Health Care Costs Recovery Act

Health Care Costs Recovery Act

The Health Care Costs Recovery Act, [SBC 2008] Chapter 27 (the “Act”), came into force on April 1, 2009. The Act allows the Ministry of Health Services to recover all health care costs paid by government related agencies, such as MSP, on behalf of a beneficiary (a plaintiff), in respect of an injury that was caused by the wrongful act of a third party (a defendant), but only where that wrongdoer was not insured by the Insurance Corporation of British Columbia (“ICBC”) at the time.

The Act obliges plaintiffs, defendants and their respective counsel in the action to take special steps in the course of initiating, litigating and settling personal injury claims.

What claims are included: The obligations under the Act arise where there is any negligence claim involving health care costs, including but not limited to, slip and falls, boating, air and rail accidents, swimming, diving, skiing, explosion, fire, falling objects, motor vehicle accidents involving non-ICBC insured defendants and class actions.

What claims are excluded: The parties to an action are not required to make a claim on behalf of the province for any costs related to heath care services arising out of a wrongdoer’s use or operation of a motor vehicle, if the wrongdoer was “covered by the Plan”, as defined in the British Columbia Insurance (Vehicle) Act:
plan” means the plan of universal compulsory vehicle insurance referred to in section 2 and operated by the corporation under Part 1 and the regulations under that Part.
Also, there is no obligation to make a claim for heath care costs arising from injuries or illnesses that fall under the jurisdiction of WorkSafeBC or under the terms of the Tobacco Health Care Costs Recovery Act.

The Breach: A special circumstance arises where a defendant is insured by ICBC, but breaches the terms of his or her insurance at the time of the accident. Currently, the Ministry has taken the position that both the plaintiff and defendant are obligated to notify the Ministry of any action involving a personal injury claim where the defendant is in breach.

Do the obligations apply when there is no action: In short, yes. If the parties come to a settlement without commencing an action, the obligations arising under the Act still apply. The Ministry’s right of subrogation is maintained. The Act provides that no settlement is final or binding without Ministry approval and, as such, any settlement reached without appropriate notice to the Ministry is void.

Obligations: The obligations imposed on the plaintiff in a personal injury claim, and on the plaintiff’s legal representatives, are relatively straightforward:
1. To include a health care services claim for past and future health care costs in any legal proceeding.
2. To notify the Ministry of Health, in writing and in the prescribed form, of any legal proceeding within 21 days of commencement, and to include a copy of the originating documents with that notice.
3. To not settle a claim unless the Ministry is notified of the settlement terms.
4. For the defendant, there is an additional requirement in that the Ministry must give written consent to the settlement. A settlement to which the Ministry has not consented is void.

Pre-April 1, 2009 Actions: The obligations arising under the Act apply in relation to any personal injury, whether the action was commenced before or after the Act came into force (April 1, 2009); however, the requirements of sections 3 [obligation to claim], 4 [notice requirement] and 5 [final disposition] do not apply in relation to legal proceedings commenced before April 1, 2009. The requirement for Ministry approval of the settlement, however, applies.

Settlements: Section 12 of the Act requires both the plaintiff and defendant to provide written notice to the Ministry, in the prescribed form, of entering into a proposed settlement at least 21 days prior to entering into it. Failure to provide notice gives rise to consequences. Specifically, subsection 13(5) of the Act provides that the government has the right to recover, from the person required to give that notice (i.e., the plaintiff and/or the defendant), the total cost of past and future health care services related to the personal injury, as a debt due from that person to the government. The other obligations, to obtain the Minister’s written consent to the settlement terms and the actual payment to the Ministry of the settlement funds, fall solely on the defendant.

Final Dispositions: A health care services claim may not be discontinued unless the Ministry has consented and the plaintiff and defendant have provided the court with adequate proof of such consent. A court may not strike out a health care services claim unless the Minister has received notice and had an opportunity to appear and make representations. Finally, a court may not make a final order in relation to a claim unless the Ministry has received notice that a final order is pending, again putting a notice requirement on the parties.

Ministry Rights: The Act creates a right of the Ministry to subrogate to the plaintiff’s right to recover past and future health care costs. The Ministry may commence a proceeding for health care costs in its own name or in the name of the plaintiff, with or without that plaintiff’s consent. Alternatively, the Ministry may intervene or, on written notice to the plaintiff, assume conduct of the health care services claim portion of the proceeding. The Ministry now also has a separate right of appeal.

Scope: The Act covers not only past heath care service costs, but future costs. “Future cost of health care services” means the present value of the estimated total cost of all health care services that are provided, or are reasonably expected to be provided, to a beneficiary as a direct or indirect result of a personal injury described in section 2 after the date of settlement or, if there is no settlement, after the first day of trial.

Health Care Costs: The enumerated costs recoverable under the Act include:
(a) benefits as defined in the Hospital Insurance Act, which covers medical care provided at hospitals;
(b) benefits as defined in the Medicare Protection Act;
(c) payments made by the government under the Continuing Care Act, which covers long-term and facility based care needs;
(d) expenditures for emergency health services provided in respect of a beneficiary under the Emergency and Health Services Act, which covers costs such as ambulances, the fees are set out in the Act; and
(e) any other act or thing, including, without limitation, the provision of any health care treatment, aid, assistance or service or any drug, device or similar matter associated with personal injury,
I. for which a payment or expenditure is or may be made, whether directly or through one or more agents or intermediaries, by the government in respect of a beneficiary, and
II. that is designated by regulation under subsection 25(2)(b) [regulations].

The regulations provide the following cost items are also recoverable:
(a) the following services provided by the Government of Children and Family Development or the Community Living Authority:
I. At Home Program Medical and Respite Benefits;
II. Supported Child Development;
III. Nursing Support Services;
IV. Therapies;
V. Family support;
VI. Professional support;
VII. Specialized residential services;
(b) the following professional services paid for by a regional health board:
I. Nursing;
II. Social work;
III. Registered dieticians;
IV. Occupational therapy;
V. Speech pathology;
VI. Physical therapy;
(c) prescription drugs that are funded under the PharmaCare program operated by the Government of Health Services.

Case law: MacEachern v. Rennie, 2009 BCSC 652

Facts: By notice of motion dated April 21, 2009, the plaintiff sought leave to amend its statement of claim in order to add a claim under s. 2 of the Health Care Costs Recovery Act, S.B.C. 2008 c. 27 (the “Act“). In this case the total amount of the claim under s. 2 of the Act was $875,457.84. The defendants opposed the application to amend the statement of claim.

Law: The transition provisions in s. 24 of the Act stipulated the requirement in s. 3 did not apply to legal proceedings commenced before the Act came into force on April 1, 2009. Accordingly, although the plaintiff in this case had voluntarily chosen to apply to the court for leave to amend her statement of claim in order to include a claim for the past cost of health care services, she was not required to do so under the Act since the proceedings were commenced before the Act came into force.

Holding: Regardless of whether the limitation period for the government to bring a claim under s. 8(1) had expired or not, the court was satisfied that the plaintiff’s application to amend the statement of claim to bring a claim under s. 2 of the Act should be dismissed on the ground that the application was brought after the start of the trial near the end of the plaintiff’s case, and to grant the application at this late stage would unfairly disrupt the trial and would significantly prejudice the defendants.