Anti-Fraud Task Force Considering SABS and UDAP Changes

Ontario auto insurance stakeholders may be tired of SABS reforms still the Auto Insurance Anti-Fraud Task Force in their status report is suggesting consideration of a number of SABS changes put forward by the insurance industry to assist in deterring and dealing with fraud. These related to relationships between insurers and claimants.

1. Require claimants to confirm attendance at treatment facilities

Insurers have reported being billed for treatments that never took place. In some circumstances the claimant or injured person was unaware this occurred. The Statutory Accident Benefit regulation could be amended to require health care providers and assessment facilities to ask claimants to sign a form each time they receive a treatment. Copies of the forms would have to be kept on file and made available for inspection by a representative of the insurer at the time of audit.

I'm not so sure this is really needed. On July 1, 2011 section 46.2 was added the SABS to provide insurers with the ability to request information from providers to verify that treatment had been provided. That could include clinical notes and other records. Verification of treatment provided already exists and, in fact the clinical record even specifies the type of treatment provided as well as the date.

2. Require claimants to confirm receipt of goods and services billed to insurers

Insurers have reported being billed for goods and services that were never provided. In some circumstances the claimant or injured person was unaware this occurred. The Statutory Accident Benefits regulation could be amended to require providers of goods and services to ask claimants to sign a form when they receive goods. Copies of the forms would have to be kept on file and made available for inspection by a representative of the insurer at the time of audit.

There is some merit to this proposed provision. However, this information should also be in the clinical records. An additional requirement would suggest that clinicians are falsifying clinical records which may be occurring though I don't recall anyone ever raising it as a problem.

3. Require claimants to attend up to two examinations under oath upon request of insurer

Insurers sometimes have difficulty substantiating a claim without additional information that only the claimant could provide. The current regulatory regime requires only one examination under oath and in many cases this examination takes place very early and is directed at establishing which insurer is the responsible insurer where there is more than one company involved and doubt about the facts. Insurers have suggested that once treatment has commenced it would be desirable to allow for a second examination under oath if an issue arises that could not have been anticipated at the time of the first examination, or where the first examination had to wholly be used to establish which insurer was responsible for a claim. As a matter of due process, it is important that additional criteria be established around this proposal to ensure that claimants are treated fairly during the administration of these examinations under oath.

I agree with this proposed provision.

4. Require a claimant to pay their insurer a $500 fee for missing a medical examination as requested

Insurers are billed when claimants fail to attend a medical examination arranged by the insurer at an agreed time and place. It has been reported that some legal representatives have told their clients not to attend, and to not give notice. The SABS could be amended to require the claimant to pay a fee of $500 toward the cost of the missed appointment when the person has missed an appointment, without giving reasonable notice or without offering a reasonable explanation for failing to give notice in time. It would be up to the insurer, not FSCO, to give the claimant timely and adequate warning of the potential charge, and to collect the money.

I agree with this proposed provision. However, I'm not so sure it will reduce non-attendance at medical examinations. I predict that many of those legal representatives that advise their clients not to attend will dispute indicating that reasonable notice was given. In some cases I could see a legal representative paying the $500 charge in order to avoid the exam.

5. Strengthen enforceability of the Cost of Goods Guideline by making direct reference to its application in the Statutory Accident Benefits Schedule (SABS)

The current SABS does not include a direct reference to the Cost of Goods Guideline. For enforceability and as a technical matter, the SABS should refer directly to the Cost of Goods Guideline.

I agree with this proposed provision.

6. Make it an unfair or deceptive act or practice to request a claimant or injured person to sign a claim form that has been left blank or incomplete

Insurers report that claimants are at times asked to sign claim forms before the items to be billed to the insurer have been entered. The claimants are often unaware that it is against the rules for them sign what amounts to a blank form. When they do sign, it is easier to exaggerate, misrepresent or fraudulently bill for treatments or for goods and other services without their knowledge. A change in rules would make it a violation under rules governing unfair or deceptive acts or practices to present a blank or incomplete form for signature.

I agree with this proposed provision though I can see it being very difficult to enforce. Let's face it there is no one looking over the shoulder of the facility at the time these forms are completed.

7. Require insurers to include an itemized list of expenses in the benefit statement sent to claimants every two months

The SABS requires insurers to send claimants a benefit statement every two months. Adding an itemized list of expenses to the benefit statement would allow claimants to review specific expenses incurred under their claim and identify any suspicious information. Insurers could also include information about how a claimant can report suspicious activity so that they stop the misuse of their benefits by fraudsters.

I strongly support this proposed provision. I was disappointed to see insurers not properly use section 50 of the SABS when it was introduced on September 1, 2010. The current benefit statements may comply with the SABS but insurers made no effort to use them as a fraud detection tool which was intent of the section 50.

You can also read about the proposed regulatory model for treatment and assessment facilities in Ontario and the amount of fraud in Ontario.