Hakaraia-Hoani v Accident Compensation Corporation

IN THE DISTRICT COURT AT WELLINGTON DECISION No. 355/2004 UNDER The Injury Prevention, Rehabilitation and Compensation Act 2001 IN THE MATTER OF an appeal pursuant to section 149 of the Act (Appeal No. AI 366/03) BETWEEN CHARLOTTE HAKARAIA-HOANI Appellant AND ACCIDENT COMPENSATION CORPORATION Respondent Hearing: 6 May 2004 Appearances: John Miller for appellant Bruce Corkill for respondent Judgment: 16 November 2004 RESERVED JUDGMENT OF JUDGE D A ONGLEY [1] The issue in this case is whether the Corporation was entitled under cl 60 of the Accident Insurance Act 1998 to reject the initial assessment of a duly appointed independence allowance assessor and obtain instead a further assessment as a basis for assessing the degree of whole-person impairment. [2] In May 2001, the Appellant lodged a claim for a carpal tunnel injury that arose as a consequence of her employment as a photo-processor. In August 2002, she applied for an independence allowance. [3] On 27 August 2002 Dr Sarah Hartshorn of CRS Associates Ltd completed an assessment with a whole-person impairment rating of 76%. Dr Hartshorn reported that she used the AMA Guides to Evaluation of Permanent Impairment and followed this course: • 100% sensory deficit was assigned to each hand because of lack of sensation and severe pain preventing activity - converted to 45% upper extremity impairment for each upper limb. • Right hand impairment of 64% with right wrist impairment of 27% gives 74% upper extremity impairment for range of motion. • Combining those assessments gives 86% total upper extremity impairment for the right upper limb and converts to 52% whole person impairment. • A similar left limb calculation produced total left upper extremity impairment of 85% or whole person impairment of 51%. Combining the two gives a total whole-person impairment of 76% [4] On 16 September 2002 Dr Macky the Branch Medical Advisor referred back to Dr Hartshorn a technical question about the way that the tables were used. He noted that 76% WPI was close to the percentage impairment for bilateral amputation (79%) and maximum impairment. He asked if Dr Hartshorn could reconsider or discuss the assessment. He noted that: • The causalgia model seemed appropriate and 100% impairment reflected very restricted activity, but that a range of motion percentage seemed to duplicate the loss of activity due to joint restriction present only by virtue of the causalgia. • Argument that that the 100% pain/sensory change referring to causalgia in the region of the median nerve is doubtful. • A comparison with estimate loss of grip of median sensory/motor models might be useful. [5] Dr Hartshorn replied on 20 September 2002 that she had found this a complex case and had consulted the Guides extensively and also discussed the case with colleagues in view of the high impair rating she had reached. She stated that the impairment was rated as described by the section "Causalgia and Reflex Sympathetic Dystrophy" in the Guides which outline the steps including rating the loss of motion of each joint and combining it with the sensory deficit or pain according to the tables. She stated that the abnormal clinical findings were not confined to the median nerve distribution. She considered it unreasonable to restrict the assessment of impairment. She said the clinical findings were consistent and reproducible throughout her examination but slightly different from previous presentations and seemed at times incongruous. Because of the consistency of her clinical findings she found no ground to make any adjustment. Dr Hartshorn added that a way around the difficulty would be to have a further assessment to confirm reproducibility of clinical findings. [6] Dr Kevin Morris, Corporate Medical Advisor, considered the matter by Memorandum of 8 October 2002. He raised a question whether the clinical picture detailed in the report, relating to the Appellant, was appropriately regarded as "major causalgia" - which designated an extremely serious form of RSD, not evident in the present case. He said: The clinical picture detailed in the report does not seem to fit this description. Further, I note that the claimant is able to perform a number of activities of daily living, including it would seem, driving a car. I would therefore see that when using table 11 on page 48, that the grade that seems to most accurately reflect the description of the sensory deficit or pain would be grade 4, that is "Decreased sensibility with or without abnormal sensation or pain, which may prevent activity and/or minor causalgia. The grade 4 gives a range of sensory deficit of 61-80%. It would seem to me that this is the range that should be used rather than the grade 5 range of 81- 100%. I note that Dr Hartshorn has in fact used a sensory deficit figure of 100%. My reason for recommending that we do not accept this impairment rating comes back to the fact that bilateral amputation of the arms gives a whole person impairment of 79%. This impairment assessment report at 76% is, in my view, too high for an individual who is still able to drive a car. Dr Hartshorn has indicated that she is open to further discussion. She also makes the suggestion of a further assessment being done. I would leave it over to you, but I would recommend that this subject be raised again with Dr Hartshorn, and perhaps the option of obtaining an alternative assessment be taken up. [7] The Corporation then obtained a second assessment from Dr Blair Christian, also of CRS Associates. On 13 December 2002 Dr Christian reported that when asked to move her hands for examination Charlotte was unable to move her wrist or fingers at all, but Dr Christian noted that during conversation she was able to move her fingers to full extension and move her wrists very well. He specifically noted that in pulling off her elastic bandages she gripped the bandages between thumb and index finger and pulled them off. He reported that on examination there was significant discrepancy noted concerning power and range of motion. He stated that he was unwilling to rate any physical impairment of power or decreased range of movement because he did not feel that on formal examination he was able to establish any reliable impairment. That was because Charlotte's power and range of movement on formal examination significantly differed from that displayed when not being formally observed. [8] Dr Christian assessed WPI rating of 33% based on 18% WPI impairment for both right and left Carpal Tunnel Syndrome. The Corporation issued its decision letter on 15 April 2003 on the basis of Dr Christian's assessment of WPI 33% [9] The appellant applied for review of the decision. In an internal review memorandum of 30 May 2003 Dr Morris noted that Dr Christian's report clearly indicated a discrepancy between the examination findings on formal examination compared with observed movement and use of the hands in the informal setting. He concluded that it was therefore clearly inappropriate to base any impairment assessment upon formal examination which involved measurement of range of motion of the fingers or hand, as Dr Hartshorn had. He was of the view that Dr Christian had provided an impairment report in which he had detailed the basis for his findings, which related to changes due to median nerve dysfunction. [10] On review, the Reviewer was asked to consider a submission that the Corporation had no statutory authority to obtain a second assessment. As summarised in the Corporation's submissions on appeal, the Reviewer found: (a) Although clause 60 of Schedule 1 of the 1998 Act was "prescriptive on the obligations of ACC regarding the appointment of independence allowance assessments and the conduct of the assessment process" it was silent on matters relating to "peer review or auditing such assessments" (b) A common sense approach was necessary. (c) The AMA Guides themselves (page 2/6), noted that if there was disagreement about clinical findings, further medical evaluation might be necessary. (d) The AMA Guides were just that - "guides". (e) There being a fundamental flaw in Dr Hartshorn's report, it was appropriate to rely on Dr Christian's assessment, where there was no such flaw identified. Statutory provisions [11] The independence allowance provisions were contained in clauses 58 to 61 of Part IV Schedule 1 to the Accident Insurance Act 1998. The assessment was to be conducted once the claimant's condition stabilised, or otherwise after a year from the date of injury. Clause 60 provided the procedure for assessment: 60 Assessment of entitlement to independence allowance (1) The insurer must appoint, and pay, as many assessors as it considers necessary to do assessments under this clause. (2) An assessor assesses the insured's percentage of whole-person impairment arising from each claim that is referred to the assessor for assessment. (3) An assessor must do the assessment after the insurer receives a certificate under clause 59(1). (4) In doing an assessment under this clause, an assessor must— (a) Use the American Medical Association Guides to the Evaluation of Permanent Impairment (Fourth Edition) (subject to any regulations made under section 403(2)); and (b) Exclude from the assessment any impairment that does not result from the personal injury for which the insured lodged the claim for cover. (5) The insurer must notify the insured of - (a) The assessed degree of whole-person impairment; and (b) The rate of independence allowance payable, if any. (6) The insurer must pay the reasonable costs associated with the assessment. [12] In the 1998 Act there are provisions for a process of assessment for the different purposes of work capacity and independence allowance. The statutory assessment processes are not the same and there is argument in this appeal as to whether the independence allowance process is less stringent. [13] Mr Corkill for the respondent pointed to the use in cl 60 of the indefinite article in that subclause and in other references to "an assessor" and "an assessment" and submitted that none of the language used gives any indication that the respondent is limited in obtaining more than one assessment, if the circumstances require that to occur. Mr Miller submitted that if the outcome is to be dictated by an assessment it is not a matter for the insurer to choose between two different assessments. [14] The High Court considered the medical assessment process under the capacity for work provisions of the 1998 Act in Ramsay v ACC (High Court Dunedin, AP 412/14/02, 12 December 2002, John Hansen J). After analysing the provisions, Hansen J said: [52] …. Once the respondent determines to require an insured to undergo the process determining capacity for work, it seems to me, on the clear wording of the provision, both parties are bound by that process. The scheme of the Act does not envisage a process where the respondent gathers in evidence and reaches a decision by balancing that evidence. That role is given by the legislation to the medical assessor. The assessment can only be carried out by someone who is entitled to, pursuant to s98. Parliament has determined the proper way for such persons to consider all relevant matters is in terms of s99. They have not provided any other method for assessment, and it is certainly not open on the statutory provisions for the work capacity assessment to be disregarded, because the Court, or the respondent, preferred the contrary opinion of another non-qualified person under s98, who, in terms of the legislation, cannot make such an assessment. There will be situations where the respondent and the Court can go behind the assessment, but they will be quite limited and fall into the types of category referred to by Mr Hlavac. [15] The Court adopted the following principles: (a) That the Court will not readily interfere with occupational and medical assessments completed as part of the work capacity process. (b) Situations where the Court may interfere with such assessments will include where a diagnosis is shown to be flawed, or where the procedure adopted is shown to be defective. (c) In other cases the Court will require clear and cogent reasons to set aside an occupational or medical assessment completed as part of the work capacity process. [16] Mr Corkill submitted that the language in those provisions is more prescriptive and a less stringent approach is required for the independence allowance provisions. [17] Mr Miller submitted that other useful contrasting provisions are to be found in the Medical Misadventure Regulations 1992 (SR 1992/154) where the legislation made it clear that the medical misadventure committees were to assist the Corporation to make decisions (and see DK v ARCIC 90/95). He submitted the independence allowance provisions are more akin to the work capacity provisions considered in Ramsay. In an independence allowance assessment under cl 60 Schedule 1 it is the assessor who makes the assessment and in subclause 5 the insurer is simply required to notify the insured of (a) The assessed degree of whole person impairment; and (b) The rate of independence allowance payable if any." [18] Mr Miller submitted that there is no material difference between the principles to be applied under the WCAP provisions considered in Ramsay and these independence allowance assessment provisions. He submitted that it must follow that the Corporation has no power to reject an assessment and shop around for a better result, but should deal with any questions by the appeal process or by revision of the assessment under s73 of the Act. Mr Corkill pointed out that the Corporation does not have a right of appeal. The principal submission for the respondent was that the assessment process was not completed before the insurer looked for a further opinion. [19] The work capacity medical assessment provisions in the 1998 Act set out a process beginning with a written notice prescribed under s93. That was required because the process was potentially disentitling and there had to be a requirement to compel an insured to take part. Section 94 set out the requirement and purpose of separate occupational and medical assessments. Sections 96 and 97 prescribed the process for assessment and report. Sections 98 to 100 set out a similar process for the medical assessment and report. [20] In contrast, the independence allowance provisions under cl 60 of Schedule 1 were much shorter. That may simply be because there was no need to compel the insured person to engage, and secondly there was no occupational component. [21] The reasoning in Ramsay rested on the prescriptive nature of the statutory provisions, the step by step process that was set out in the Act, and particularly the careful specification of the qualifications of a medical practitioner eligible to make an assessment. [22] Clause 60(1) simply required the insurer to appoint and pay assessors. The assessor requires no particular qualification and need not even be a medical practitioner. The overriding provision is that the assessor must use the AMA Guides to Evaluation of Permanent Impairment (Fourth Edition). The insurer must then notify the claimant of the assessed degree of whole-person impairment. [23] The assessment was triggered by a medical certificate under s59 when there impairment resulting from the injury and either the insured's condition had stabilised or 52 weeks have passed since the injury. There was provision under cl 61(5) for the insured to initiate a further assessment if the impairment has increased. That could only be done once in any twelve month period. The insurer had a similar opportunity if the impairment had decreased, but only once in any five year period. There was no other provision for the insured to request a further assessment. Argument [24] Mr Corkill described the process used in this case as a conversation between medical experts, during which Dr Hartshorn herself suggested a further assessment could be obtained. Mr Corkill referred also to Chapter 2 of the Guides on Records and Reports, where there is a commentary on the process where two physicians evaluate a patient and produce different results. [25] Mr Miller submitted that under cl 60 there is no statutory authority for the Corporation to reject an assessment. The insurer simply had an obligation to notify. He submitted there would otherwise have been a similar statutory provision to the Medical Misadventure Regulations 1992 if the task of the insurer was to gather evidence and make a decision. He described the process that the insurer adopted as a "behind the scenes" altering of independence allowance assessments under the euphemism of "peer review", but it is submitted that it is completely unauthorised by the Act and any subsequent assessment is an invalid procedure and of no effect. [26] The first question here is whether the approach to cl 60 should be similar to the work capacity assessment, or whether the insurer was entitled to gather evidence and make a decision. I consider that the wording of cl 60 confines the part of the insurer to obtaining an assessment and notifying the insured of the assessed degree of whole-person impairment. But in the course of doing that the insurer is liable to run into difficulties as it did in the present case. It could not have been intended that the insurer should be bound by a wrong or flawed assessment [27] The text in Chapter 2 of the AMA Guides reads: If widely disparate evaluations occur, then the stability of the medical condition and the mater of permanent impairment would be in question. … When physicians follow the Guides to measure and report their impairment estimates, the persons who receive the evaluations may be held accountable for assessing the result in accordance with the Guides recommendations. Because issues of medical fact should have been settled by the stage in the process the recipients of the evaluations should not find it necessary to choose among conflicting opinions. By consulting the standardized medical evaluation protocols and reference table and reviewing the recommendations of the Guides, the recipient may verify whether or not all necessary information was collected. If it was, the correctness of the evaluation may be ascertained by comparing it with the Guides tables. If there is disagreement about the clinical findings, further medical evaluation may be necessary. The recipient should not give one inadequately supported medical evaluation greater weight than another. [28] The above passage approves further medical evaluation in the event of disagreement about the clinical findings, with the reservation that the insurer should not give one inadequately supported medical evaluation greater weight than another. Issues of medical fact should already have been settled. Assessors are expected to sort out questions of medical fact. Where, as in this case, two assessors have reached different clinical conclusions the insurer, by choosing between the two, is approving one clinical finding over the other. [29] There is a danger in permitting the insurer to chose where the reason for choosing one assessment over the other is not on the basis of the proper application of the Guides but by a preference for one clinical finding over the other. [30] The purpose of the cl 60 provisions is to produce an assessment in accordance with the Guides. Clause 60 is silent concerning the qualifications of assessor and the resolution of differences. The reason for that would seem to be because those are matters provided for in the Guides which are for the use of "physicians" or medical practitioners. The concise manner in which the clause is drafted suggests that what is required is the application of the Guides once a properly appointed assessor has acquired sufficient information from records and clinical evaluation. [31] Mr Corkill referred to Gibbons (351/99) and Kidd (52/01) in which these provisions were considered. In his judgment in Kidd, Judge Middleton thought that potentially, the Court could become involved in an argument as to whether or not an assessment had been properly made, when there were two assessments by duly appointed assessors, which were in conflict. But the Court was not required to do so in those cases. It is unlikely that Parliament would have intended that the Court should resolve questions of conflicting clinical findings if there is already a process in the Guides for that to be done. [32] Mr Corkill submitted that he issue is to be approached on the basis that if the assessment was wrong, then the insurer was at liberty to proceed on a basis which is right. He submitted that after careful analysis of the first assessment, it was evident that the results obtained from formal examination, which involved formal measurement, conflicted with observed movement and use of the hands in an informal setting. This is where clinical judgment comes in. Dr Christian concluded that it would be wrong to utilise "formal" measurement, when that process was not recording the reality of the appellant's ability to use her hands. Dr Hartshorn herself, in her report of 20 September 2002, knew that the clinical findings were "incongruous with documented levels of functioning in day to day life". This included the ability to use hands for such a function as driving. [33] The problem with that argument is that it concerns conflicting clinical judgment. I accept Mr Miller's submission that cl 60 does not authorise an evidence gathering approach and the insurer was obliged to attempt to obtain an assessment in which the appropriately appointed assessors settled the clinical questions. I do not think that the insurer was obliged to accept the first assessment uncritically. What went wrong here is that the insurer decided to make a choice in consultation with its own Medical Advisors who were not acting as assessors appointed under cl 60. [34] I consider that the proper course was for the insurer to facilitate an assessment, including enabling a process of consultation between assessors in order to produce consensus. In doing that, it was not necessary for the insurer to adopt the first assessment, but it was not appropriate for the insurer to chose between assessments without an objective measure for choice. [35] In my view the insurer should have requested the two assessors to confer and attempt to agree on an assessment. If they had continued to disagree it may have been necessary to start the process again, but that situation did not arise. It is possible that the Corporation might eventually have had to reject one of the assessments on the basis that the clinical findings were wrong. That is what happened here, but the required process of obtaining an assessment was short- circuited in favour of choosing between two different assessments. [36] In this case I consider that the insurer did not comply with cl 60. The appeal is allowed, the Review decision is quashed and the matter is referred back to the Corporation to obtain an assessment. The manner in which that should now be done may be complicated by the passage of time or questions concerning the transitional provisions or choice of assessors. Leave is reserved therefore in case any direction is required under s161(2)(b) of the Injury Prevention, Rehabilitation, and Compensation Act 2001. [37] The appellant will have costs of $1000. Signed at Wellington on 16 November 2004 at 3.00 pm Judge D A Ongley District Court Judge