Wednesday, 23 January 2013

What Impact The Proposed Anti-Fraud Regulatory Amendments Have?

As previously mentioned the Ontario government plans to introduce new regulatory amendments as part of its anti-fraud initiative.  These amendments are just some of the recommendations made by the Anti-Fraud Task Force.  Here is a brief description of those proposed amendments and how they will impact on the auto insurance system. 

Requiring insurers to provide claimants all reasons for denying a claim

Currently subsections 36(4)(b), 36(7)(b), 37(4), 37(6)(c), 38(8), 38(14)(a), 38(14)(b), 42(3), 42(13)(b), 43(2), 44(5)(a), 45(3)(b) and 45(5)(b) of the SABS require insurers to provide claimants with "medical and any other reasons" for denying a claim for accident benefits.  These subsections were amended in September 2010 to specifically provide a full explanation to claimant for denials.  The Anti-Fraud Task Force heard from stakeholders that adjuster were not providing an a proper explanation and often just indicated that the claim was "not reasonable and necessary."  It will be interesting to see what language the government comes up with to motivate adjusters to change their behaviour.  There is also an enforcement aspect that will be needed to have an impact.

Giving claimants the right to receive a bi-monthly, detailed statement of benefits paid out on their behalf

In September 2010, the new SABS introduced by the government included section 50 which requires insurers to provide a bi-monthly benefit statement to claimants indicating the amount paid by the insurer on behalf of the claimants for medical, rehabilitation and attendant care benefits as well as the amount spent on insurer examinations.  The statement also required to inform the claimant the amount of benefits still remaining.  The experience has been that insurers have been providing these statements but with no more detail than required under the SABS.  The statements do not breakdown payments by provider or service.  Consequently, consumers are unable to determine whether the payments made on their behalf are legitimate.  The government plans to amend section 50 to require the insurer to provide more detail.  The amount of detail is not known publicly at this time.
Increasing the role of claimants in fraud prevention

This involves adding two new provisions to the SABS.  The first would require claimants to confirm attendance at treatment facilities. The second would require facilities to provide a copy of invoices for goods and services billed to insurers. These proposed provisions expand on an amendment made to the SABS in June 2011.  Section 46.2 was added to the SABS to require facilities to provide an insurer with information to support any invoice for goods and services billed to that insurer.  These amendments would require facilities to copy claimants on invoices and for claimants to confirm that they received those goods and services.

Making providers subject to sanctions for overcharging insurers for goods and services and banning them from asking consumers to sign blank claim forms

The government press release is rather sketchy but the Ontario government Regulatory Register is more specific on the proposed changes. First there would be an amendment to Reg. 283/95 to provide insurers with the ability to examine a claimant under oath, where this is necessary to determine which insurer should be responsible for coverage. This would be in addition to the right for an examination under oath that now exists under section 33 of the SABS. The SABS requirement is limited to matters related to entitlement to benefits.  The SABS provision is an anti-fraud measure but currently insurers sometimes use it to determine liability and therefore no longer have access to an examination under oath to determine entitlement.  A new provision in Reg. 283/95 will resolve that problem.

The government will also amend Reg. 7/00 to expand business practices that would be considered an unfair or deceptive acts or practice. In the future it will include when providers charge insurers much more for goods or services than the ordinary retail price.  This provision is currently covered by a Superintendent's Guideline.  A further amendment will ban the practice of having claimants sign blank claim forms.  

Lastly the government has signalled that it will also amend Reg. 7/00 to clarify the exemption for lawyers and paralegals in the unfair or deceptive acts or practices regulation applies to lawyers and paralegals only when they are acting in a legal capacity.  This means that lawyers will continue to be regulated by the Law Society of Upper Canada when they act in a legal capacity.  However, if a lawyer is an owner of a clinic and not acting in a legal capacity, then any business practice that is in contravention of the Insurance Act would be subject to regulatory action by FSCO.

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