When is Treatment “Reasonable and Necessary”?

In Brief

• Pursuant to s 3.24(2) of the Motor Accident Injuries Act 2017 (MAIA), a claimant may only recover the cost of proposed treatment if the treatment is both “reasonable and necessary” and related to the injuries caused by the accident.
• The test for “reasonable and necessary” and the test for “related to the accident” must be considered separately.
• Proposed treatment is not “reasonable and necessary” if it will not assist the Claimant with their specific injuries and if there are more cost-effective options available.

Facts

The Personal Injury Commission (PIC) published its decision in AAI Limited t/as AAMI v Shoyeb [2025] NSWPICMP 122 on 14 March 2025.

The Claimant was injured in a motor accident on 26 November 2021.

The Claimant sought approval for MRI scans of his neck, back and right knee. The Insurer denied the request and the dispute proceeded to a PIC Medical Assessor for determination. The PIC Medical Assessor certified that the MRI scans were reasonable and necessary and related to the injuries caused by the accident.

The Insurer sought review by the Medical Review Panel.

The Review Panel’s Decision

The Review Panel accepted that any need for the disputed MRI scans was related to the motor accident.

The Review Panel concluded that the MRI scans, however, were not reasonable and necessary for the following reasons:

• The scans are not a diagnostic tool.
• The scans are not “indispensable or essential diagnostic test which cannot be done without“.
• The scans are not appropriate tests where the claimant alleges axial pain and no clear neurological signs.
• The scans are not likely to be effective because they are unlikely to alter the treatment regime of the claimant’s axial spine pain and right knee pain.
• The cost of the scans is significant when balanced with the likely limited effect.
• It is not necessary to have updated scans when the original scans were performed less than two years earlier and there was no clear alteration in the Claimant’s symptoms.

Why This Case is Important

The decision in Shoyeb provides an excellent example of two things:

• The test for whether treatment is “reasonable and necessary” is different from the test for “related to the accident“. Treatment can be related to the accident but not reasonable and necessary (and vice versa).
• The test for whether treatment is “reasonable necessary” requires the decision maker to look at whether the proposed treatment is likely to assist the claimant and whether there are more cost-effective options available.

If you have a query relating to any of the information in this case note please don’t hesitate to get in touch with CTP Insurance Principal Peter Hunt today.

Additional McCabes Resources

• MC PIC Decision of the Week
• MC MAIA Toolkit
• The Proper Lookout Podcast
• MC Ready Reckoner