Ferawana v State Farm Mutual Automobile Insurance Co, 2016 CarswellOnt 14392

If an insurer fails to comply with the notice requirements at section 38(8) of the SABS, the relief in section 38(11) is mandatory and the insurer is prohibited from making a MIG determination on the applicant’s claim.

Heard May 4-8, 2015 | Full Decision [Document Bank]

SYNOPSIS

The notice requirements at section 38(8) of the Statutory Accident Benefits Schedule are mandatory. An insurer’s failure to comply with same triggers the relief set out at section 38(11), namely, (1) the insurer is prohibited from taking the position that the insured has an impairment to which the MIG applies, and (2) the insurer must pay for all goods, services, assessments and examinations for the period starting on the 11th business day after the day the insurer receives the application until the day the insurer gives notice described in s. 38(8). An insurer that breaches a procedural obligation with respect to one treatment plan is barred from making a MIG determination on all treatment plans.

SUMMARY

The Applicant submitted a treatment plan for a therapy ball. State Farm ticked the box stating it would not pay and faxed it back within the 10 day deadline, but did not give any reasons for refusing to pay until approximately 2 months later. It therefore failed to meet its procedural obligations pursuant to section 38(8) of the Statutory Accident Benefits Schedule, which states:

38(8) Within 10 business days after it receives the treatment and assessment plan, the insurer shall give the insured person a notice that identifies the goods, services, assessments and examinations described in the treatment and assessment plan that the insurer agrees to pay for, any the insurer does not agree to pay for and the medical reasons and all of the other reasons why the insurer considers any goods, services, assessments and examinations, or the proposed costs of them, not to be reasonable and necessary.  O. Reg. 34/10, s. 38 (8); O. Reg. 14/13, s. 5.

On the basis of this breach of section 38(8), the Applicant sought relief pursuant to section 38(11), which states:

38(11) If the insurer fails to give a notice in accordance with subsection (8) in connection with a treatment and assessment plan, the following rules apply:

  1. The insurer is prohibited from taking the position that the insured person has an impairment to which the Minor Injury Guideline applies.

  2. The insurer shall pay for all goods, services, assessments and examinations described in the treatment and assessment plan that relate to the period starting on the 11th business day after the day the insurer received the application and ending on the day the insurer gives a notice described in subsection (8).  O. Reg. 34/10, s. 38 (11).

Member Stramwasser found that s. 38(11) is mandatory and she had no jurisdiction to carve out exceptions. The insurer failed to give proper notice pursuant to s. 38(8). The therapy ball related to the time period set out in s. 38(11) as it could have been used for treatment at any point after the 11th business day.  There was no need to consider whether the therapy ball was reasonable and necessary. It was payable due to the procedural breach.

Furthermore, because State Farm failed to meet its procedural obligations at s. 38(8) with respect to the therapy ball treatment plan, it was now prohibited from taking the position that the MIG applies to the applicant’s claim.  The prohibition applies to the whole claim and not just the treatment plan in dispute. An insurer that breaches a procedural obligation with respect to one treatment plan is barred from making a MIG determination on all treatment plans.

Read the full decision on the OTLA Document Bank
Reproduced by permission of Thomson Reuters Canada Limited.
Joanna Sweet
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