Two recent decisions of the Ontario Superior Court of Justice have considered whether a treating/assessing facility can advance a claim against the accident benefits insurer of the claimant being treated.
In the usual course of adjusting an accident benefits claim, the insurer considers applications for treatment and assessments through the usual OCF-18 and OCF-22 application process respectively. As it is the insured person who applies for benefits through their own insurance company, the moniker “first-party insurance claims” applies to accident benefits claims. Where treatment and/or assessments have been denied by the insurer, a dispute can arise as to whether the insurer should pay for the treatment/assessments applied for and denied. When such a dispute arises, that dispute belongs to the insured person (ie. the claimant). The claimant must first mediate the dispute through the Financial Services Commission prior to the commencement of arbitration or litigation proceedings.
Recently, the Superior Court considered claims advanced by MedCentra Inc. against accident benefits insurers. In other words, the claim for compensation was advanced directly by a facility, not by the insured person. MedCentra Inc. sought compensation from the accident benefits insurer for the costs of MRI scans which had been provided to various insured persons but not funded by the insurer. The Court released two decisions in two separate claims made by MedCentra. The first decision is regarding MedCentra’s claim against Economical Mutual Insurance Company and the second decision is regarding MedCentra’s claim against Unifund Assurance Company. The decisions are: MedCentra Inc. v. Economical Mutual Insurance Company (2009 CanLII 51184) and MedCentra Inc. v. Unifund Assurance Company (2009 CanLII 44708).
The Economical decision resulted in MedCentra’s claim being dismissed. Economical brought a motion for summary judgment, meaning they were asking the Court to make a decision on the matter without a full-blown trial on the basis of certain problems with MedCentra’s claim. Economical argued that MedCentra had no standing to make a claim on the basis that there was no contract between Economical and MedCentra. In the absence of a contract, Economical argued that there was no basis to compel payment. Economical won its motion and MedCentra's claim was dismissed on the basis that there was no privity of contract between it and Economical.
MedCentra also commenced a claim against the Unifund Assurance Company for the payment of MRI fees. Unifund brought a motion to strike MedCentra's Statement of Claim. The Economical decision had been released just prior to the hearing of Unifund's motion. The Court dismissed Unifund's motion to strike the Claim and decided that MedCentra would be allowed to continue with its claim against Unifund. MedCentra had not successfully argued any entitlement to damages, it had simply won the right to proceed with its claim against Unifund.
The Court agreed with the Economical decision and stated that there was no contract between MedCentra and Unifund. In the Statement Claim against Unifund, however, MedCentra went further than simply alleging breach of contract. MedCentra alleged that Unifund had committed other wrongs (in tort) which caused losses to MedCentra. The allegations are as follows:
“In so breaching its obligations pursuant to the SABS, the insurer has thereby induced each insured person to breach his/her contract with MedCentra for the payment of fees, or alternatively, the insurer has thereby intentionally interfered with economic relations between MedCentra and each insured person, for which MedCentra’s entitled to damages […].”
Because the allegations against Unifund go beyond breach of contract, the Court decided that MedCentra would be allowed to proceed with those claims. The Court stated that MedCentra’s claim “met the minimum threshold” applied in the early stages of the proceedings but went on to state, “there are clearly weaknesses which [MedCentra] will have to overcome if it is to be successful at trial or on a summary judgment motion.”
Although the Court has acknowledged the weaknesses in MedCentra’s claim against Unifund, an eye should be kept on how this claim is ultimately decided. Arguably, if there has been a breach of the Statutory Accident Benefits Schedule by an insurer, such a breach may result in benefits being payable to or on behalf of the insured person. Even in the case of a statutory breach, however, the dispute over whether a particular benefit is payable would still belong to the claimant, who could commence a claim through the usual FSCO mediation process. These may be the “weaknesses” in MedCentra’s claim to which the Court is referring. In the event that MedCentra were to successfully overcome the weaknesses in its claim, a judgment in its favour would no doubt open the door to other facilities seeking compensation in tort against the accident benefits insurer.