Ontario’s Quagmire

Ontario’s mandatory, five-year auto insurance review is due to wind up shortly. One issue will be the credibility of the accident benefits (AB) or “no-fault” side of the system — a system that has been hijacked and looted by some assessment companies, legal representatives, health practitioners and rehab clinics.

The Ontario Motorist Protection Plan (OMPP) provided limited, no-fault benefits when it was implemented in 1990. Prior to that, the province’s auto accident compensation was provided mainly on the basis of tort. Various governments have tinkered with first-party benefits since the system was greatly expanded in 1994. Each amendment has added successive layers of complexity; now, the 27-page Statutory Accident Benefits Schedule (SABS) of 1996 has expanded to 81 pages in length. Almost no one outside the industry understands it.

I practiced personal injury law during the pure tort system of the 1970s. I returned to the insurance industry to investigate suspicious accident benefits (AB)/bodily injury (BI) claims from 1996 to 2006. My professional background has trained my eye to the abuses I’ve witnessed and investigated in the no-fault system.

In many situations in which abuse is occurring, the primary care provider is a regulated health professional employed by an unregulated businessman. The primary care provider in this example is typically getting paid an hourly rate far below that for which the insurer is being billed.

Sometimes clinic owners are forging the names and registration numbers of regulated health professionals without the knowledge of the targeted health care providers. Such fraud is perpetrated through the use of banked practitioner electronic signatures, rubber stamp signatures and electronic cut-and-paste.

Another major problem is the number and cost of assessments. Personal injury lawyers use the assessments, paid for by the first-party insurer, in both their no-fault and tort files. This encourages spurious tort litigation in minor cases, despite the threshold in tort for non-pecuniary claims.

It’s not surprising that in some minor accident claims, once certain legal representatives and rehabilitation clinics/assessment companies get involved, the insurer is bombarded with 10-15 applications for approval of an assessment or examination (OCF 22), often in groups. The deluge includes forms for in-home needs assessments, psychological assessments, Functional Abilities Evaluations (or FAEs), in addition to assessments for driving, orthopaedics, neurology, work site needs and Temporo Mandibular Joint (TMJ) pain. All get submitted regardless of age, injury or the severity of the motor vehicle accident.

Here’s one dirty trick: sending OCF 22s by fax to departments in the insurance company that don’t perform the claims resolution function (such as the underwriting department or the CEO’s office).The goal here seems to be to get adjusters to miss timelines so the insurer has to pay for them by default. Another desired result is to put the claim outside the (WAD 1 or II) Pre-approved Framework (PAF) Guidelines, so they can access more treatment or extend income replacement benefits (IRB) to beyond 16 weeks.

Insurers are rarely allowed to speak to regulated health professionals that sign the OCF 22s without paying a fee or arranging appointments that must be made within the three-day timeline required for a response.

Here’s another dirty trick: an unscrupulous legal representative or clinic will ask the client/insured to sign –but not date — Part 9 of the OCF 22. That page then gets photocopied for each assessment requested, and the dates get inserted. The client never sees the forms again after he signs the first one. In Part 9, the insured is:

• certifying the information contained in the form is true;

• authorizing treating health professionals to release only such health information that is reasonably required to do the assessment; and

• acknowledging it is a criminal offence to attempt to defraud an insurance company.

The use of this form without the client’s informed consent is a fraud on the insurer and a breach of the client’s privacy rights under the Personal Information Protection and Electronic Documents Act (PIPEDA), but it is routine practice.

How are abusers avoiding discipline or charges? SABS is too complicated for the governing colleges to deal with. Also, privacy restrictions prevent insurers from sending the claim files to the colleges. Law enforcement and judges also do not understand the SABS. The few charges laid by FSCO investigators under the Insurance Act are only scratching the surface.

In the meantime, there are examples of unrestrained over-billing. If an OCF 22 suggests a neurological assessment at a cost of Cdn$2,200 and the insurer denies it, the insurer could send it for a paper review (at a cost of $450). If the review comes back saying the assessment should not cost more than Cdn$1,000, the insurer ends up paying Cdn$1,450. All of this money goes to independent evaluation (I. E.) companies; none of it goes towards treating the claimant. Also, the adjuster’s valuable time is taken away from working on legitimate claims.

Part 9 of the OCF 22 allows for the signature of a health professional or social worker in place of that of the insured (i. e. in the event of an emergency, etc). But in these instances, the health professional must assume responsibility for obtaining the claimant’s consent. So when insurers question health professionals about the discussions they have had with the claimants about treatment and consent, and the I. E. company simply withdraws the OCF 22, one inference that might be drawn is that no discussions took place.

Even in minor accident situations, insurers often get requests for assistive devices at grossly inflated prices. Tub scrubs with a market value of Cdn$9 are billed at between Cdn$20-30. Back supports worth Cdn$70-80 on the open market are billed at Cdn$130. Some minor accident scenarios feature claims for standalone hairdryers and vacuum cleaners. Since chiropractors are not allowed by their college to charge their patients more than what they pay for an item (plus a reasonable dispensing fee), some insurers are requiring that assistive devices be provided by the treating chiropractor.

Insurers must pay for Attendant Care (AC) assessments, a Form 1 under s. 24 of the SABS, without any prior approval. This has led to a variety of different abuses. For example, insurers are getting charged thousands of dollars for assessments that conclude there is no need for AC. They will pay for an initial assessment that says no AC is required; six months later, they will get another assessment that confirms once again that AC is not needed.

Some health practitioners are giving insurers a full report, along with a big bill, when all they should be sending is a Form 1. It should cost an insurer Cdn$63.72 for a Form 1, plus it should take approximately 1.5 hours of a practitioner’s time to complete it. The rate for chiropractors established by Ontario’s auto insurance regulator, FSCO, is Cdn$101.78 per hour. Therefore, bills for a chiropractic assessment should be around Cdn$250 — not the Cdn$1,000 invoices that Ontario auto insurers are receiving.

Under tort, if a plaintiff is exaggerating his or her injuries, insurers can investigate by obtaining a good statement, an independent medical opinion and, if necessary, surveillance. The tort system is much more understandable and transparent than today’s current accident benefits system. Under the SABS, there are so many different frauds coming at the insurer from so many different sources that insurers are suffering death by a thousand cuts.

If all the people who draft the legislation were required to work for at least one year handling no-fault claims, I can assure you that the SABS would be scrapped. We would return to modest OMPP-style payments coupled with tort, or to pure tort alone. After all, we do have a publicly funde d health care system.

The present system has fallen into disrepute and no amount of tinkering will fix it. Meaningful reform is required.

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If all the people who draft the legislation were required to work for at least one year handling no-fault claims, I can assure you that the SABS would be scrapped.