Walsh v Accident Rehabilitation and Compensation Insurance Corporation

IN THE DISTRICT COURT Decision No. 57195 AT WELLINGTON DCA No. 253/94 UNDER The Accident Rehabilitation and Compensation Insurance Act 1992 AND 47/ 94 04 82. IN THE MATTER of an appeal pursuant to Section 91 of the Act BETWEEN P.J. WALSH APPELLANT AND THE ACCIDENT REHABILITATION AND COMPENSATION INSURANCE CORPORATION RESPONDENT Heard at Auckland on: 23 February 1995 The appellant in person N. Morrison as counsel for the defendant Date of Decision: 16 May 1995 RESERVED DECISION OF JUDGE J. W. IMRIE I have decided to allow the appeal. 2. Introduction: At issue is the Corporation's decision to decline to meet payment of private hospital costs incurred by the appellant. The regulation applying is Regulation 11 of the Accident Compensation (Specialists Costs) Regulations (No. 2) 1990. Mr Walsh suffered personal injury by accident on 27 July 1994 when a fish bone stuck in his throat as he was eating lunch. He was at Howick at the time. He began to feel unwell at about 3.00 p.m. or 3.30 p.m. and saw the locum to his doctor. The locum filled out the claim for cover and treatment expenses form, and both he and Mr Walsh signed it. The doctor then made an appointment for Mr Walsh to go to the Mercy Hospital where the bone was removed. This was emergency endoscopy surgery. Mr Walsh had seen the doctor at Howick at 3.50 p.m. At that time an appointment was made at the Mercy Hospital. Mr Walsh drove to the hospital arriving approximately 30 minutes later, and ten minutes later he was in the theatre. The surgery was completed and he was given an invoice totalling $483. The following day Mr Walsh rang the Manukau office of the Corporation and was told he could not lodge a claim for the private hospital treatment costs until the claim for cover was lodged by his doctor. He rang his doctor and the form was lodged. The date of lodgment is not noted, but it appears from a date stamp on the back of it that it may have been received by the Corporation on 28 July. On 7 August Mr Walsh received a letter from the Corporation dated 1 August saying his claim for cover had been accepted. On that day 3. Mr Walsh wrote to the Corporation asking that payment of the account for $483 be made direct to the hospital. By letter dated 19 August 1994 the Corporation wrote to Mr Walsh. The letter reads in part:- "The Corporation has considered the request for Private Hospital Treatment Costs account to be paid. The criteria for acceptance of these costs must be in terms set out in the Accident Compensation (Private Hospital Costs) Regulations 1990 s.6(1) and the Accident Compensation (Specialists Costs) Regulations (No. 2) 1990. These are as follows:- 1. Prior approval must be given. 2. The Corporation must be satisfied that the surgery is necessary to restore the claimant to his/her principal economic activity. (This includes study activities and domestic household activity that are not directly renumerated. In your case, as you did not seek prior approval from the Corporation for the funding of private hospital costs, this does not meet s.6(2) of the Regulation and regretfully your claim for private hospital costs must be declined. A copy of this has been sent to your surgeon." In an application dated 27 August 1994 Mr Walsh applied for review. The reasons for his application were set out as follows:- 1. The accident required emergency surgery. 4. 2. Prior approval not obtained because it happened so quickly - saw doctor in Bucklands Beach 3-50 p.m. - he made an appointment at Mercy Hospital 3.55 p.m. - drove to Mercy Hospital arriving approximately 20 minutes later - approximately ten minutes later I was in the theatre. 3. No-one, either the doctor or the specialist told me about ACC prior approval required - they had my best interests at heart. 4. Required surgery was as a direct result of an accident. The review was heard on 3 November 1994, and a decision was issued dated 8 November 1994. In his decision the officer sets out the background to the Corporation's decision and the application for review. He set out the concerns Mr Walsh expressed at the review hearing. He referred to the fact that Mr Walsh told him that if he had known he was not covered for the operation costs at the Mercy Hospital, he would have gone to the Middlemore Hospital. In fact, Middlemore Hospital was closer than the Mercy Hospital. It was the doctor who made the appointment for him at the Mercy Hospital. In his decision the officer referred to the Private Hospital Costs Regulations 1989, the Private Hospital Costs Regulations 1990 and the Specialists Costs Regulations (No. 2) 1990. He said that Regulation 11 of the Specialists Costs -Regulations states that the Corporation shall not make any payment unless the prior approval to the performance has been obtained, and approval shall not be given unless the treatment is necessary for the due restoration of a claimant to his principal economic activity. He said that the 5 . Appeal Authority has confirmed the need for prior approval, even in an emergency situation. Private hospital surgery, generally speaking, can be approved only after consideration of the proposed surgery by the Corporation to see if it is necessary to get the person back to work. He said the need for prior approval has recently been confirmed by the District Court in the decision of Wellwood (Decision No. 78/94) where the Judge emphasised there is no discretion. Appeal Hearing: At the appeal hearing Mr Walsh presented a written outline of the sequence of the events. The outline gave the following reasons why he believed that the Corporation should honour the claim:- "1. I was never advised by any of the professionals - my doctor or the surgeon or Mercy Hospital - that I needed prior ACC approval. 2. ACC Manukau City never mentioned this either when I first rang and indicated that once my form was accepted, I could submit the claim and in 10/15 days I should be paid out. 3. My doctor made the appointment at Mercy Hospital because I think he believed that was the only place at that time of night that could assist, and he was acting in my best interests. (Mr Walsh confirmed at the hearing that it was between 4.30 and 5.00 p.m. rather than at "night"). 4. The letter dated 1/8/94 from ACC indicated that the injury was covered. 5. It was an accident-related injury. 6 . 6. I could easily have gone to Middlemore Hospital but was not given that option, and it is much closer to home. I now realise that the ACC has the Act in its favour but there has to be an exception to every rule and I believe this is one of those exceptions, and trust the Court will rule in my favour." Mr Morrison presented written submissions on behalf of the Corporation, and produced a copy of the Wellwood decision. In his submissions he set out the background to the appeal, and summarised the evidence and the Review Officer's decision. He referred to Regulation 11 of the Specialists Costs Regulations and the Accident Rehabilitation and Compensation Insurance (Supplementary Treatment Costs) Regulations (No. 2) 1993 which came into force on 1 July 1993 replacing the Private Hospitals Costs Regulations 1990. Mr Morrison's submissions refer to some of the earlier decisions including New (1976-1979) 1 NZAR 164 and he submitted:- "5.1 THE wording of the Regulations is clear. The approval of the Corporation must be obtained prior to the operation being performed. The Corporation does not have the power to pay private hospital costs or specialists costs where prior approval has not been obtained. The Regulations confer no discretion on the Corporation. It is accepted the application of these Regulations can cause hardship on occasions. However, it is respectfully submitted that the Court should not interfere with only Parliament's clear intention. 5.2 IT is undisputed that the approval of the Corporation to the performance of the operation was neither sought nor obtained prior to the operation being performed. 7. 5.3 THAT pursuant to New the Appellant's medical specialist had an ethical obligation to advise him of the financial implications of treatment. He has failed to so advise. The District Court has confirmed this position in the decision of Wellwood. 5.4 THE Review Officer's decision should not be disturbed." In reply Mr Walsh said that the facts in the Wellwood case were different from his. His case was more acute. With reference to the Corporation's point that the doctor should have told him of the need for prior approval, he referred to the fact that the Corporation did not tell him either when he rang up the day after the operation, and when they wrote to him by letter dated 1 August saying that he had cover for the accident. Consideration and Decision: Regulation 11 of the Accident Compensation (Specialists Costs) Regulations (No. 2) 1990 reads as follows:- "(1) The Corporation shall not make any payment in respect of any procedure specified in Part 2 of this Schedule to these regulations unless - (a) the treatment is provided in a private hospital or, in the case of items marked in the Schedule with an asterisk (*) in a private hospital, or in the registered specialists rooms; and b) the prior approval of the Corporation to the performance of the procedure has been obtained. (2) Except as provided in subclause (3) of this regulation, the Corporation shall not give the approval referred to in sub- 8. clause (1) of this regulation unless it is satisfied that it is necessary for the due restoration of the claimant to his or her principle economic activity or would enable the claimant to undertake remunerated employment that the treatment be provided." It is correct that Mr Walsh did not obtain the prior approval of the Corporation for the performance of the procedure but the requirement for prior approval in the case of an emergency can lead to absurdity. Recently I dealt with an appeal where the Corporation had refused to pay private hospital costs. The appellant suffered injury as a result of medical misadventure on 9 December 1992. She was in a private hospital under general anaesthetic undergoing major rectal surgery for carcinoma when the left ureter was inadvertently divided. The ureter was repaired urgently by a urologist while the appellant was still under general anaesthetic. The Corporation refused to pay for the costs of the urgent repair of the ureter because prior approval had not been obtained. At the hearing of the appeal I raised three points with counsel for the Corporation, and at his request gave him the opportunity to make further submissions within 21 days. One of those points was:- "I am considering in this case declaring invalid the regulation that requires the prior approval of the Corporation to the treatment. It is ridiculous for a regulation to require the Corporation's prior approval for treatment in the type of situation that occurred in this case, that is when a patient suffers personal injury in the course of an operation, such injury being caused by medical misadventure, and the remedial surgery has to be carried out immediately and the patient is under general anaesthetic. " 9. By letter dated 31 March 1995 the Corporation advised the Court:- "The Corporation has agreed to pay part of the costs incurred by Mrs Moore as a result of her medical misadventure to the extent permitted by the Schedule to the regulations. I will advise Mrs Moore accordingly and request her to withdraw her appeal, so that Judge Imrie will no longer need to issue a decision." Mr Walsh's case is not as acute as was that case. However, he was faced with an emergency. He had begun to feel unwell and had a bone stuck in his throat. Clearly Rll must be read to provide for emergencies. The Corporation appears to have recognised that in the appeal to which I have just referred. To avoid absurdity R11(1) must be read as if it began with words such as "Except in a case of personal injury that is an emergency ...". In this case I do not overlook that Mr Walsh could have gone to a public hospital but that does not mean he was not faced with an emergency. He had a bone stuck in his throat. An immediate appointment had been arranged at a private hospital for him and he did not know if he could be treated quickly at a public hospital. (The Corporation has provided no evidence showing that he could have been treated quickly at a public hospital). He cannot be criticised in those circumstances for going to a private hospital. From the decision in Wellwood it appears that there was no emergency. The appellant had injury his thumb and it was treated by his general practitioner who considered the appellant would not lose the nail. The 10. Corporation met the cost of that treatment. Subsequently the injury did not heal and became infected. It was operated on and the nail and nail bed removed. It was the costs of this operation which the Court found the Corporation could not pay. The facts in that case differ from those in Mr Walsh's case. Regulation 11(2) does not bar Mr Walsh's claim. Because there was no application for prior approval the Corporation did not consider R11(2), but if it had, clearly it would have been satisfied that the procedure would be necessary for the due restoration of Mr Walsh to his principal economic activity. Mr Walsh was a bank employee and could not work with a bone in his throat. In any case, if R11(1) is read as if it began "Except in a case of personal injury that is an emergency ..." R11(2) does not have to be considered in cases of emergency. Conclusion: The decision of the Corporation is revoked. It should pay for the costs of the operation according to the scales set out in the regulations. .. .. .. .. ..... (J. W. Imrie DCJ)