Joughin v Accident Rehabilitation and Compensation Insurance Corporation

IN THE DISTRICT COURT Decision No. 120/95 HELD AT TAURANGA IN THE MATTER of The Accident Rehabilitation and Compensation Insurance Act 1992 AND IN THE MATTER of an Appeal pursuant to Section 91 of the Act BETWEEN MARGARET JOY JOUGHIN 54/94/ 2100. Appellant (Appeal No. DCA 243/94) AND ACCIDENT REHABILITATION AND COMPENSATION INSURANCE CORPORATION a body corporate duly constituted under the provisions of the said Act Respondent HEARD on the 2nd day of August 1995 APPEARANCES Mr N Collis for appellant Mr A E Howman for respondent DECISION OF JUDGE D A ONGLEY This appeal concerns a question of interpretation of Reg 9 Accident Rehabilitation and Compensation Insurance (Dentists Costs) Regulations (No. 2) 1990 SR 1990/238. The appellant injured her jaw and foot in a car accident on 10 August 1979. The Corporation met some costs of treatment to her teeth. On 14 July 1993 Dr J Edwards, oral and maxillofacial surgeon, wrote to the Corporation outlining proposed treatment by inserting five or six left lower anterior implants to bring the appellant's upper anterior teeth into function and lessen the load on her left lower teeth. An accompanying note from the appellant's dentist stated: - 2- "With Mrs Joughin's present condition she will be facing the rest of her days with major problems in the area of eating, speech and social interaction and no doubt health problems related to her inability to digest her food properly. She needs full oral rehabilitation. Our treatment would be to retain the present lower teeth 36,37 via root canal treatments, cores and full crowns. These are necessary for the stability of the occlusion. John Edwards, the Oral Surgeon will place up to five titanium fixtures upon which I will fabricate an acrylic prosthesis equivalent to 10 - 11 units depending on the fixture placement. Her lower jaw will be permanently restored. In treating her lower jaw we must also treat the upper jaw to establish an optimal occlusion and protect the remaining tooth structure. I propose full crowns for the remaining upper teeth 1 1, 21 - 27 (8 units) as part of the treatment to restore her normal function." The Corporation agreed to pay $7,910.30 towards the cost of treatment pursuant to the Dentists Costs Regulations 1990 (SR 1990/239) for an 1 1 unit bridge and 8 crowns. Dr Edwards' treatment fell under the Dental Specialists Costs Regulations (SR 1990/238). The schedule item states: "53 Implants (titanium) 937.15." It is qualified by r 9 which states:. "9. More than one procedure during an operation - (1) Where 2 or more separate procedures are performed during one operation, the Corporation shall pay - (a) The full costs that it is required to pay in respect of the most expensive of the treatments provided; and (b) Fifty percent of the costs that it would otherwise be required to pay in respect of the next most expensive treatment; and (c) Twenty-five percent of the costs that it would otherwise be required to pay in respect of any other treatments provided. (2) Where one procedure forms part of a more comprehensive procedure performed during the same operation the Corporation shall pay only the full costs that it is required to pay in respect of the treatment that is the more comprehensive procedure." The Corporation applied r 9 and approved payment of $2,360.88. It refused to pay the full amount for each implant, which would have amounted to $5,622.90. Mr Edwards estimated the full cost including follow up care as $7,000. He informed the Corporation that the cost of materials alone amounted to $3,064.00 for the proposed six implants. He said that the insertion of six implants takes almost six times as long as the insertion of one and there is no practical reason for the abatement of the fee when a number of implants are done. There is only a slight saving in a one-off hireage fee of $350 for the equipment required to insert the implants. - 3 - The appellant's argument was directed to the meaning of "separate procedures" in r 9. Mr Collis submitted that "Implants titanium" in the schedule is referred to in the regulations as an "item" not as a procedure, so that a number of implants would comprise separate items but need not be separate procedures. The regulations appear to regard "procedure" as the broader term, capable of encompassing more than one item. He suggested that the intention of the regulations might be that an example of "procedure" may be the generic headings in the schedule, for example 'Reconstruction of facial injuries" which is used to cover items 47 to 54 inclusive. Alternatively "Implants" might constitute a procedure, but one implant is only an item. Mr Collis referred to r 11 in aid of interpreting the meaning that the drafter had given to the words "procedure" and "item". In my view the search for a discrete meaning for each of those terms is in the end unproductive as to the meaning or intent of the regulations. The natural meaning of an "item" is one of the separately numbered entries specified in the schedule. "Procedure" is an expression that has more connection with a surgical process adopted by an oral surgeon in the course of treatment. A procedure is not constrained by the divisions used in the schedule and it might conceivably encompass a number of items or only one item. That is where the ambiguity lies. Mr Collis says that if it can encompass a number of items it can encompass all the implants inserted and there is then only one procedure so that r 9 does not apply. Reg 9(2) casts some light on the meaning of "procedure" intended in the regulations because it uses the phrase "Where one procedure forms part of a more comprehensive procedure performed during the same operation...". It is thus a flexible term capable of meaning a comprehensive procedure used in an operation or a subdivision of a comprehensive procedure. When it has the latter meaning it may be equivalent to an "item" in the schedule. The Corporation does not seek a literal interpretation of Item 53 whereby the Corporation would pay only $937.15 regardless of the number of titanium implants performed in one operation. Mr Howman submitted that "Implants (titanium) - 937.15" represents the costs payable by Corporation for one implant procedure and that r 9 is intended to deal with the general cost saving achieved by performing one implant procedure. He referred to a pattern apparent in the regulations evincing an intention of modifying the cost per unit when multiple procedures are performed. As an illustration, there appears in the schedule under "Extrusion - subgingival tooth fracture": "*73 1 tooth 812.80 *74 2 teeth 908.45 *75 Additional teeth (per tooth) 47.80" Mr Howman submitted that "procedure" and "treatment" seem to be used interchangeably in r 9; that the scheme of the regulations reflects a policy of abatements where there are multiple procedures during one operation; that a literal interpretation which restricts the payment to no more than $937.15 is not appropriate and inconsistent with r 9; and that the regulations contemplate that each item is a "procedure" or a "treatment". He submitted that "separate procedure" in r 9(1) means procedures able to be isolated, that is to say a separate process but not - 4 - a different process, so that a series of implants in one operation are separate processes. I accept that the natural meaning of the regulations is best reflected by the approach described by counsel for the respondent. The words of r 9 would be strained either by limiting their meaning to separately described procedures, or otherwise by regarding any number of implants as constituting no more than one procedure. The plain intention of the regulation is to compensate at a reduced rate where some economy is achieved by performing more than one item or procedure at the same time. I consider there is no basis for drawing a distinction between treatments, items or procedures for the purpose of the application of r 9. Distinctions can be drawn by adopting a semantic approach or by seeking to build a hierarchy of expressions of which an "item" is the smallest element, but such an approach sidesteps the clear intention in the regulations of a reducing calculation when procedures or items are performed in the same operation. That result is not without problems. There is a potential conflict between r 9 and the specific reductions contained in groups of items such as items 73 to 75 mentioned above. There is also a difficulty, when the separate procedures have the same schedule cost, where the wording of r 9(1)(b) refers to "the most expensive of the treatments provided". In cases such as the present none will be "the most expensive" or "the next most expensive" and those words have to be given a fair large and liberal meaning to include a series of costs each of the same sum. Finally there is injustice to a claimant where the actual cost saving is non existent or significantly less than the adjustments in r 9. Such an injustice occurs in this case where the procedure is essential for the appellant's health but she is subjected to arbitrary reductions in compensation. Regulation 9 cannot be anything but arbitrary because it is evident that the costs of materials used differs between procedures. I recommend that the Corporation should now give some attention to bringing the titanium implant schedule into a closer relationship with actual costs. There are no doubt other parts of the schedule that should receive similar attention. After the hearing of this appeal the proceedings were adjourned to enable the appellant to make further representations to the Corporation, but the Corporation declined to alter its original determination and a decision on this appeal is now required. For the reasons that I have stated the appeal is dismissed. DATED at WELLINGTON this 6th day of October 1995 D A Ongley District Court Judge