctor" with an "Expert Assessor Network," which would be a pool of doctors to whom FSCO would refer cases.

But the Association of Designated Assessment Centres (ADAC), looking at the disenfranchisement of a highly profitable business, objected vehemently.

The government listened. Colle appointed Samworth as a consultant. After five days of hearings and over 100 written submissions, Samworth made confidential recommendations to the government.

Soon afterwards, the Liberals went back to the drawing board. The December 2004 regulation was the result.

It took approximately six months for FSCO to come up with the final draft regulations after hearing over 200 submissions.

Still, the process isn't quite at an end.

"The latest word on implementation is Feb. 1, 2006," Samworth says.

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