Support for injured motorists, if they can afford it
Published on June 3, 2022 by Matthew Forshaw
A recent decision of the Personal Injury Commission (“PIC”) has outlined a significant legislative flaw in NSW’s CTP scheme and rendered injured motorists powerless to overturn adverse decisions about their treatment made by insurers unless they have pockets deep enough to afford the treatment themselves.
In Obeid v AAI Ltd t/as AAMI [2022] NSWPICMP 76[1], the claimant was injured in a motor vehicle accident that occurred in March 2020. The insurer accepted that they insured the owner and driver of the other motor vehicle and therefore were liable to pay Mr Obeid any damages and/or statutory compensation entitlements, whilst also accepting that he had suffered a non-minor injury meaning that liability to make statutory payments extended beyond the 26-week period, as required by the Motor Accident Injuries Act 2017 (the “MAI Act”).
Mr Obeid’s treating specialist recommended an arthroscopy and rotator cuff repair of the accepted right shoulder injury, while his pain specialist recommended a pain management program which included diagnostic lumbar facet joint block and caudal epidural block.
The insurer denied these proposed treatments both at first instance and after internal review, though they did agree to pay some aspects of the pain management program.
As a result of the declinature, Mr Obeid filed Applications with the PIC for determination of the dispute.
The PIC referred the dispute to Medical Assessor Woo to determine whether either treatment related to the injury caused by the subject accident and, if so, if they are reasonable and necessary.
Following an examination, the PIC issued a medical assessment certificate in which Medical Assessor Woo found that Mr Obeid aggravated a pre-existing degenerative rotator cuff tear and sustained a soft tissue injury to the lumbar spine in the motor accident. The Medical Assessor otherwise concluded that neither of the treatments relate to the injury caused by the motor accident or were reasonable and necessary in the circumstances.
An application for referral to a review panel was made within the requisite timeframes and the President’s Delegate referred the dispute to the Review Panel as they were satisfied that there was reasonable cause to suspect that the medical assessment was incorrect in a material respect having regard to the particulars set out in the application.
Both parties made submissions to the Review Panel. Of most relevance, the insurer submitted that the application must be dismissed because the subject matter of the dispute was not a “medical assessment matter” for the purposes of Schedule 2 clause 2(b) of the MAI Act. They submitted that the matter in issue is the question of the insurer declining to fund proposed treatment and that a fair reading of those provisions concern treatment already “provided” to the claimant.
Unfortunately for injured motorists of NSW the Review Panel found that the dispute for the payment of future right shoulder surgery and future diagnostic blocks is not a medical assessment matter under the MAI Act. This is because a medical assessment matter is limited to “treatment and care provided to the injured person” (section 3.27(2)(b)) and by extension in section 3.24, to expenses incurred in providing treatment and care for the injured person.
The treatment has not been provided and no liability to pay for the treatment has been incurred. Accordingly, they found that the Medical Assessor and the Panel do not have the power to determine the dispute.
Worryingly, this decision effectively means that if the insurer denies approval for proposed treatment, then the dispute cannot be determined by the PIC, the only body an injured motorist would ordinarily have recourse to. This leaves them with the only course of action to pay for the treatment themselves, then have the dispute determined by the PIC after the fact. This would lead to a risk that they will not recover the expenses paid, as well as potentially provide immediate financial strain on the injured person. This is assuming that they can actually afford the treatment in the first place, which would often be unlikely in circumstances involving costly surgery.
The effect of Schedule 2 clause 2(b) of the MAI Act appears contrary to the intention that the government supposedly had when introducing the new CTP scheme in 2017. Indeed, the first object of the Act is “to encourage early and appropriate treatment and care to achieve optimum recovery of persons from injuries sustained in motor accidents and to maximise their return to work or other activities” (section 1.3(2)(a)). To deny an injured person access to review of an insurer’s decision to decline treatment completely discourages early and appropriate treatment and creates an inequitable playing field where the insurer can make adverse and potentially ill-informed decisions about treatment without any possible recourse against them, even when their decision making is flawed or unsound.
It is noted that the approach of the Review Panel in Obeid v AAI Ltd t/as AAMI has been adopted in a number of matters since the decision was made (AAI Limited t/as GIO v Smith [2022] NSWPICMP 108[2]; QBE Insurance (Australia) Limited v Ka’akah [2022] NSWPICMP 223)[3].
One would hope that the government acts to fix this power imbalance at the first possible opportunity to avoid an increased number of injured persons within the scheme from being prevented from accessing early and appropriate treatment.
