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8.3.1 Reasonable Reimbursement

Treatment Pathway 1 provides compensation for the cost of treatment that was reasonable for the person to obtain in the circumstances.

From September 2012, a Treatment Authority letter will be issued to Treatment Pathway 1 clients setting out a specified authority for treatment of the accepted conditions.  Treatment Expectations will be available for providers which set out DVA's expectations for an appropriate level of service. These pre-treatment guides will remove the need for clients and providers to seek prior approval for the majority of primary care and allied health services.

The underlying principles for the approval of medical treatment are that the treatment:

In some circumstances it may be necessary to seek additional medical opinion from an independent Specialist before a Treatment Authority letter is issued, or approval for non-core treatment is provided.  Departmental Medical Officers (DMO) and medical or injury management advisers may also provide advice but any such opinion needs to be considered in conjunction with other medical evidence (from treating specialists, GPs, etc). It is relevant to note that the DMO is not normally a specialist and in most cases will conduct file reviews only. It is still the responsibility of the delegate to make a decision on reasonableness, taking into account the circumstances of the case.

Hospitalisation, surgery, most dental work and non-core allied health treatment (eg. hydrotherapy, homeopathy etc.) will require prior approval before admission or procedures are commenced.  More specifically:

  • Hospital and surgical treatment;
  • Non-standard dental procedures (surgery or follow-up action to normal examinations or maintenance);
  • Pain-management therapies;
  • All alternative therapies including herbalist services, homeopathy, naturopathy and iridology (though these treatments will rarely be approved);
  • Requests for gym programs or hydrotherapy (requested by any treating practitioner for the treatment of the client's accepted condition/s alone);
  • Requests for aids and appliances (including hearing aids) related to accepted condition/s alone.

Whilst all surgical procedures and most medications have risks and side effects they should not be ruled out on the basis of 'doing no harm'. This issue always needs to be weighed in conjunction with 'being clinically effective'. It is reasonable to expect that the treating practitioner has discussed this issue with the person and as such both consider it a reasonable course of action. If there is any doubt about this, clarification should be sought from an applicable adviser, or the person and the treating practitioner.

When considering costs the delegate should also take into account the potential for a reduction in future liability if the treatment is successful.  This may include a reduced level of Permanent Impairment, a reduction in future medical costs or an enhanced capacity for work.

Whilst treatment providers are not bound to adhere to any particular schedule of fees, if the fee demanded by the provider is excessive when compared to the MBS, the Repatriation Medical Fee Schedule or Comcare's schedule of fees, it is incumbent upon the delegate to ask further questions of the provider to establish the reasonableness of the cost.

Accepted clinical practice can include new or experimental procedures.  However these are often costly and the effectiveness is not always known. Delegates should exercise caution before approving such treatment. In these situations alternative treatment options should be considered along side the proposed treatment.  Advisers should be consulted when considering the nature of these treatments.

The question of reasonableness is first and foremost a medical and financial consideration, not a legal one.  Notwithstanding this, there is some case law that substantiates the principles outlined above.

In Harris v Secretary, Department of Employment and Workplace Relations [2007] FCA 404 (22 March 2007) reasonable treatment was taken to be:

  • treatment that is feasible and accessible, that is available locally at a reasonable cost; and
  • where a substantial improvement can reliably be expected where the treatment or procedure is of a type regularly undertaken or performed with a high success rate and low risk to the patient.

In the case of Harris, it was assumed that a person will generally wish to pursue any reasonable treatment that will improve or alleviate an impairment, unless that treatment has associated risks or side effects which are unacceptable to the person.

In Comcare Australia v Rope [2004] FCA 540 (7 May 2004), Stone J said that treatment 'reasonable to obtain in the circumstances' required the Tribunal to undertake a costs/benefit analysis. The Tribunal needed to weigh the benefit of treatment against the cost of obtaining it, taking into account any other treatment available.

In Comcare v Holt [2007] FCA 405 (22 March 2007) Mansfield J said it was wrong for the AAT to decide that therapeutic treatment is unreasonable only if Comcare establishes that there is alternative treatment with equivalent therapeutic benefit available at a lower cost. There may be circumstances where treatment is unreasonable because its anticipated therapeutic benefit does not justify the expense involved in the circumstances. It will be common for the reasonableness of proposed medical treatment to be assessed in the light of alternative treatment options, but that is not necessarily so. There might be cases where the cost of the proposed treatment, even if no other treatment options were available, would lead to the view that the proposed treatment is unreasonable having regard to its anticipated benefit.

He further stated that sometimes proposed therapeutic treatment will be unreasonable because there is some alternative treatment available with potentially similar benefits at a lesser cost. There may be a balancing involved where the potential therapeutic benefits are less, but the cost is significantly less. The extent to which such treatment has been undertaken in the past and the degree of its success may also be relevant. There may be cases where proposed treatment, although of therapeutic benefit, is unreasonable having regard to the extent of the anticipated benefit and the cost involved, even if no similar treatment had previously been undertaken. There may be cases where treatment, which in the past has had some therapeutic benefit, may no longer be reasonable because the extent of the therapeutic benefit no longer justifies the cost in the light of past experience.

Decisions to approve or deny treatment in Treatment Pathway 1, as prescribed in Part 2 of Chapter 6, are reviewable decisions.  That is, they are original determinations within the meaning of section 345 of the MRCA, and therefore subject to review.