The importance of obtaining prior Insurer approval for Medical Treatment
There are various restrictions on obtaining payment for the cost of medical treatment. These are specified under Section 60 (2A) of the Workers Compensation Act. The restrictions include the Employer/Insurer not being liable to pay treatment costs if the treatment or service is given or provided without the prior approval of the Insurer (unless the treatment is provided within 48 hours of the injury happening).
It is therefore essential that prior approval be sought from the Insurer before treatment expenses are incurred.
The Work Cover guidelines do provide an exemption so that prior approval is not necessary where an Insurer disputes liability for medical treatment on the grounds that the medical treatment is not reasonably necessary as a result of the injury.
There have been two recent decisions in relation to the need to obtain prior approval for medical treatment. Those are:-
1. Chris Waller Racing Pty Ltd v Muscatt 2016 NSW WCC PD57 – in that case the worker injured his back on the 13 January 2015. On the 19 January 2015 his specialist advised he should undergo immediate spinal surgery. The Employer/Insurer however demanded that the worker see a GP first, get a referral to the same treating specialist so that they could consider the situation. Without doing so, the worker, two days later, proceeded with the spinal surgery.
Subsequently the Insurer issued a Section 74 Notice denying liability for the surgical expenses on the basis that they weren’t not reasonably necessary.
Proceedings were commenced in the Workers Compensation Commission and before the proceedings were heard, the Insurer withdrew its Section 74 Notice and conceded that the surgery was reasonably necessary. They however argued that because the surgical expenses had not had prior approval as required under Section 60 (2A), they were not liable to pay the expenses.
The Arbitrator noted the absurdity of a situation where an Insurer could agree that treatment expenses were reasonable and necessary but yet declined to pay for them due to the prior approval requirement. Nonetheless in that case the Arbitrator considered that the original Section 74 Notice denying responsibility for the treatment was sufficient to comply with the Work Cover guidelines exemption even if it was later withdrawn. The guidelines simply required a denial of liability to have been made at any stage and as this was done, the medical treatments should be paid for.
2. Deans v Roderic Neil Mitchell Trading as RN Mitchell and Workers Compensation Nominal Insurer (2016) NSW WCC – in this case there was some confusion as to whether the worker was covered by a Victorian Insurer or the NSW Nominal Insurer (ICare). The Worker advised the Employer about treating specialist advice that had been received concerning the requirement for urgent surgery to minimise the risk of infection and further damage to his injuries, (which include extensive facial injuries).
The worker then proceeded with the surgery. Because the Victorian Insurer had accepted liability, ICare about two months after the injury sent an acceptance of claim letter for weekly payments. ICare however disputed liability for the surgical expenses on the basis that Section 60 (2A) operated because the surgery had been provided to the Worker without prior approval. ICare accepted that the surgery was reasonably necessary but denied liability solely on the basis that the Worker did not have prior approval for it.
The Arbitrator determined that there were in fact no issues of liability to permit the Work Cover guideline exemption to Section 60 (2A) to apply. That is, on the facts, ICare conceded the surgery to be reasonably necessary and was only relying on Section 60 (2A) to decline payment for expenses (which it otherwise conceded were reasonably necessary!)
Therefore the Arbitrator made an Award in favour of the Insurer, confirming that the Insurer was not liable to pay the medical expenses. Whilst correct, the decision confirms the ludicrous position where all involved agree that treatment was reasonable and necessary, but the Insurer escapes liability for payment.
This case confirms the importance of seeking prior approval for medical expenses, irrespective of how obviously necessary those expenses are.