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HEALTH INSURANCE, GOVERNMENT - Billing - Re-payment to the plan - Grounds for refusal - Prescription drug payment

Monday, March 19, 2018 @ 11:55 AM  


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Application by the medical dispensary for judicial review of the respondent’s decision to audit its accounts and recover alleged overpayments. The respondent was the agent of the province who administered the provincial prescription drug plan. Under the plan, pharmacies could claim dispensing fees only every 28 days per patient per drug, unless certain exceptions applied. The applicant was devoted to serving patients who were recovering from addictions, so most of its patients met the requirements for more frequent drug dispensing. The respondent conducted an audit and advised the applicant it could not substantiate $127,454 of dispensing fees claimed. The applicant responded that the only error was its pharmacists not checking the box to indicate the rationale for more frequent dispensing, and submitted corrected forms. The respondent acknowledged the discrepancies were mainly clerical errors, but confirmed its intention to recover $120,013, and had already clawed back $79,240 from the applicant. The applicant argued the respondent had acted outside its authority and unreasonably.

HELD: Application allowed. The respondent’s decision was quashed and payments were to be returned to the applicant. The respondent was an agent of the province, carrying out the province’s statutory duty, so judicial review was the appropriate remedy. Section 24 of the Prescription Drug Regulation allowed for assessment of accounts and non-payment of claims, if the Director found the services were not entitled under the Prescription Drugs Payment Act and Regulation. Audit and recovery were not provided for under the legislation. In conducting the audit and claw back, the respondent was applying its own policy. If the provisions of the Regulation were read as broadly as the province argued for, there would be no need for the respondent to create its own audit and overpayment recovery policy. The Regulation could be contrasted to the Medical Services Payment Act, which provided for deductions when medical professionals were overpaid. In this case, the respondent’s audit revealed technical errors that the applicant attempted to correct, but the respondent mostly rejected the correction and began to claw back the alleged overpayments. It was not appropriate to give a broad interpretation to the Regulation such that the respondent’s policy trumped any need for regulation. Section 24 was not to be interpreted to permit delegation of audit and recovery processes without specific legislation or regulation to that effect. The respondent acted without authority and, even if it had authority, it acted unreasonably in failing to properly review the forms when submitted and then trying to recover payments three years later on the basis of the applicant’s errors, which were essentially typos.

Cameron Street Clinic Inc. v. Medavie Blue Cross, [2018] N.B.J. No. 19, New Brunswick Court of Queen's Bench, G.S. Rideout J., January 3, 2018. Digest No. TLD-March192018001