Wellwood v Accident Rehabilitation and Compensation Insurance Corporation

IN THE DISTRICT COURT HELD AT NAPIER Decision No. 3 b / 9 ½ DCA No. 78/9-! UNDER The Accident Rehabilitation and I Compensation Insurance Act 1992 AND IN THE MATTER of an Appeal pursuant to Section ALVIEW NO. 68/94/0141 91 of the Act BETWEEN RODERICK ARTHUR WELLWOOD of Napier Appellant AND ACCIDENT REHABILITATION AND COMPENSATION INSURANCE CORPORATION a body corporate duly constituted under the provisions of the said Act Respondent HEARD on the 20th day of July 1994 APPEARANCES Appellant in person N G Morrison for respondent DECISION OF JUDGE AW MIDDLETON The issue in this appeal is whether the appellant is entitled to reimbursement for private hospital and specialists costs incurred in respect of an operation to his right thumb which took place on 28 June 1993. The appellant had injured his thumb while packing kiwifruit in his packing shed and his general practitioner gave him early treatment and was of the view that he would not lose the nail. The cost of treatment was covered by the respondent. As the injury did not heal and became infected, his general practitioner referred him to Dr Krishnayya, a general surgeon. Dr Krishnayya operated on the appellant's right thumb on 28 June 1993 and removed the nail and nail bed. On 2 July 1993 and 5 July 1993 the appellant attended on Dr Krishnayya to have the dressing changed and the wound examined. 2 On 20 September the respondent recei,·ed Dr Krishnayya's bill ·which set out his charges as follo\,·s: 1. A \·ulsion of nail under local anaesthesia No. 55 - 5150, 2. Surgical material and dressing - S75, 3. Theatre fee - 5150 Total: 5375 On 4 November 1993 the respondent advised the appellant that it ·was unable to make any payment towards the cost of treatment because the respondent's prior approval to the treatment had not been made prior to the treatment taking place. The appellant appealed against that decision as a result of which a review hearing took place on 19 January 199.:1. The Review Officer ascertained that the respondent had paid Dr Krishnayya a total of $190.25 representing the cost of consultations only. In his notice of appeal the appellant confirmed that the respondent had accepted the responsibility for four consultations with Dr Krishnayya without his knowledge. He stated also that he was unaware of the provision that he was required to obtain prior approval for private hospital treatment. The appellant repeated this submission to me and expressed his concern that he was not aware that Dr Krishnayya's clinic was a private hospital nor was he aware that treatment from Dr Krishnayya required prior approval from the respondent. The legal position is governed by the Accident Compensation (Specialists Costs) Regulations (No. 2) 1990 which provides in Regulation 11: "(1) Tlze Corporation shall not make any pay111e/lt iH 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 witlz an asterisk (*) in a private hospital, or in the registered specialists roo111; and (b) the prior apprornl of the Corporntion to tlze pe1fornzance of tlze procedure has been obtained. (2) Except as provided i11 subclause (3) of this regulation, the Corporation shall not gi'l1e the approval referred to in sub-clause (1) of this regulation unless it is satisfied tlzat it is 11ecessary for tlze due restoratioll of tl1e claimt1/lt to his or her principle economic acti-liity or 1l'Ollld enable tlze claimant to undertake relllwzerated elllploy111e11t t/zat t/ze treatment be provided. 11 In addition, Regulation 6 of the Accident Compensation (Private Hospital Costs) Regulations 1990 applies. That regulation states: "Co1Lditio11s applyiHg to pay111e11ts for prmzte hospital treat111el!t: 3 1. T/1c Corporation shall 11ot 11111ke 1111y 1-my111e11t i11 respect of 1111y tre11t111c11t specified ill tile Schedule to these reg11latio11s 1111less - ( (a) the treatme11t is proz•irlerl as a necessan; arljzmct to treatl1lent that lzas been approzi ed under - (i) The Accident Col1lpensation (Specialists Costs) Regulations (No. 2) 1990; or (ii) Tlze Accident Colllpensation (Dental Specialists Costs) Regulations (No. 2) 1990; or (iii) The Accident Compensation (Anaesthetists Costs) Regulations 1990 and ... " Mr Morrison submitted that the wording of the regulations is clear and prior approval must be obtained before an operation is performed. There is no pm.ver for the respondent to pay for private hospital costs or specialist's fees where prior approval has not been obtained. There is no discretion contained in the regulations. Mr Morrison also submitted that the respondent paid for the appellant's consultations with the general practitioner pursuant to the powers contained in the Accident Rehabilitation and Compensation Insurance (General Practitioners Costs) Regulations 1993. He also submitted that Dr Krishnayya's fees could be divided into two categories: 1. Consultations 2. Procedures specified in Part II of the Schedule. It was for this reason that the respondent was able to pay the consultation fees but the other matters were procedures specified in Part II of the Schedule which required prior approval from the respondent. I explained to the appellant that there is no discretion which enables the respondent or the Court to go behind the requirement that the surgical procedures performed in a private hospital require the respondent's prior approval. While the appellant may not have been aware that Dr Krishnayya's surgery is a private hospital, this does not relieve him of the obligation to obtain prior approval from the respondent. I have expressed concern in the past that there is a responsibility on all medical practitioners to advise their patients of the financial implications involved before procedures are undertaken. This was recognised by Judge Blair sitting as Accident Compensation Appeal Authority in the case of New 1 NZAR 164 which he heard in 1976 and in which he states: "This cnse, anrl other cnses that hm•e come before 111e have dclllonstrntcd that tlze Jlledical professio11 Jws a particular responsibility i11 accide11t cases to e11sure that tlze --1 p11tielltf11lly wuferst1111ds tlze fi11m1cial i111plicatio11s of 11 rcco111me11d11tio11 by the doctor that tl1e p11tic11t enter a pri"l't1te Jwspitnl cl'itlz its atte11d,111t costs." I consider that with the plethora o'f regulations now in place in respect of Accident Compensation matters v-:hich require strict adherence and \Vhich do not provide the respondent any discretion to go outside them, the responsibility on the medical profession is even greater than it was in 1976. In this case the appellant has clearly been prejudiced because he was not advised of the financial implications involved in the referral to Dr Krishnayya. The appeal is dismissed. DATED at WELLINGTON this I day of A1itj14S 1994 F Judge AW Middleton DCA78-9-tdoc (TE)