Canada: Can Auto Insurers Require An Insured To Undergo Medical Examinations?
Case Study: Joaquim v. Intact Insurance Co.

Case Study: Joaquim v. Intact Insurance Co.¹

The Ontario Superior Court of Justice Divisional Court reviewed a decision of the Licence Appeal Tribunal (the "LAT") and addresses whether auto insurers can require an insured to undergo medical examinations to determine eligibility for prescription medication claims.

Factual Background

Ms. Joaquim (the "Insured") was injured in a motor vehicle accident on January 12, 2017. She filed a claim for statutory accident benefits with her auto insurer, Intact Insurance (the "Insurer"). She then submitted expenses for prescription medication via a standard OCF-6 expenses claim form.

In an effort to determine whether the submitted expenses were reasonable and necessary, the Insurer requested supporting information regarding the prescriptions. The Insured did not respond to this request. Shortly thereafter, the Insurer advised the Insured that she must undergo a section 44(1)² examination to determine whether the prescription expenses were reasonable and necessary. The Insured declined to attend on the basis that the Statutory Accident Benefits Schedule (the "Schedule") does not permit insurers to request examinations to determine eligibility for prescription medication claims. The Insurer in turn denied the Insured's claim for prescription medication expenses.

...the Insured took the position that as she is claiming for drugs prescribed by a regulated health professional, a treatment plan is not required.

Position of the Parties

The Insured submitted that the modern approach to statutory interpretation³ requires s. 44 to be read in the context of the entirety of the Schedule. The Insured relied upon 17-001866 v. Aviva Insurance⁴ to argue that the impugned OCF-6 did not "activate" a s. 44 assessment, as the treatment plan is not required for the prescription medication claims in accordance with s. 38(2)(c)(i) of the Schedule.⁵ Specifically, section 38(2)(c) of the Schedule provides that an OCF-18 "treatment plan" is not required for drugs prescribed by a regulated health professional or goods with a cost of less than $250 per item or service.⁶ Therefore, the Insured took the position that as she is claiming for drugs prescribed by a regulated health professional, a treatment plan is not required.

The Insured further relied upon Ward v. State Farm Mutual Automobile Insurance Co⁷, a Financial Services Commission of Ontario decision as a persuasive authority⁸ to support her position. Ward found that an insurer cannot require an insured to attend an examination under s. 44 to determine entitlement to prescription medication claims.

Further, the Insured took the position that the Adjudicator failed to appreciate the distinction between medical and rehabilitation expenses that the Schedule requires be submitted through treatment and assessment plans (OCF-18) and those submitted through expense claim forms (OCF-6). The Insured submitted that only disputes involving a treatment and assessment plan can trigger a s. 44 examination, and because she submitted an expense claim form, she was not subject to a s. 44 examination.

The Insured claimed that her submission of an expenses claim form rather than the more onerous treatment and assessment plan was appropriate pursuant to s. 38(2)(c)(i) and (ii)⁹ as the benefit claimed was a drug prescribed by a regulated health professional, and further, comprised of eight individualized itemized prescription expenses, each under $250. Section 38(2)(c)(i) notes treatment and assessment plans are not required for prescription medications, and (ii) provides that treatment and assessment plans are not required for goods or services under $250. As the Insured submits that only a treatment and assessment plan can trigger a s. 44 examination, since she was not required to complete a treatment and assessment plan and instead only an expenses claim form, that she cannot be examined pursuant to s. 44.

The Insurer submitted that the Adjudicator correctly held that s. 44(1) of the Schedule provides an insurer with overarching authority to require an examination to determine whether any statutory accident benefit is reasonable and necessary.

While the Insurer agreed prescription drugs prescribed by a regulated health professional are exempt from OCF-18s and do not allow for examination, it disagreed with the Insured's stance that all prescription medications are not examinable under s. 44, unless it falls into an enumerated category of benefits which is specifically excluded. The insurer relies upon a statutory interpretation argument, stating that since s. 44(3)¹⁰ specifically enumerates exceptions to a s. 44(1) examination, if the legislature intended for prescription medications to not be a benefit subject to s. 44(1) examination, then it would be enumerated along with the exceptions set out in s. 44(3).

...all goods and services may be subject to an examination ...

The Insurer further relies on a statutory interpretation argument which favours the interpretation of S. 38(10)¹¹ to conclude that all goods and services may be subject to an examination under s. 44, and not just those goods and services which are claimed in a treatment and assessment plan (the position the Insured adopted).

Further, the Insurer claims Ward is distinguished, noting that the prescription drugs in that case were under $250. The Insurer submits because the Insured's prescription medication expenses collectively exceed $1,000, Ward is not applicable.

The Decision at the LAT¹² - The LAT Adjudicator determined the Insured was barred from proceeding with her application disputing the denial because of her refusal to attend the examination pursuant to section 44 of the Schedule. The Adjudicator relied upon s. 44(3)¹³ which provides exceptions to the s. 44(1), noting that s. 44(3) does not provide an exception for prescription drugs. The Adjudicator agreed with the Insurer that the Insured's impugned prescription medication claims were not reasonable. The Insured appealed the LAT's denial of her claim.

... failure to attend a s. 44 examination when properly requested can bar an insured's claim.

The Appeal to the Divisional Court - The Court acknowledged failure to attend a s. 44 examination when properly requested can bar an insured's claim. The discrete issue to be determined was whether the Insurer had the authority to make a request for an examination under s. 44 in the first place.

The Court looked to s. 38¹⁴ of the Schedule which permits an insurer to require examination where there is a question to the reasonableness of an expense in a treatment and assessment plan. Here, the Court agreed with the Insured that expenses submitted through expense claims forms and treatment and assessment plans differ in that benefits submitted via expense claims forms are not subject to a blanket right to examination under s. 44(1). In arriving at this conclusion, the Court adopted a contextual approach¹⁵ to statutory interpretation which interprets s. 38(10) to ultimately stand for the fact that when a dispute arises about claims for medical or rehabilitation benefits, an insured can be examined pursuant to s. 44 if and only if the disputed benefits are advanced through a treatment and assessment plan â€" not an expense claim form.¹⁶

The Court held that s. 44(1) cannot be read in isolation and does not confer overriding authority to insurers to request examination to determine the reasonableness of a benefit. The Court found that s. 44(1) ought to be read in the context of the entirety of the Schedule. Notably, the Court looked at s. 44 in its entire context. Specifically, the Court read s. 44 in concert with ss. 36, 37, 38 and 42, all of which enumerate events triggering a right to request a s. 44(1) examination. The Court found it to be untenable to interpret s. 44(1) to provide an overriding authority to examine, as the insurer submitted, when a contextual reading suggests existence of specific events that trigger a s. 44 examination. The court asked rhetorically, "What purpose would be served by describing the specific processes that may trigger a request for an examination in sections 36, 37, 38, and 42 if the insurer is already afforded the overarching authority under section 44 to require an examination to determine eligibility for any benefit . . .?"¹⁷

Further, the Court was not persuaded by the Insurer's submission that s. 44(3) enumerates an exhaustive list of instances in which the insurer is prohibited from requesting a medical examination. In arriving at this conclusion, the Court cited, as an example, s. 42(12)¹⁸, which provides an exception not enumerated in s. 44(3). The Court therefore held s. 44(3) was not exhaustive of all exceptions to examination.

The Court lastly turned to the Adjudicator's interpretation of Ward. The Court held that Ward, though not binding on the Court, was a persuasive authority which stands for s. 44 examinations being unavailable for claims relating to either prescription drugs or goods under $250 per ss. 38(2)(c)(i) and (ii), respectively. Either condition being met is sufficient to qualify the drugs in question to be exempt from a s. 44 analysis. This means that if an insured's prescription medication expenses exceed $250, it would still be exempt from s. 44 scrutiny, as by virtue of being a prescription drug prescribed by regulated health professional, it satisfies 38(2)(c)(i).

The Court ultimately allowed the Insured's appeal and set aside the Adjudicator's decision at the LAT. The Insured would be allowed to commence a proceeding at the LAT to dispute denial of her prescription medication claim.

The decision in Joaquim at the Divisional Court clarifies often disputed claims for prescription medications under the Statutory Accident Benefits Schedule and functions to settle once and for all the insurer's right (or lack thereof) to a s. 44(1) medical examination of its insured in the context of prescription medications of any value, and goods and services under $250.

Treatment of the Joaquim Decisions

Given the recency of the Divisional Court's decision, we have yet to see it tested and cited. However, the decisions from the LAT (initial decision and the reconsideration decision) have been cited recently.

In Brush v Aviva Insurance Company of Canada¹⁹, the respondent Insurer relied upon the lower Joaquim decisions to successfully argue that an applicant can be subjected to independent medical examinations for OCF-6s containing prescription medication expenses. The insurer in Brush also relied upon the lower Joaquim decisions to argue that the applicant submitted "broken up" OCF-6s containing medications that cost less than $250 but total over $1,000, which the Adjudicator at the LAT accepted.

Following the successful appeal of Joaquim at the Divisional Court²⁰, the principles established in the LAT in the lower Joaquim decisions and relied upon in Brush are no longer binding. The Divisional Court has made it clear that expense claim forms, including those for prescription medication of any value and goods and services under $250, will not be available to examine by an insurer pursuant to s. 44(1).

Footnotes

1. Joaquim v. Intact Insurance Company, 2023 ONSC 5120 (CanLII)

2. Statutory Accident Benefits Schedule, O Reg 34/10,s 44(1) provides a basis for insurers to require their insured to be examined by a regulated health professional to determine if an insured is continued to be entitled to a benefit under the Schedule.

3. See Rizzo & Rizzo Shoes Ltd. (Re), 1998 CanLII 837 (SCC), [1998] 1 SCR 27 at para 21: "words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act"

4. 17-001866 v. Aviva Insurance, 2018 CanLII 140997 (ON LAT)

5. Statutory Accident Benefits Schedule, O Reg 34/10, s 38(2)(c)

6. Ibid.

7. Ward v. State Farm Mutual Automobile Insurance Co., [2016] O.F.S.C.D. No. 54 (Ont. Fin. Serv. Com.).

8. The decision from the Financial Services Commission of Ontario or not binding on the Licence Appeal Tribunal but serves as a persuasive authority.

9. Statutory Accident Benefits Schedule, O Reg 34/10, s 38(2)(c): "An insurer is not liable to pay an expense in respect of a medical or rehabilitation benefit or an assessment or examination that was incurred before the insured person submits a treatment and assessment plan that satisfies the requirements of subsection (3) unless, the expense is reasonable and necessary as a result of the impairment sustained by the insured person for, (i) drugs prescribed by a regulated health professional, or (ii) goods … with a cost of $250 or less per item"

10. Statutory Accident Benefits Schedule, O Reg 34/10, s 44(3).

11. Statutory Accident Benefits Schedule, O Reg 34/10, s 38(10): "If the insurer has not agreed to pay for all goods, services, assessments and examinations described in the treatment and assessment plan or believes that the Minor Injury Guideline applies to the insured person's impairment, the … [insurer] may notify the insured person that the insurer requires the insured person to undergo an examination under section 44

12. Joaquim v Intact Insurance Company, 2021 CanLII 134243 (ON LAT); Joaquim v Intact Insurance Company, 2022 CanLII 106458 (ON LAT).

13. Supra, note 10.

14. Supra, note 9.

15. Supra, note 3.

16. Supra, note 1 at para 23.

17. Ibid at para 28.

18. Statutory Accident Benefits Schedule, O Reg 34/10, s 42(12).

19. Brush v Aviva Insurance Company of Canada, 2023 CanLII 74644 (ON LAT) at para 26.

20. Supra, note 1.

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