Fees in the Ontario No-Fault Regime: A Broken System

The recent Division Court decision of Malitskiy v Unica Insurance Inc, 2021 ONSC 4603 has had significant negative ramifications for motor vehicle accident victims in Ontario.

In this decision, the Divisional Court ruled that for accidents that occurred prior to April 14, 2018, no-fault insurance companies only have to pay the maximum hourly rates set out in the Form 1: Assessment of Attendant Care Needs (“Form 1”). The Form 1 hourly rates in this case are based upon the Superintendent’s Guideline No. 03/10, where it’s stated that insurers do not need to pay any hourly attendant care expenses that exceed the maximum hourly rates outlined in the guideline, which are as follows:

  • Level 1: $13.19
  • Level 2: $10.25
  • Level 3: $19.35.

The Superintendent’s Guideline No. 01/18 was subsequently implemented and is applicable to accidents that occurred after April 14, 2018. The maximum hourly rates per this guideline are as follows:

  • Level 1: $14.90
  • Level 2: $14.00
  • Level 3: $21.11

This is a far cry from the $30.00 to $35.00 per hour most PSWs in Ontario charge in accordance with the market rate. In addition, minimum wage in Ontario was increased to $15.00 on January 1, 2022. Are PSWs seriously expected to provide services at a rate under minimum wage?

Superintendent’s Guideline No. 01/18 also states that “[i]nsurers are not prohibited from paying above the maximum hourly rates established in this Guideline.” Yet anyone waiting for insurance companies to pay more money on the basis of pure benevolence is going to be waiting rather long time.    Prior to Malitskiy, the traditional industry approach had been that insurers do not need to pay more than the gross monthly amount stated in the applicable Form 1, which is calculated based on the maximum hourly rates outlined in the applicable guideline. So long as the fees charged by the PSW were reasonable and didn’t exceed the gross monthly Form 1 amount, insurance companies would pay for incurred PSW services –

even if the hourly rates charged by a PSW exceeded the maximum hourly rate in the guideline.   

For example, say a claimant’s gross monthly amount per the Form 1 was $2,000.00. The occupational therapist calculated this gross monthly amount by costing out services based on the maximum hourly rates set out in the guideline (ranging from $14.00 to $21.11). The sum of services based on these hourly rates totalled $2,000.00 per month. The claimant then incurred attendant care services based on the market rate, at $30.00 per hour, for a total of $1,950.00 that month. The insurance company paid the bill for $1,950.00 given that the PSW services did not exceed the gross monthly Form 1 amount of $2,000.00.

Given the above, confusion naturally ensued following the release of Guideline No. 01/18. Did insurance companies now only have to pay for PSW services charged at the maximum hourly rates stated in the guideline? Or did they still need to pay up to the gross monthly amount as outlined in the Form 1 even if the PSW charged a higher hourly amount based on the going market rate?   Given this confusion, FSCO issued a clarification by way of Bulletin No. A-03/18 which came into effect on April 14, 2018. It states that “[p]revious guidelines could be interpreted to strictly apply the maximum hourly rates as the maximum payable for attendant care services, rather than using the hourly rates to calculate a monthly benefit as was originally intended [emphasis added].”

It is clear from Bulletin No. A-03/18 that the maximum hourly rates in the guideline are only to be used to calculate a claimant’s gross monthly attendant care entitlement in the Form 1. It does not mean that an insurance company only has to pay the maximum hourly rates stated in the guideline. An insured person is entitled to payment of attendant care benefits at an hourly rate higher those outlined in the guideline so long as a) the rate is reasonable and necessary and b) the total amount of services provided every month doesn’t exceed the gross monthly attendant care entitlement per the Form 1. 

Yet despite this clarifying bulletin and the fact that Malitskiy only applies to accidents that occurred before April 14, 2018, many insurance companies have started to use Malitskiy to take the position that they only have to pay the maximum hourly rates outlined in the guideline – even in cases where the accident occurred after April 14, 2018.

The insurance companies argue that per Malitskiy, they are not on the hook for paying any rate higher than the hourly guideline rate for PSW services even if the monthly PSW bill comes in at or under the gross Form 1 amount. When claims adjusters are confronted with the fact that their reasoning is based on an improper interpretation of Malitskiy, their only response is that company policy restricts them to only paying the maximum hourly rates of $14.00 to $21.11 per hour per the guideline.

As a result, injured persons are going without attendant care services entirely. Most PSWs cannot afford to provide services below minimum wage – nor should they have to. While a small portion of the population may be lucky enough to be able to fund the difference between the guideline hourly rate and the market rate out of pocket, the majority of the population can’t afford to fund the difference. This means that they receive zero attendant care as a result.

The Divisional Court’s rationale for the difference between the guideline hourly rate and the market rate is that Ontario only has a partial – not a full – no-fault insurance scheme. It argues that the tort regime and the no-fault regime are meant to work together to fully compensate the injured person.

But what about those who don’t have a valid tort claim with their only recourse being the no-fault scheme, such as those who are at fault for the accident but are still injured? Even if one does have a valid tort claim, the plaintiff can only claim past out-of-pocket expenses that they actually incurred. If the plaintiff can’t afford to pay the difference between the guideline rate and the market rate for attendant care up front, then they can’t claim attendant care as past expense incurred in a lawsuit.

As such, we have ended up with a system neither the no-fault insurer nor the tort defendant have to pay for any of the accident victim’s attendant care needs prior to trial. The Divisional Court’s logic just doesn’t make sense.

In addition to fees for attendant care services, significant problems exist with the amounts medical practitioners in Ontario are allowed to charge no-fault insurers for treatment rendered to persons injured in motor vehicle accidents.

The maximum hourly fees medical practitioners are allowed to charge no-fault insurers is dictated by the Superintendent’s Guideline No. 3/14: Professional Service Guidelines. These rates have not been updated since 2014.

Since the pandemic, demand for psychologists has increased exponentially, resulting in significant wait times to see a psychologist. Why would a psychologist with an already over-burdened caseload turn away a client that will pay their full hourly rate in favour of treating an accident victim that will result in loss of $50.00 to $100.00 per session (plus bring with them all the red tape associated with billing through the insurer’s invoice system, HCAI)? In my own practice I’ve repeatedly been told by those psychologists I’ve sent clients to for years that they are no longer able to treat those reliant on no-fault funding as it’s no longer financially feasible for them.

The effects of the pandemic and the cost of inflation have impacted us all and the no-fault regime is not immune.  

This issue isn’t just limited to psychologists. For instance, the guideline only allows massage therapists to claim a maximum of $58.19 per hour, whereas most massage therapists charge a market rate of at least $80.00 per hour. In addition, registered nurses are only able to charge $91.43 per hour under the guideline. Given the shortage of nurses associated with the pandemic, registered nurses are much more in demand and facing higher levels of burnout than ever before. It doesn’t make sense for them to provide services at a reduced rate through the no-fault system when they can easily earn more for there efforts elsewhere.

All in all, it is clear that the fee structures in our no-fault system in Ontario are outdated and long overdue for an update. To be effective, maximum guideline rates must be regularly updated to keep up with market rates and inflation. Without it, the no-fault system will fail to do that which it was specifically designed for: to ensure that accident victims receive appropriate care to help them recover from the injuries they sustained in a motor vehicle accident in exchange for premiums paid.  

The system through which injured persons must navigate in Ontario has utterly failed to adapt with the times. It continues to develop on a trajectory that highly favours the insurance industry to the detriment of Ontarians injured in motor vehicle accidents.  Malitskiy has served to provide the insurer with yet another weapon in its already-inflated arsenal.

Once again, injured persons in Ontario have received the short end of the stick.

Written by

Heather Colman is an associate lawyer at Greg Monforton and Partners in Windsor, Ontario practicing exclusively in plaintiff-side personal injury litigation. She has a B.A. (Honours) and J.D. from the University of Windsor and is a member of the Ontario Trial Lawyers Association.