Pawson v Accident Compensation Corporation

IN THE DISTRICT COURT HELD AT WELLINGTON WELLINGTON REGISTRY [2011] NZACC 263 Al 63/09 UNDER The Accident Compensation Act 2001 AND IN THE MATTER of an appeal pursuant to s. 149 of the Act BETWEEN COLIN PAWSON Appellant AND ACCIDENT COMPENSATION CORPORATION Respondent HEARD at WELLINGTON on 23 May 2011 DATE OF THIS DECISION |4 September 2011 COUNSEL Ms E M Wilson for appellant Mr A D Barnett for ACC RESERVED DECISION OF JUDGE P F BARBER The issue [1] I am concerned with the correctness of a November 2008 ACC decision approving costs for non contracted elective surgery. That decision arises out of letters ACC wrote to the appellant on both 12 and 14 November 2008. Background [2] Mr. Pawson, the appellant, has cover for a back injury. On 11 October 2008 he sustained a lumbar disc prolapse while working under a boat. On 6 November 2008 an ACC 43 request was made to ACC by Mercy Ascot Private Hospital for the funding of non contracted elective surgery on the appellant. [3] The application identifies the date of surgery as 28 November 2008 at Mercy Hospital. Declarations are made and signed by the claimant/appellant and Mr Ferguson, the surgeon, that full information has been given to the appellant 2 concerning his options in regard to accessing elective surgery. With the request is a specialist assessment report and treatment plan describing the proposed surgery and medical history and noting, inter alia, that both ACC and the appellant's private insurer will receive the application for non contracted surgery. Attached was an elective surgery option form and the letter requires that this be signed before the surgery is undertaken. [4] Also, on 6 November 2008, the appellant signed an authority for John Miller Law to act as his counsel. Mr Barnett puts it that from this it can be inferred that the appellant saw his insurers on this date, because it is a standard condition of the insurer approving non-contract surgery that the claimant gives the insurer authority to issue appeal rights. [5] On 11 November 2008 Mr Pawson's case manager at ACC contacted him by telephone. In particular, the file record records inter alia "He [Mr Pawson] said he is having the surgery on the 28", if ACC don't pay he will be going to his Insurance coy. I said I would contact him by mobile when the decision is made and follow-up with a letter. I asked him details of his coy and who his doctor is ..." [6] Then by email, ACC advised that a decision would issue shortly. [7] On 12 November 2008 the case manager telephone Mr Pawson to discuss his surgery. The file record notes, inter alia, that the case manager asked Mr Pawson if he had a preferred provider and he indicated he did not and asked the case manager to choose one. Also, on 12 November 2008, ACC wrote to Mr Pawson advising it had approved an application to fund his treatment (at Mercy Ascot by Mr John Ferguson) and it will pay the full costs. On the same date ACC wrote to Mercy Ascot advising it had approved their surgery at a total cost of $4,165.64 (including GST) for 28 November 2008 with high priority. (8] Early on 14 November 2008, the ACC case manager telephoned Mr Pawson and advised him that the approval letter of 12 November 2008 was in error as it had not been noticed that the application had been for non-contracted surgery. The file record notes that Mr Pawson was told he may need to contact his insurance company for part payment or take the full payment option offered by ACC and have to wait for surgery. However, Mr Pawson was not keen to wait for the surgery on a contracted basis. That file record reads: Rang Colin to say a new approval letter was in post tonight, the previous letter was sent in error as CM failed to notice NON CONTRACTED service detail and therefore sent incorrect letter. I apologised to Colin for the error. Said he may need to contact his insurance coy for part-payment or take the full payment option by ACC and have to wait for surgery. He is not keen to do this and will fill in the form in the letter and give to his surgeon and contact his insurance company." (9] On 14 November 2008 ACC wrote to Mr Pawson approving the non contracted surgery sought for the appellant by Mr Ferguson, his "chosen provider", and advising it will make a contribution of $4, 165.64 and that the appellant "will have to fund the remaining cost of the surgery". This letter however also gives the option of fully funded contracted surgery, nominates John Ferguson at Mercy Ascot, but advises that the timing of the surgery may change. 3 [10] On 17 November 2008 Mr Pawson signed the ACC elective surgery choice form selecting Mr Ferguson to perform the surgery at Mercy Ascot. He also accepted that ACC would pay a $4, 165.64 contribution as full and final payment for this surgery and that he will fund the remaining costs of it. That form also spelt out the appellant's option of surgery 100% funded by ACC. [11] The surgery was undertaken on 28 November 2008. [12] A 20 November 2008 review application (seeking fully funded surgery) of the ACC decision of 14 November 2008 was received by ACC on 24 November 2008 and the Review was heard on 19 January 2009 by Reviewer L A Clark whose analysis was as follows: "Analysis The issue is whether ACC complied with Regulation 18. I have considered the submissions provided at the hearing. ACC's nomination of a provider ACC has nominated a provider. There is nothing in the regulations to prevent ACC from nominating Mr Pawson's surgeon. There is also nothing in the regulations to require any more of ACC than to make that nomination. ACC is not required to nominate another provider who may be able to perform the surgery 'more promptly'. That decision is completely out of ACC's control. I can find nothing in ACC's actions that could be considered to be 'subversive'. While John Miller Law made a number of submissions regarding the procedures adopted by private hospitals, there is no evidence of this. There is also no evidence that ACC has been complicit in this process even if that is what is happening. ACC has acted on a request from a surgeon to carry out non-contracted surgery. It has provided Mr Pawson with a decision on that request. It has also advised him of a further option in which ACC could fully fund the surgery. The regulation then requires a claimant to do something, either to decide to accept ACC's nominated provider, or choose their own provider. The important effect of Regulation 18 is that a claimant must be told that ACC would be liable to pay the full cost of surgery if it was performed by a nominated provider. Clearly, in Mr Pawson's case, he was told by ACC of his options regarding elective surgery. ACC provides a form for the claimant to take to the surgeon in order to obtain the fully funded option. I find that this is, in reality, all that ACC is required to do in Mr Pawson's case. There may well be a wider concern in the practice that appears to have developed when a claimant has private insurance. However, that may well be a contractual matter between ACC and its funded providers. That issue falls outside of the scope of this review, which is about Mr Pawson. In any event, despite submissions to the contrary, I am bound by the District Court in the cases of Ashley and Colthurst (58/08), where ACC's position has been fully supported by the Court. 4 Conclusion For the reasons above I am satisfied that ACC has complied with Regulation 18. Accordingly, I confirm its decision of 14 November 2008. The application for review is dismissed." Submissions for the Appellant [13] Ms Wilson put it that at paragraph 37 of Ashley & Colthurst v ACC, CIV-2009- 485-1669), Clifford J noted that communication between the ACC and the claimant was crucial. He stated: "[37] The essential question is whether the subsequent communications by the Corporation to Ms Ashley and Mrs Colthurst constitute a proper nomination in terms of regulation 18(2) and also discharge the Corporation's obligation under regulation 18(4). In my view, the answer to those questions is yes." [14] It is submitted for the appellant that in this present case the communication between claimant and ACC is unclear and misleading; and that the manner in which the options have been communicated to the applicant has confused and misled the applicant appellant, with the result that the appellant was not fully informed of his options. The Decision Letters [15] Ms Wilson submits for the appellant that the 14 November 2008 letter is confusing in light of the 12 November 2008 letter sent to Mr Pawson which approved full funding for the surgery. As this 14 November 2008 letter was sent to the appellant prior to the appellant indicating which option he wished to pursue, and which provider to pursue it with, it is submitted for the appellant that the opportunity for him to choose a provider was non-existent as one had already been selected for him. [16] This letter of 12 November 2008 was followed with the letter of 14 November 2008 which begins: "Surgery approved under regulation (part payment by ACC) This is what was requested by your specialist (chosen provider) and this has been approved by ACC." [17] It is submitted for the appellant that the wording of this opening paragraph suggests that the option for fully funded surgery is available, but was not requested by the specialist, and, further, has potentially not been approved. It was not requested by the appellant but there is no suggestion it is not an available option. [18] There was reference to paragraph 44 of Ashley and Colthurst which is set out below [19] Ms Wilson puts it that, in the present case, it appears that ACC had approved fully funded surgery to take place on 28 November 2008; that this is the same date which has been given as the treatment date for part funded surgery; and there is no indication as to why part-funded surgery was pursued in light of these circumstances. 5 However, the said file note of 14 November 2008 shows that the appellant did not wish to wait for fully-funded surgery to become available. [20] Counsel for the appellant submits that ACC has failed to properly comply with reg. 18 and so is liable to pay for fully funded surgery in this appeal; and the appellant seeks review costs where they were not awarded at review. Discussion [21] ACC is liable to pay for the costs of the elective contract surgery as it has approved that surgery. Accordingly, reg. 18(1) of the IPRC (Liability to Pay or Contribute to Cost of Treatment) Regulations 2003 applies. By reg. 18(2) ACC may nominate a provider to perform the surgery. By reg. 18(3) the claimant may accept the nominated provider or choose a provider. [22] By reg. 18(4), before the claimant decides whether to accept the nominated provider, ACC must tell him or her that it would be liable to pay the full costs of the surgery if it were to be performed by the nominated provider. [23] By reg. 18(6), if the claimant elects to have the surgery carried out by his or her chosen provider, then ACC's liability is limited to 60 percent of the amount it would be otherwise liable to pay for the surgery. [24] On 12 November 2008, ACC issued a decision that "approved an application to fund your treatment" and that it would pay the full costs of the surgery undertaken by Mr Ferguson at Mercy Ascot. At the same time the ACC advised Mercy Ascot by letter that it would meet costs of $4, 165.64 - which is not the fully funded figure but the 60 percent of costs figure. ACC's letter of 12 November 2008 to Mr Pawson was clearly an error as there had been no application by Mercy Ascot or the appellant to fully fund surgery on a contracted basis. The request (ACC 43) signed by both Mr Pawson and Mr Ferguson was for the partially funded non contract surgery. [25] ACC quickly recognised its error and spoke to Mr Pawson about it. He was told that, for contracted surgery, he may have to wait and he indicated he was not keen to do this so that he would contact his insurers. [26] On 14 November 2008 ACC issued a new decision which has been subject to review and now of this appeal. That 14 November 2008 decision nominates Mr Ferguson at Mercy Ascot to provide surgery under the elective surgery contract as ACC's nominated provider. This meets the requirements of reg. 18(2). [27] The letter of 14 November 2008 gives Mr Pawson the option of the non contracted surgery for which ACC will make a contribution of $4, 165.64, or the option of contracted surgery with Mr Ferguson under his elective surgery contract which will be fully funded by ACC. This meets the requirements of reg. 18(4). The letter of 14 November 2008 invited Mr Pawson to make an election between fully funded surgery and the partially funded surgery. Mr Pawson completed that election form on 17 November 2008 and chose the partially funded surgery agreeing that he would fund the remaining cost of the surgery. [28] Mr Barnett puts it that one can readily infer that the appellant's insurers were apprised of the position and those insurers, who would have assumed the rights of 6 the appellant, raised no issue with ACC before the appellant made his election on 17 November 2008. That seems likely [29] As Mr Barnett also puts it, the appellant submits that, in some way, the opportunity for the applicant to choose a provider was "non-existent" because one had already been selected; but that submission is inconsistent with both reg. 18 and the decisions of the High Court and District Court in Ashley and Colthurst. I agree with Mr Barnett that ACC must, and did, nominate a provider under contract, and this does not preclude the claimant/appellant choosing the same provider but on a non- contracted basis. The appellant was not deprived of any rights; nor could he have been confused at material times. [30] While there might be some awkwardness in both the "chosen provider" and the "nominated provider" being the same person, namely, Mr Ferguson at Mercy Ascot, that created no issue in this type of situation as was recognised by both the District Court and the High Court in Ashley and Colthurst v ACC. If providing the surgery under contract, Mr Ferguson at Mercy Ascot is ACC's "nominated provider". If he provides the surgery on a non-contracted basis, then he is the "chosen provider". ACC offered the surgery under contract, but Mr Pawson elected for surgery on a non- contracted basis. [31] ACC's 14 November 2008 decision letter is clear in providing the options for partially funded or fully funded surgery, and in nominating Mr Ferguson, at Mercy Ascot, under the contract as ACC's nominated provider. On 17 November 2008, the appellant made the election for partially funded non-contract surgery. [32] The appellant raises issues of timeliness and refers to Justice Clifford at [44] in Ashley and Colthurst having stated: "[44] In terms of the overall scheme of the legislation, there might perhaps be grounds for concern if there had been evidence that the Corporation was in a position to nominate providers to perform elective surgery, on a contracted basis, in a more timely fashion than had been indicated by the consultant surgeons at the time the ACC43 form was signed. There was, however, no evidence of that and I do not need to consider the possible implications of such a situation further." [33] The appellant says that "it appears" that the ACC approved fully funded surgery to take place on 28 November 2008, which was the same date as the part funded surgery, and states that "in light of these circumstances" there is no indication as to why part funded surgery was pursued. However, I agree with Mr Barnett that, by its letter of 12 November 2008, ACC at most approved the application to fund treatment. The application to ACC was for partially funded surgery and yet ACC said it would be fully funded. No date for the surgery was given in the approval. The letter was contradictory in that, on the one hand, it approved an application for partially funded surgery and yet, on the other hand, advised that the surgery would be fully funded. Obviously, the letter was in error which (error) was corrected by the letter of 14 November 2008. At no stage did ACC approve full payment of the cost of non- contracted surgery. [34] The 12 November 2008 ACC letter to the appellant was in error but, in any event, did not name the date for surgery. Mr Barnett submits it was not approval for surgery on 28 November 2008 and is not evidence that Mercy and/or Mr Ferguson 7 could and/or were willing to carry out contracted surgery on 28 November 2008. True, although there was a letter of 12 November 2008 from ACC to Mercy Ascot which referred to 28 November 2008 as the date of treatment and total cost as $4, 165.64 and was also headed "elected surgery approved". After two days it was explained to the appellant that contract surgery may be later. Then, on 17 November 2008 the appellant made his election for non-contract surgery and proceeded to surgery on that basis. [35] I agree that there is no evidence that ACC was in a position to nominate a provider for contract surgery on a more timely basis so that, as in Ashley and Colthurst, the issue of time does not arise [36] Also, the observation of Judge Clifford at [44] of Ashley and Colthurst is no more than just that, an observation and one which is unresolved in his mind. The possible concern he raises would only arise if there is evidence that surgery could have been done in a more timely fashion under contract. [37] In the course of oral submissions some new issues were raised. [38] Ms Wilson seemed to be putting it that the sequence of communications from ACC infers that, from the outset ACC, had decided that Mr Pawson's surgery was to be partly funded by it i.e. to be non contract surgery; and that ACC was, from the outset, committed to not giving the appellant a choice to elect contract surgery so that ACC could not possibly have observed reg. 18. I cannot see merit in that submission. My above reasoning shows that Mr Pawson carefully elected non contract surgery having clearly been given his options; nor was he in any way confused. [39] Obviously, ACC's error (presumably, made by the case manager) was to think that the appellant had applied for contract surgery at the outset when the appellant (presumably, on the advice of the surgeon at that point) had merely applied for non contract surgery. Certainly, the appellant had his options/rights well explained to him subsequently and in good time by ACC's case manager. There does not seem to have been any estoppel, unfairness, or detriment to the appellant in any way. Ms Wilson emphasises that while the appellant opted for the part funded surgery, he really had no choice as ACC had gone ahead and "virtually made the choice for him" as she put it. It seems to me that the evidence simply does not support that submission. [40] Regulation (4) is pivotal and it reads: "(4) Before the claimant decides whether to accept the nominated provider, the Corporation must tell the claimant that the Corporation would be liable to pay the full cost of the surgery if it was performed by the nominated provider." [41] In my view, there can be no doubt on the facts of this case that, before Mr Pawson accepted the surgeon, he was told that ACC would pay all costs if he waited for that surgeon to perform the surgery under the surgeon's/hospital's contract with ACC. Mr Pawson simply did not want to so wait. No doubt he was influenced in that decision by his having suitable medical insurance. If that type of procedure and outcome makes the insurer unhappy, then it should restructure the appropriate terms of its insurance cover, presumably, with a consequential lessening of premium. 8 [42] It seems to me that ACC has met its obligations under reg. 18(2) and (4); so that, by reg. 18(6), its liability was to fund 60% of its contract price. [43] Accordingly, this appeal is dismissed. Judge P F Barber 1 District Court Judge WELLINGTON Al 63-09.doc(aw)