Issues to consider when reviewing costs of care claims
The article was written for and first published by the Canadian Defence Lawyers’ newsletter Hearsay in March 2016
As a litigation accountant, one may review and quantify several life care plans each week, both for plaintiff and defense counsel. On occasion, comparisons between reports are completed, using a ‘compare and contrast’ or ‘exception’ approach. The calculations may appear simple; present valuing the costs using actuarial estimates, taking into account discount rates, mortality and inflation. However, there are many issues to consider when reviewing these costs of care reports. It is prudent to see the overall conceptual issues, rather than merely inputting the individual values.
Abnormal” or “extraordinary” are the key words. Future Cost of Care awards encompass extraordinary or abnormal costs and expenses that will be incurred as a consequence of a plaintiff’s injuries. This differs from Income Loss awards which compensate a plaintiff for the essentials of life, namely food, clothing, shelter and transportation. Future Cost of Care claims can be the most significant component of a plaintiff’s claim for damages, especially in the case of serious spinal cord, orthopaedic, traumatic brain and paediatric injuries, especially birth incidents. The massive scale of the potential claim demands meticulous review and calculation of the Life Care Plan. Claimed expenses must be reasonable or reasonably necessary, or they may be disregarded or adjusted downwards as a consequence of the possible exaggerated and over-aggressive approach of the expert witness. Further, the Life Care Plan should be completed by someone suitably qualified, possibly a Board Certified Life Care Planner. The Life Care Planner should support their recommendations with expert medical opinions.
It is imperative to be cognizant of pre-existing medical conditions. Pre-existing medical conditions may have impacted the plaintiff, if not for the Accident/Incident. Degenerative or pre-existing conditions could include previous psychological issues, hypertension, diabetes and substance abuse. The family physicians notes and records can be a valuable tool in identifying pre-existing issues.
Mortality issues should be identified if there is evidence the plaintiff smokes cigarettes, is morbidly obese, diabetic, epileptic, para or quadriplegic, or suffers from alcoholism or other substance abuse problems. The importance of obtaining a reduced life expectancy opinion is that a shorter life expectancy reduces the claim value. Insurance companies may provide impairment ratings based on medical reports. However, this information will not typically qualify as expert evidence in Court. Instead, there are a number of qualified physicians who are experts in providing opinions on life expectancy.
There are a number of Government subsidized programs such as the Ontario Drug Program, Assistive Devices Program and Ontario Disability Support Program which may be available to a plaintiff to reduce costs. Whether these Provincial programs can be ignored on the basis that they can be modified or canceled in the future is argument. I suggest that the age of the plaintiff should be a major consideration in this argument.
Different geographic areas may have different pricing for professional services. The costs for physiotherapy, occupational therapy, speech-language pathology, psychological services may be higher or lower depending on the location. Thus, it is important to ensure that the database used by the life care planner is specific to the region.
In general, heavier housekeeping and outdoor home maintenance tasks may not endure for life, but instead, should be cut off at age 70 to age 75. The rationale is that absent the Accident/Incident, the general population characteristically does not perform strenuous tasks beyond age 75.
Be mindful of double counting of services. A common error is recommending a Rehabilitation Support Worker (RSW) at the same time as a Personal Support Worker (PSW). The PSW hourly rate is less than the RSW hourly rate, as the RSW has more training, skill and a higher level of job duties. The PSW performs safety and supervisory duties. The RSW is responsible for implementing therapy goals, assisting with multitasking, mentoring, integrating the claimant into the community, initiating completion of tasks, etc. While they may both be necessary, they should not be recommended at the same time. The Personal Support Worker hours should be deducted when the Rehabilitation Support Worker is on duty.
Only cost ‘differentials’ should be included in the claimant’s aggregate costs of care. If a plaintiff requires a hospital bed and mattress costing $3,000 as opposed to a regular bed that would have been purchased for $1,000 absent the injury, then it is only the $2,000 difference between the two beds that would be identified as a cost of care. If a paraplegic requires a van equipped with hand controls and an entry lift, it is not the total cost of the van that is to be included in the costs of care. Rather, it is the difference between the cost of the van and the cost of the automobile that the plaintiff would have purchased had he or she not been injured, less the trade-in value.
Regular services common to the general population should generally not be costed. Items such as internet service, smart phones, laptops and gym memberships could be included in this category.
In the case of regular repetitive requirements, housekeeping rates should be based on direct hire rather than agency rates. Juries, judges and the general public understand that regularly scheduled cleaning services usually involve direct hire, versus the additional costs associated with the use of an agency. Defense counsel may be able to flag excessive rates in the category of housekeeping to colour the entire life care plan as being inflated, or to question the credibility of the report.
To conclude, use common sense and take a qualitative approach when reviewing Future Cost Of Care Reports / Life Care Plans. Ignore immaterial expenditures and concentrate on the need for and costing of large value items. Reviewing the reasonableness of cost of care reports involves more than simply quantifying the requested amounts.