Robertson v Accident Rehabilitation and Compensation Insurance Corporation

Decision No. 15 /95 IN THE DISTRICT COURT DCA No. 138/ 94 HELD AT AUCKLAND UNDER The Accident Rehabilitation and Compensation Insurance Act 1992 AND 39-94-0262 IN THE MATTER of an appeal pursuant to Section 91 of the Act BETWEEN L.D. ROBERTSON APPELLANT AND THE ACCIDENT REHABILITATION AND COMPENSATION INSURANCE CORPORATION RESPONDENT Held at Auckland on: 28 October 1994 Date of Decision: 21 February 1995 Counsel: P.J. Horrocks for the appellant A.D. Barnett for the respondent RESERVED DECISION OF JUDGE J.H. LOVELL-SMITH The issue in this appeal is the Corporation's decision, upheld in review, declining to meet the cost of specialist fees and private hospital fees on the grounds that no prior approval had been obtained for the treatment. 2. On 21 July 1993, the appellant dropped a concrete slab on her left foot. She obtained medical treatment for that injury from the Onehunga Accident and Emergency Centre and a claim was lodged with the Corporation for cover and treatment expenses on 21 July 1993. The Corporation wrote to the appellant on 23 July 1993, advising that it accepted cover as follows:- "We have considered your application for cover which was submitted through your doctor on your behalf. We accept that you have cover for the following injury: fracture left foot. ... If in future you require compensation for this injury, you will need to complete an application form before payment can be considered. Specific forms for this are available from any branch office. Also, client liaison officers are available at each branch office to provide any advice which you may require. If there is anything which you claim for which cannot be paid in full, we will write to you and explain why you are not entitled to the full amount claimed. ..." The appellant continued to receive medical treatment for the injury. As the injury was failing to respond to treatment, on 4 August 1993 her general practitioner referred her urgently to Mr Sumner a general surgeon. The appellant saw Mr Sumner the same day, and was immediately admitted at his request and instructions to the Mercy Hospital at Auckland, and within three hours surgery was carried out to "debride" and "evacuate" an infected haematoma on her left foot. In his letter of 22 December 1993 Mr Sumner described the admission as "urgent". In his report of 22 December 1993 as follows:- 3. "I wish to confirm that I saw Mrs Robertson first on 4 August 1993, having been referred by her general practitioner ... She had a history of having dropped concrete on her left foot some weeks earlier and her foot had subsequently become swollen and tender. It was being reviewed regularly by Dr McNichol, when suddenly her symptoms became progressive. On examination on 4 August, 1993 the left foot was very swollen, red and there was a large area of impending skin death over the top of the left foot. It seemed to me that this lady had an infected haematoma and with the impending skin loss it was obviously mandatory that we get on and debride this and evacuate the infected haematoma. For this she required urgent hospital admission and underwent surgery in the afternoon. At operation the dead skin was removed and the haematoma evacuated. ... In my opinion there is no doubt that this lesion was the direct consequence of the accident that she had sustained to her left foot earlier. ACC was not sought at the time because of the urgency of the situation." On 25 August 1993 the appellant submitted to the Corporation invoices and receipts in respect of her treatment. On 6 September 1993 the Corporation declined to meet the cost of the treatment on the basis that no prior approval had been sought. The Corporation's decision was based on the Private Hospital Costs Regulations. 1990 when in fact these Regulations had been repealed and replaced by the Supplementary Treatment Costs Regulations (No. 2) 1993/246, effective from 1 July 1993. 4. The emergency surgery was accepted by all parties to relate to her personal injury and that it was necessary for her treatment of her condition and "... for the due restoration of the claimant to her principal economic activity ...". The appellant was off work and received payment from the Corporation for earnings related compensation. The appellant applied for a review of the Corporation's decision. A hearing took place before the Review Officer on 13 January 1994 and the decision of the Review Officer dated 7 June 1994 upheld the Corporation's decision. Mr Horrocks submitted first that the Review Officer's interpretation of the respondent's letter of 23 July 1993 was "incorrect" and that the Specialists Costs Regulations (No. 2) (1990/223) and the Supplementary Treatment Cost Regulations (No. 2) 1993 (1993/246) should be read together. He contended that there was a clear intention in the Regulations that it is not necessary in all cases for the prior approval of the Corporation to be obtained. In particular he relied on Regulation 5(2) of the Treatment Cost Regulations which stated:- "Nothing in this Regulation shall apply in respect of any treatment that is discovered to be necessary to be performed, and is performed, during the course of any treatment approved under any Regulations referred to in sub-paragraph 1(a) of this Regulation." He also referred to Regulation 11(4) of the Specialists Costs Regulations (No. 2) 1990:- 5. "Nothing in this Regulation shall apply in respect of: (b) Any procedure that is discovered to be necessary to perform, and is performed, during the course of any approved treatments." He further submitted that as long as the original treatment had been approved, then notwithstanding that the further treatment is part of the Treatment Cost Regulations and the Specialists Costs Regulations, then that treatment or procedure is still covered by the provisions of the Act and the Corporation is required to pay out the costs of the treatment or procedure provided however the treatment or procedure; "... is discovered to be necessary to perform ...". Mr Horrocks submitted that the procedure was necessary to be performed and was performed as a result of the original treatment provided. He relied on the report from the general practitioner and from Mr Sumner. He contended that the procedure provided by the anaesthetist and by the specialist in the treatment in the hospital is clearly within the ambit of the Regulations and the Corporation is not barred from making payment. If this was not the intention of the Legislature, Mr Horrocks submitted" at the time of the approval of the Regulations, then it would seem inappropriate for the exemptions to be included. Mr Barnett submitted that the payment for the treatments are respectively covered by the Specialists Costs Regulations, the Anaesthetists 6. Costs Regulations and the Supplementary Treatment Costs Regulations. The starting point was to consider the Specialists Costs Regulations as the entitlement to licensed hospital costs and the costs of the anaesthetic follow if the costs of the specialists are approved. Clause 11 of the Specialists Costs Regulations (No. 2) 1990 provides in part:- '(1) The Corporation shall not make any payment in respect of any procedure specified in Part 11 of the Schedule to these Regulations unless - (a) The treatment is provided - ( i) In a licensed hospital; or ( ii) ... and, (b) The prior approval of the Corporation to the performance of the procedure has been obtained. ... (4) Nothing in this Regulation shall apply in respect of ( a) ... (b) Any procedure that is discovered to be necessary to perform, and is performed, during the course of any approval treatment." The procedure undergone by the appellant is provided for in Part II of the Schedule, namely,:- 7. "Haematoma, abscess or other infection 14 large-incision and drainage (general anaesthetic)." Accordingly, it was Mr Barnett's submission that the appellant required prior approval for the surgery before the Regulations authorised the payments of costs. He relied on numerous decisions before the Accident Compensation Appeal Authority and the District Court which established that the Regulations admit no discretion and if prior approval is not obtained, payment cannot be made. Mr Barnett referred to Dravitski 20/94 and Wellwood 36/94. Mr Barnett submitted that the same considerations applied to the anaesthetist's costs pursuant to the Anaesthetists Cost Regulations 1990. Clause 10 provides in part:- "( i) The Corporation shall not make any payment in respect of any treatment specified in the Schedule to these Regulations unless - (a) The treatment is provided as a necessary adjunct to treatment that has been approved under the Accident Compensation (Specialists Costs) Regulations (No. 2) 1990 ..." The surgical procedure having not been approved means that the cost of the anaesthetic cannot be met either. It follows therefore that the same applies in respect of the private hospital costs which are covered by the Supplementary Treatment Cost Regulations (No. 2) 1993 which applied from 1 July 1993. Clause 5(2) of the Supplementary Treatment Cost Regulations reads:- 8. "Nothing in this Regulation shall apply in respect of any treatment that is discovered to be necessary to perform, and is performed, during the course of any treatment approved under any Regulations referred to in sub-clause (1)(a) of this Regulation.' Clause 14(4)(b) of the Specialists Costs Regulations is in similar terms. Mr Barnett submitted that the argument that the Corporation's letter of 23 July 1993 accepting cover and contending that Clause 5(2) makes it unnecessary to obtain prior approval to the particular treatment that had been undergone is misconceived. The acceptance of cover under the Act does not automatically entitle a claimant to any of the benefits available under the Act or Regulations, as a claimant must first satisfy the requirements that give rise to the entitlement. In the case of treatment generally there are numerous requirements in the Regulations that must be met before the entitlement is established. Where the proposed treatment is to be undertaken in a licensed hospital there are additional requirements. Clause 11(1) of the Specialists Costs Regulations requires that the Corporation must first give its prior approval to the performance of the procedure. Clause 11(2) provides that no approval shall be given unless the treatment is necessary for the due restoration of the patient to his or her principal economic activity. Clause 11(3) also provides. that no prior approval shall be given unless further requirements are met. The "approved treatment" referred to in Clause 11(4)(b) of the Specialists Costs Regulations clearly refers to the prior approval given pursuant to Clause 11(2) or (3). The approved treatment referred to in Clause 9. 5(2) of the Supplementary Treatment Cost Regulations and Clause 10(3) of the Anaesthetists Costs Regulations is the "treatment approved under any Regulations ...", namely, in this case the prior approval given under the Specialists Costs Regulations. The purpose of Clause 11(4)(b) and its counterpart in the Supplementary Treatment Cost Regulations and Anaesthetists Costs Regulations is to meet the situation when, "during the course" of undergoing some treatment for which prior approval has been given, it is found to be necessary to carry out some other treatment. In that circumstance it would be unrealistic to require that the approval must first be obtained. Accordingly, the treatment can proceed and be paid for without that prior approval. I agree with the submission of Mr Barnett that the regulations admit no discretion. The appeal is dismissed. There will be no order as to costs. (Jane H. Lovell-Smith) District Court Judge