Section 60(2A) - How insurers can avoid liability for claims for certain unapproved medical expenses
Section 60(2A) of the 1987 Act (introduced by the 2012 Amendment Act) provides new exceptions to the payment of reasonably necessary medical expenses under section 60.
Under section 60(2A)(a), an employer (or insurer) will not be liable to compensate an injured worker for medical treatment expenses or services without the worker having first obtained insurer approval for those expenses or services, unless they are provided within 48 hours after the injury or they are exempt treatments or services as outlined in the WorkCover Guidelines. This section applies to medical treatments or services provided on or after 27 June 2012.
Section 60(5) explicitly gives the Commission jurisdiction to deal with claims for ‘proposed’ medical treatments or services and requires the Registrar to refer such matters to an Approved Medical Specialist for a non-binding opinion on the reasonable necessity of the treatment or service. After the non-binding AMS MAC is received, an arbitrator will determine any unresolved liability dispute.
The WorkCover Guidelines for Claiming Compensation Benefits 2012 stipulate that certain medical treatment expenses or services are exempt from the need for prior insurer approval under section 60(2A) including consultations with an NTD, the first consultation with a specialist medical practitioner (or following a referral from an NTD), pharmacy expenses prescribed by an NTD or specialist during the first three weeks after an injury (to a maximum of $500.00), X-rays in the first week following an injury if referred by an NTD or specialist, public hospital expenses for emergency treatment for the first month after an injury, the first eight physiotherapy, osteopathy or chiropractic consultations and the first five consultations with a psychologist or counsellor (where certain other conditions are met). Up to five sessions of remedial massage and an initial hearing needs assessment for workers who have been assessed with at least 6% binaural hearing loss, are also exempt.
Application of exemptions
The Guidelines state the above treatments and services are only exempt under section 60(2A) when provisional liability for medical expenses has been accepted, or, liability for the claim has been accepted. Thus, if liability for the injury or provisional liability for medical expenses in respect of the injury, have not been accepted, these exemptions will not apply and prior insurer approval will be required for such treatments and services.
In summary, despite the limitations on liability for medical treatment expenses or services set out in section 60(2A), many reasonably necessary medical treatments or services an injured worker would ordinarily require as a result of a workplace injury, in the first few weeks or months after an injury, such as consultations with his or her NTD, pharmacy items in the first three weeks after an injury and initial x-rays, are exempt if the insurer has accepted liability or provisional liability. However, many of the exempt categories of medical treatments or services do have limitations in terms of the number of treatments available and the time within which the treatment or service must be provided. In the case of pharmacy items, the total cost is capped.
In Sara v Sealed Air Australia Pty Ltd (004904/13 – 23 July 2013) (“Sara”) a matter heard by way of expedited assessment before Delegate to the Registrar Paterson, Bartier Perry successfully argued the Commission does not have jurisdiction to determine claims for incurred medical services or treatment expenses (received since 27 June 2012) where the insurer has not provided prior approval for those services or treatment.
In reaching his decision, the Registrar’s Delegate confirmed his earlier decision in McIntosh v Impact Scaffolding Pty Limited (012903/13 – 12 April 2013) (“McIntosh”) which was the first of a series of matters dealing with the application of section 60(2A).
In McIntosh, Registrar’s Delegate Paterson held section 60(2A) limited the jurisdiction of the Registrar under an interim payment direction. The Registrar’s delegate said at paragraph 71:
I am not aware of any amendments to the Guidelines to exempt the Commission or the Registrar from the operation of section 60(2A).
Interaction between section 60(2A) and section 60(5)
There is some tension between the new section 60(2A) and section 60(5).
The decision in McIntosh suggests the Commission may not have jurisdiction to order payment of proposed future, non-exempt medical treatment expenses to be provided after 27 June 2012, where prior approval has not been given. However, while this issue will be the subject of a test case decision, probably in the next 12 months, we doubt that section 60(2A) will be held to apply to claims for proposed future medical expenses where the insurer has refused to provide approval.
In Sara the worker claimed reimbursement for past chiropractic treatment and travel expenses to collect medication. There was no dispute between the parties that the expenses were incurred after 27 June 2012, that none of the expenses were exempt from section 60(2A) and that the insurer had not provided prior approval to the worker to incur the medical treatment expenses. However, the worker submitted the matter should be dealt with under section 60(5) of the 1987 Act.
The Registrar’s Delegate found section 60(5) did not apply to the worker’s claim because the treatment which he had claimed had already taken place. He said at paragraph 27:
“I am also not satisfied the applicant has provided sufficient evidence for this matter to be characterised as a “future medical” dispute pursuant to Section 60(5)”.
Based on some comments made by the Registrar’s Delegate in Sara and the language used in the two provisions, it seems unlikely section 60(2A) will apply to limit the Commission’s jurisdiction to deal with claims for future or continuing medical treatment expenses under section 60(5) of the 1987 Act. However, the interaction between section 60(2A) and section 60(5) should be determined in a Deputy Presidential decision in the next 12 months.
Under the new section 60(2A), employers may avoid liability to pay for certain reasonably necessary medical treatment expenses and services which, prior to the amendments, may have been reimbursed as a matter of course. Insurers should therefore consider applying the new section 60(2A) in relation to all claims for medical treatment or services received on or after 27 June 2012, except for treatment received within 48 hours of a compensable injury being sustained and treatments exempted under the 2012 WorkCover Guidelines (see pages 28-30). However, it is doubtful section 60(2A) will extend to requests for proposed future medical treatments or services. Otherwise, section 60(5) would presumably have been repealed by the 2012 Amendment Act.
In short, section 60(2A) will punish workers who go and incur treatment expenses without obtaining prior insurer approval or after a request for approval has been rejected. Insurers will not be liable for any such non-exempt treatment expenses incurred on or after 27 June 2012 without prior approval. However, if workers defer the desired treatment and bring a claim in the Commission under section 60(5) seeking an order that the employer (insurer) pay for the proposed treatment, then they will probably reduce section 60(2A) to a “temporary roadblock” provision in the majority of cases.