Warren v Accident Rehabilitation and Compensation Insurance Corporation

IN THE DISTRICT COURT HELD AT BLENHEIM Decision No. 29 / 97 UNDER The Accident Rehabilitation and Compensation Insurance Act 1992 AND IN THE MATTER of an appeal pursuant to section 91 of the Act BETWE ROBERT IAN WARREN of Picton Appellant (Appeal No. DCA 376/96) AND ACCIDENT REHABILITATION AND COMPENSATION INSURANCE CORPORATION a body corporate duly constituted under the provisions of the said Act Respondent HEARD on the 11th day of February 1997 APPEARANCES Appellant in person D Tui for respondent DECISION OF JUDGE A W MIDDLETON The issue in this appeal is the amount of contribution which the respondent should pay towards the appellant's private hospital treatment. The issue falls to be considered under the Accident Rehabilitation and Compensation Insurance Act 1992 and the Regulations made thereunder. The appellant suffered a hernia in September 1995 when carrying buckets of gravel. He lodged a claim for cover with the respondent which was accepted on 10 October 1995. In December 1995 the appellant requested assistance with private hospital costs and his application noted that his claim was "private hospital (subject to 2 suitable funding)" costs. A formal application for treatment at the Churchill Hospital Trust was lodged on 21 December 1995. On the same day the respondent wrote to the appellant and stated: "Your specialist has asked ACC to contribute to the cost of your private hospital treatment. I'm pleased to advise this request has been approved, and this approval is valid for six weeks from the date of this letter. ACC legislation states the maximum amounts I am able to pay, and these are listed on the attached Approved details form. These figures include GST. Before your operation, you should obtain from the private hospital, surgeon, and anaesthetist, an estimate of their fees. This will allow you to calculate the amount you will have to contribute. The bottom section of the Approval details form provides room for this calculation. If you can't proceed with the treatment because you cannot pay for your contribution, I may be able to consider an advance for this purpose. Any advance would be repayable, and if you wish to know more about this option, you should contact me before your operation. Once you've had your operation, this approval ends. If you want ACC help for any further treatment, you will have to obtain a new approval. Because I can't consider the payment of costs that have already been incurred, a new approval must be obtained before any further treatment is provided. If you are employed, you may be entitled to weekly compensation. You will need to forward a medical certificate for the time you are off work, and you should ask your specialist to issue an ARC18 (Further medical certificate) following your treatment. ACC also provides things like home help and child care, and all claimants can apply for these using the attached ARC1. If you are not satisfied with this decision, of if you have any questions, please contact me. You can ask for a review any time in the three months from the date of this letter. This request must be made in writing using an ARC33 (Application for review). This form is available from any ACC office. ACC's service commitment is to return your phone call within one working day and reply to any correspondence within 21 days." Attached to that letter was a copy of the respondent's "private hospital treatment costs - Approval detail form" which in so far as this appeal is concerned it stated: 3 Claimant details Claimant's name: Mr R I Warren Case number: T2176369/005 Accommodation costs Accommodation costs for private hospitals can be paid up to the following amounts: Days of admission and discharge $100.45 Other days $200.80 Day patient $133.90 Theatre costs Theatre costs include a standard cost of $114.75 for the first 15 minutes, plus any of the following amounts: From 15 minutes to 1 hour $43.05 per 15 minutes From 1 hour to 2 hours $28.70 per 15 minutes Thereafter to conclusion $14.35 per 15 minutes Surgeon's fee With regard to the surgeon's fee, ACC will pay an amount regulated for the type of operation actually carried out. For your proposed operation, the Regulations allow ACC to pay a maximum of $344.25. Anaesthetist's fee The anaesthetist's fee is calculated at a time unit value of $26.80. This is the maximum time unit that Regulations allow ACC to pay. The next issue which appears on the file is the anaesthetist's account for fees which was submitted to the respondent for payment, the total claim being $306. The respondent then wrote to the appellant on 13 February 1996 reminding him of the information contained in its letter of 21 December 1995 that the legislation permitted the respondent to pay certain maximum amounts in respect of private surgery costs and that the maximum fee it could pay for the anaesthetist was $241.20 which meant that the appellant was liable to personally meet the balance of $64.80. A similar situation arose with the accommodation, theatre and surgical fees, they being accommodation costs totalling $1015.10 with a maximum contribution payable by the respondent of $444.80, and the specialist's costs were invoiced at $810 but the Corporation's calculation of contribution was $344.25. The appellant wrote to the respondent on 16 May 1996 disputing its calculation of costs. While the entire operation had cost $2,131.25, the respondent had calculated its contribution at $1030.20. In his letter of 16 May 1996 the appellant had submitted that he had relied on the statement made by his Case Manager, Sue Davies of January 1996 that the respondent would contribute between 60% and 80% of the cost and that he had relied on that statement before consenting to undertake the surgery. On 4 June 1996 the respondent again wrote to the appellant telling him that Ms Davies did not recall stating that the respondent could contribute between 60% and 80% and also advising the appellant that had the statement been made, it was only intended as an estimate and could not bind the respondent whose response had been recorded in the letter of 21 December 1995 The appellant then issued proceedings in the Disputes Tribunal on 28 June 1996 requiring the respondent to refund the outstanding fee of $536.30 but the Tribunal, after initially communicating to the appellant, that it appeared that "a quasi contract was entered into", declined jurisdiction. It appears that it did this after receiving advice from the respondent. The appellant then applied for a review of the decision and although it was out of time it was accepted by the respondent. The appellant gave evidence at the review hearing when he confirmed that he had relied on Ms Davies' advice and would not have undertaken the surgery had he been aware of the amount he subsequently would be required to pay. He submitted to the Review Officer that the respondent was bound by Ms Davies assurance that it would pay between 60% and 80% of his hospital cost. The Review Officer held that the respondent had correctly applied the provisions of the Act and the Regulations and declined the application for review. It is against that decision which the appellant now appeals. The appellant prepared a lengthy submission in which he detailed the history of events which led up to the appeal. His principal concern was that in a pamphlet issued by the respondent which is headed "The last thing you need is the runaround" it is stated: Now, when you need help from ACC, there's just one person to deal with - your personal Case Manager. Your Case Manager can tell you exactly what you're entitled to under ACC." The appellant repeated his statement to the respondent that Ms Davies had indicated that, from her knowledge of previous claims, the respondent would pay between 60% and 80% of the costs and as the pamphlet indicated that he could rely on the Case Manager to tell him "exactly" the amount to which he would be entitled, the respondent was bound to act on the basis of that pamphlet. That was similar to the submission which he had made before the Disputes Tribunal which had apparently led to that Tribunal indicating to him that there appeared to be a quasi contract. He said that while he had received the letter of 21 December 1995 and the attached "Approval detail form" he understood that it was necessary for him to complete the application form which he found extremely difficult and something he considered should not have been required of a layman. He said that he did the best he could and discussed it with his surgeon and completed it but in the knowledge that he anticipated receiving between 60% and 80% of the cost from the respondent. He said that when he started receiving accounts from the respondent for the difference between the actual accounts and the sums approved by the respondent he became extremely concerned and in his submission considered that the respondent "had 5 reneged on the assurance given to me by my Case Officer". The appellant submitted that he was completely baffled by the Review Officer's reason for his decision because the Review Officer had stated in reference to the pamphlet "however, that publication also contains a rider noting that in the event of any dispute the legislation takes precedence over the publication." The appellant submitted that there is no such rider. The appellant's principal submission is that the respondent is bound by its pamphlet and the statement of the Case Officer and should now pay the difference between the costs of the actual procedures and the contribution which it is already been made towards it. Mr Tui submitted that the Act states that the respondent cannot pay any amount towards treatment costs other than those specifically set out in the regulations made under the Act and that it has no discretion to vary those payments. He submitted further that the appellant was wrong to have relied on what he said was Ms Davies' advice which could only be taken as an estimate and nothing more. He submitted further that whatever advice Ms Davies had given, had she had the power to make a decision on behalf of the respondent, it is empowered by section 67A to revise any such decision if it considers a mistake has been made. The issue before me can only be decided on the basis of the provisions in the Act and the regulations made thereunder. As it applied to this appellant, section 27(1) of the Act states: "(1) Where a person requires any treatment, service, physical rehabilitation, related to transport, or certificate in respect of that person's personal injury that is covered by this Act (in this section called a "specified service"), the Corporation shall contribute to the cost of that specified service to the extent required or permitted by regulations made under this Act." Regulation 4(1) of the Accident Compensation (Specialists Costs) Regulations (No. 2) 1990 states: "4. Corporation to pay certain costs (1) Subject to these regulations, the Corporation shall pay the costs of treatment provided by a registered specialist to any claimant in respect of personal injury by accident to the extent specified in the Schedule to these regulations." (emphasis mine) The Approval detail form sent to the appellant on 21 December 1995 notes that the surgeon's fee for a unilateral hernia is $344.25. That is the figure which is fixed in the schedule to the specialists costs regulations unless the specialist charges a lesser fee. In the same Approval detail form the appellant was advised that the anaesthetist's fee is calculated at $26.80 for a time unit of 15 minutes and that is the maximum time unit permitted by the regulation. The Accident Compensation (Anaesthetists Costs) Regulations 1990 permits the payment of the $26.80 which is based on a time unit which consists of a block of 15 minutes. In the case of the treatment given by the 6 appellant's anaesthetist, nine units were involved hence the payment by the respondent of $241.20. Under the Accident Rehabilitation and Compensation Insurance (Supplementary Treatment Costs) Regulations (No. 2) 1993, the details of the amounts which the respondent is required to pay for private hospital treatment are set out. Again, the regulations provide that the respondent is not permitted to pay other than the amounts specified in the schedule to the regulation and in this case, that schedule states: "The costs payable by the Corporation for treatment provided by a licensed hospital is the amount that the licensed hospital would have charged the claimant if the treatment were one for which the Corporation was not making a payment, or the amount specified below, whichever is the lesser: Accommodation Costs $ 1. Day of admission 100.45 2. Day of discharge 100.45 3. Other days 200.80 4. Day patient 133.90 Theatre Costs $ 5. Standard cost (including first 15 minutes) 114.75 plus 6. From 15 minutes to 1 hour 43.05 per 1/4 hour 7. From 1 hour to 2 hours 28.70 per 1/4 hour 8. Thereafter to conclusion 14.35 per 1/4 hour" Accordingly, based on those figures, the calculation was made: "Date of admission $100.45 Date of discharge $100.45 Theatre costs (1 hour) Std $114.75 (15 minutes) 3 x $43.05 $129.15 (45 minutes) TOTAL $444.80" Accordingly, the figure of $444.80 was the only amount which the respondent can pay in respect of hospital treatment costs because those are the figures set by the Regulations and based on the time involved. I am concerned that the appellant has continued with his appeal in the mistaken belief that the respondent could be bound by the pamphlet it had published and by the Case Officer's estimate of costs which was given to him. The Case Officer has no authority to bind the respondent in anyway and can only explain the nature of the entitlements which may have been available to the appellant, he having been granted cover. 7 I consider that he has relied too heavily on the wording of the pamphlet and although he takes issue with the Review Officer's statement that it was subject to a rider, I must explain that the pamphlet is only published as a guide to entitlements. The specific entitlements of any applicant can only be made after the applicant has been granted cover but then only in accordance with the strict requirements which are set out in the legislation and the regulations made thereunder. When the Review Officer said the pamphlet was subject to a rider that is the rider to which he referred. The appellant also took issue with the fact that the Disputes Tribunal disclaimed jurisdiction because of what he thought was pressure from the respondent. I consider that his application would have been novel as far as the Review Officer was concerned and it was a completely misconceived application because the requirement under the Accident Rehabilitation and Compensation Insurance Act 1992, is that where an applicant is not satisfied with a decision of the respondent, his only remedy is by way of review and appeal. I do not accept that it could be said that any pressure was placed by the respondent on the Disputes Tribunal. Once the Disputes Tribunal became aware of the requirements of the Accident Rehabilitation and Compensation Insurance Act 1992 he realised that he had no jurisdiction to deal with the claim. I am also concerned that while the letter of 21 December 1995 told the appellant that "before your operation, you should obtain from the private hospital, surgeon, anaesthetist, an estimate of their fees" the appellant told me that while he discussed this issue with his surgeon, he found it extremely difficult to complete the form and for that reason he considered that he had to rely on his Case Manager's estimate that he would receive between 60% and 80% of the total cost. The appellant did not say whether he asked his surgeon's advice regarding the "Approval detail form" which set out the exact basis upon which the respondent's contribution to his treatment would be calculated. The appellant has sought to progress this far without seeking any assistance and while I sympathise with his position and the fact that he considered he could rely on the Case Manager's statement, the issue on appeal is straight forward. The provisions of the Act and the Regulations are quite clear and allow absolutely no discretion either to me or to the respondent. Unfortunately for the appellant, the figures as assessed by the respondent are completely in accordance with its requirements under the legislation and the appeal must be dismissed. DATED at WELLINGTON this 27 day of February 1997 A W Middleton District Court Judge dc376-96.doc (nr)