Fusion confusion: A fresh test for treatment expense claims

23 February 2016

The funding of surgery in the WA workers’ compensation system represents a significant cost to insurers and self-insured companies.

On top of surgical expenses and necessary aftercare, it is commonplace that significant periods of incapacity for work follow surgical intervention. Accordingly, the approval of surgery recommended for a worker should be a decision approached cautiously and in receipt of all the necessary information.

The test for whether a medical treatment expense is compensable is contained in Schedule 1, Clause 17 of the Workers’ Compensation and Injury Management Act 1981 (‘the Act’). In order to prove an entitlement to a claimed expense, a worker must prove that the medical treatment is “necessary” and represents a “reasonable expense”.

What constitutes a reasonable expense has been considered in a range of cases. The Court has prescribed a range of relevant criteria that must guide the determination of that question. Those considerations, as approved by Compensation Magistrate Hogan in Barrick Gold of Australia Pty Ltd v Green [2003] CM-98/03 (18 December 2003), include the cost, effectiveness and likely success of the treatment, and whether the treatment is advisable, appropriate and accepted by the medical profession.

Despite the volume of law regarding the matters that ought to be addressed, the evidence relied upon by workers and their solicitors in support of claims for the funding of medical treatment is often insufficient to prove an entitlement. More recently, the WorkCover WA Arbitration Service, the District Court and the Court of Appeal (WA) have adopted a conservative approach to medical treatment disputes, with a number of claims failing due to the insufficiency of a worker’s evidence.

In late 2015, the Court of Appeal (WA) handed down two significant decisions in relation to the funding of surgical expenses. In those decisions (Napier v BHP Billiton (Worsley Alumina) Pty Ltd [2015] WASCA 230 and Hawker Pacific Pty Ltd v Lang [2015] WASCA 256), the Court disallowed the treatment claims advanced by the involved workers, and laid down a more comprehensive threshold test for workers claiming treatment to satisfy.

In Napier, the Court considered whether the artificial replacement of the worker’s C5/6 cervical disc fell within the scope of Schedule 1, Clause 17 of the Act. Lang involved the fusion of the worker’s left wrist. Both of the surgeries undertaken were provided against a background of pre-existing complaints within the relevant joints, and years after their respective work injuries occurred.

The Court formulated and outlined the fresh test in Napier, and restated and applied it in Lang.

The test, as outlined by Buss JA, has two limbs. The first limb addresses the necessary connection required between the claimed treatment and a worker’s compensable condition, while the second limb prescribes a two stage approach to determining the reasonableness of the expense.

The first limb requires that the relevant medical or surgical treatment must be by a medical practitioner for the purpose of “alleviating, remedying, curing or preventing the deterioration of:

  1. the ‘injury’ (as defined in section 5(1) of the Act) of the worker which is compensable under the Act; or
  2. a disability that is wholly or partly caused by or attributable to the compensable ‘injury’; or
  3. any symptoms or effects wholly or partly caused by or attributable to the compensable injury or a disability within par (B).”

The second limb provides that a medical or surgical procedure will be “reasonable” for the purposes of Schedule 1, Clause 17 of the Act if:

  1. “it was or is reasonable, in all the circumstances, for the relevant medical or surgical attendance or treatment to be given, provided or undertaken”; and
  2. “the amount of the expenses incurred or likely to be incurred was or is reasonable”.

The Court pointed out that reasonableness remains a question of fact. In that regard, the applicable considerations in Barrick Gold remain a good guide as to the matters to be taken into account by a decision maker.

In Napier and Lang, both claims for the funding of surgical treatment (and consequent statutory entitlements) failed because the evidence tendered did not allow the Court to find that the condition requiring surgery resulted from the workers’ respective compensable conditions. In effect, the Court said that it was not enough that pathology requiring surgery existed, placing an onus on the worker claiming the entitlement to prove that the pathology wholly or partially resulted from the original compensable condition.

Going forward

It is commonplace that a worker (or their solicitor) will ask an insurer or self-insured company to fund surgical treatment based on a vague or brief report from a treating surgeon. The Court of Appeal’s recent decisions in Napier and Lang confirm that this approach is insufficient for the purposes of the law.

The test formulated and approved by the Court in those cases confirms that claims for medical treatment expenses must be supported by proper medical evidence addressing the cause of the condition requiring medical treatment, and that the treatment is “reasonable”.

The decisions can provide some comfort to insurers and self-insured companies in determining their response to treatment claims, and provide justification for requesting that a worker obtain sufficient evidence to support their alleged entitlement. The decisions also demonstrate the value in seeking an independent medico-legal opinion addressing the cause of a condition requiring surgery, especially in circumstances where degeneration is present and some time has lapsed since a work injury was sustained.

This article was written by Matthew Thickett, Senior Associate and Andrew Davidson, Partner.

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