A Guide to the Health Care Costs Recovery Act 

I.   An Overview of the Health Care Costs Recovery Act

II.  Quick Reference Guide: Timelines/Obligations Under the Health Care Costs Recovery Act   

III.  Health Care Costs Recovery Act, S.B.C. 2008, c. 27

IV. Health Care Costs Recovery Regulation and Applicable Forms:
 

    (a) “Notice of Legal Proceeding”
    (b) “Information From Insurer”
    (c) “Beneficiary’s Notice to Minister”
    (d) “Notice of Proposed Terms of Settlement”

I.  An Overview of the Health Care Costs Recovery Act

What is a Health Care Services Claim?

The Health Care Costs Recovery Act (the “Act”) came into force in British Columbia on April 1, 2009, creating rights and mechanisms that assist the government in recovering health care costs from tortfeasors.  The government’s new rights create obligations for health care beneficiaries, wrongdoers, and their insurers.   The Act is overseen by the Third Party Liability Department of the Ministry of Health Services

What is Recoverable?

The Act allows the recovery of all health care services paid by the government for the care of the beneficiary. Hospital stays (usually costing about $1,500 or more per day, but up to $4,000 per day depending on the hospital), outpatient costs (usually costing about $222 per day), and the costs of past and future doctor’s visits will constitute the bulk of any claim under the Act.   However, the definition of health care services under the Act is so broad that it covers any past or future expenditure in furtherance of the beneficiary’s care made by the government, either directly or indirectly, and specifically includes nursing costs, social work, dieticians, occupational therapy, speech pathology and physical therapy as well as prescription drugs (Health Care Costs Recovery Regulation, s. 3 “the Regulation”).   If health care services are received in another province, the B.C. government is billed for those services and they will be included in the health care costs claim.

Application

The Act will apply in relation to injuries suffered both before and after April 1, 2009 (s. 24).  The Act does not apply in relation to a personal injury or death arising out of a tobacco related wrong as defined in the Tobacco Damages and Health Care Costs Recovery Act or a personal injury or death arising out of, and in the course of, the beneficiary’s employment if compensation is available under the Workers’ Compensation Act (s. 24). 

Further, the Act does not apply in relation to a personal injury or death arising out of a wrongdoer’s use or operation of a motor vehicle if the wrongdoer has ICBC coverage.  A strict reading of this provision indicates that the Act does not apply where the wrongdoer has ICBC coverage, regardless of whether the wrongdoer also has excess insurance through a non-ICBC insurer.

Commencement and Cooperation

The Act gives individuals who receive, or could be expected to receive, health care services (“beneficiaries”) the right to recover the past and future costs of these health care services from “wrongdoers” (s. 2).

The government is subrogated to this right of recovery, and may commence legal proceedings in its own name or in the name of the beneficiary (s. 7).  A beneficiary (or their representative) who commences legal proceedings after the government has done so will have their action consolidated with the government action, unless a court orders otherwise (s. 7).

The government’s independent right to commence a Health Care Services Claim (“HCSC”) expires six months after the running of the limitation period on the beneficiary’s action or six months after the government first receives notice of the claim (s.8(5)(b)), whichever is later.  The government’s independent claim is thus governed by a longer limitation period.

However, if the beneficiary’s limitation period has expired before the Act is in force, the government cannot rely on first receipt of notice as a trigger, and must therefore commence the HCSC within six months from the running of the limitation period.

It is not a defence to this independent claim that the beneficiary’s claim for damages has been adjudicated or settled after April 1, 2009, unless that claim or settlement included a HCSC and, in the case of a settlement, the notice and approval requirements of s. 13 were met (s. 9).  The government may not bring an independent claim if the beneficiary’s claim for damages has been adjudicated or settled before April 1, 2009 (s.9).

As of April 1, 2009, a beneficiary (or their representative) who commences a legal proceeding against a wrongdoer for damages related to injury or death must include a HCSC in that proceeding (s. 3).  Further, the government may enter into a contingency fee arrangement with the beneficiary’s lawyer for 15% of the recoverable HCSC.  The government is also entitled to intervene in the proceeding commenced by the beneficiary, and may assume conduct of the HCSC upon written notice to the beneficiary (s. 6).

A beneficiary who commences a legal proceeding against a wrongdoer must notify the government of the proceeding within 21 days after its commencement, must do so in writing by using the “Notice of Legal Proceeding” Form, and must include a copy of the originating documents for the legal proceeding (s. 4).  This obligation is also imposed on counsel for the beneficiary or their representative in the legal proceeding.

If a beneficiary fails to include the HCSC in the legal proceeding, the government is entitled to amend the HCSC into the originating documents up to six months after the date on which the originating documents were filed (s. 3).  Assuming the original legal proceeding was commenced within the limitation period, nothing in the Limitation Act will prevent the inclusion of the HCSC (s. 3).

The beneficiary has a duty to cooperate fully with the government in its HCSC, including providing records or information in the possession or control of the beneficiary, providing evidence relating to the HCSC, and allowing medical examinations (s. 11).  In turn, the government is obligated to indemnify the beneficiary for any costs reasonably incurred to comply with this duty to cooperate (s. 21).

An insurer whose insured has or may have caused or contributed to a beneficiary’s injury or death must also notify the Minister using the “Information from Insurer” Form within 60 days of learning of these circumstances (s.10).  The "Information from Insurer" Form may be emailed to hlth.tpl@gov.bc.ca or by registered mail or traceable courier.  This obligation only applies to circumstances first made aware to an insurer on or after April 1, 2009 (s. 10).  Upon request from the Minister, the insurer must provide copies of one or more of the insurance policy, the police report, and any affidavit, pleadings or applications relating to legal proceedings in respect of the matter (s. 10).

Disposition and Settlement

A proceeding that involves a HCSC must not be discontinued or dismissed by consent unless the Minister’s consent is filed with the court (s.13).  The HCSC must not be set aside, dismissed or struck out unless the government has been given a reasonable opportunity to appear and make representations. 

A final order disposing of the proceedings must not be made unless the government has received both the beneficiary’s “Notice of Legal Proceeding” Form and a written notice of the application for the order of final disposition (s. 5).    Notice under s. 5 must be done in accordance with s. 8 of the Crown Proceeding Act, or by email to AGHCCRAService@gov.bc.ca. 

A beneficiary must not enter into a settlement relating to personal injury unless s/he has given notice to the government using the “Beneficiaries Notice to Minister” Form at least 21 days before entering the settlement (s. 12).  Notice must be given in every personal injury case (except for small claims cases) regardless of whether an HCSC is being made.  The “Beneficiaries Notice to Minister” Form  can be emailed to hlth.tpl.@gov.bc.ca or delivered by registered mail or traceable courier.  The Ministry has requested that a timeline for settlement should be included in a covering email or letter to insure that approval is given in a timely fashion.  

Further, a claim against an alleged wrongdoer related to the injury or death of a beneficiary must not be settled unless the person liable to make payments under the settlement submits the “Notice of Proposed Terms of Settlement” Form  to the Minister, and the Minister consents in writing to the settlement (s. 13). The "Notice of Proposed Terms of Settlement" Form  can be emailed to hlth.tpl.@gov.bc.ca or delivered by registered mail or traceable courier.  The proposed terms of settlement can be included in the covering letter or email that accompanies the form.  For proceedings commenced prior to April 1, 2009, where the proposed terms of settlement with the plaintiff/claiminat does not include a health care services claim, the Minister will accept the following wording in a release:

“It is further understood that this Release specifically excludes any claim for health care costs pursuant to the Health Care Costs Recovery Act, S.B.C. 2008, c. 27 and the regulations thereto.”

If the settlement requires court approval under the Class Proceedings Act, the liable party must submit the notice and receive the Minister’s consent before filing the application for court approval.  If notice is not given, the government has the right to recover the total amount of costs of the relevant health care services from the liable party as a debt, without apportionment for joint and several liability (s. 13).

A party liable to make payments under a settlement must submit the share attributable to the health care services within 60 days following the date of the Minister’s consent, or longer as agreed by Minister (s. 13).

Any release in relation to a claim is void (and potentially not just with respect to the HCSC) unless written notice of the terms of the release is given to the Minister by the person benefiting from the release, and the Minister consents in writing (s. 13).

Compellability and Proof

Where any of the obligations on beneficiaries, insurers, or others to provide records or information are not met, the Minister may apply to the Supreme Court for an order compelling the individual to provide the relevant records or information (s. 14).

Both the health care services and the past and future costs of the health care services that a beneficiary has received, or will receive in the future, are proven through certificates issued by the Minister.  These certificates constitute conclusive proof of the costs of the claimed health care services.

Payments and Appeals

Any judgment awarded or settlement reached in the proceeding must designate the amount that is applicable to the HCSC.  This amount constitutes a debt owed to the government.  If that debt has been recovered by or paid to anyone other than the government, that person holds that amount in trust, and must submit that amount to the Minister responsible for the Financial Administration Act within 30 days of its receipt (s. 20).

Where a judgment has not been appealed by the beneficiary within the appeal periods set out in section 14 of the Court of Appeal Act, the government may appeal the judgment as it relates to the HCSC in its own name within 15 days after the beneficiary’s appeal period expires (s. 19).

Retrospective Effect

The Act has the following effects on pre-existing injuries and actions:

1.   With respect to actions for personal injury or death settled or adjudicated prior to April 1, 2009:

(a) the government loses its right to make an independent claim; and

(b) provided the proper releases are obtained, the government’s subrogated right is extinguished.

2.  With respect to actions for personal injury or death that were filed before April 1, 2009, but have not been settled or adjudicated prior to April 1, 2009:^[1]

(a) the government probably has no subrogated right of recovery through the beneficiary if the limitation period expired before April 1, 2009;

(b) the government has an independent claim, but likely only if that independent claim is commenced within six months after the expiry of the beneficiary’s limitation period.

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