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Case summary: AAI Limited t/as AAMI v Shoyeb [2025] NSWPICMP 122 – when is treatment ‘reasonable and necessary’ in a motor vehicle accident claim? A claimant’s perspective

Published on April 7, 2025 by Tim Concannon

The recent decision in AAI Limited t/as AAMI v Shoyeb [2025] NSWPICMP 122 (Shoyeb) provides insight into the test for determining whether treatment is “reasonable and necessary” under the Motor Accident Injuries Act 2017 (NSW) (MAIA). For claimants, understanding this test is essential when seeking approval for medical treatment related to injuries sustained in a motor vehicle accident.

Legal framework: section 3.24(2) MAIA

Under section 3.24(2) of the MAIA, a claimant may recover the cost of proposed treatment only if it is both:

• related to the injuries caused by the motor vehicle accident; and
• reasonable and necessary.

These criteria must be assessed separately. A treatment may be related to the motor vehicle accident but still require further evaluation to determine if it meets the standard of being reasonable and necessary.

Background

The claimant in Shoyeb sustained injuries in a motor vehicle accident on 26 November 2021.

As part of his medical treatment management, MRI scans of his neck, back, and right knee were recommended.

The claimant sought approval for the MRIs which were denied by the insurer. The dispute proceeded to a PIC Medical Assessor for determination. The Medical Assessor initially determined that the requested MRI scans were reasonable, necessary, and related to the claimant’s injuries. The Insurer sought review of the decision by the Medical Review Panel.

The Medical Review Panel’s Decision

The Review Panel agreed that the need for the MRI scans was related to the accident but reasoned that the fundamental reason for performing a radiological investigation is to inform further management of the patient’s medical problems.  They determined that the MRI scans were not reasonable and necessary based on the following considerations:

• MRI scans are not an indispensable diagnostic tool – the Panel assessed whether the scans would provide additional information that would influence the claimant’s treatment plan.
• MRI scans are not essential for treatment planning – the Panel determined that other clinical assessments were sufficient to manage the claimant’s symptoms.
• Diagnosis – there was no stated diagnostic hypothesis being tested here based on the reports of the referring doctors.
• Cost-effectiveness – the costs was considered significant when balanced with the lack of any likely effect.
• No clear neurological indicators – the absence of neurological symptoms was considered when assessing the necessity of imaging.
• Limited impact on treatment approach – the Panel reviewed whether the results of the MRI scans would alter the claimant’s medical management.
• Previous imaging available – as prior scans had been performed within the last two years, the Panel assessed whether new imaging was required based on symptom progression.

Understanding the application of the “reasonable and necessary” test

For claimants, this case illustrates the factors considered when evaluating whether medical treatment meets the reasonable and necessary threshold. While an injury may be directly linked to an accident, further scrutiny is applied to assess whether proposed treatment is justified.

Key considerations will include:

• The medical purpose of the treatment – Whether it is required to diagnose, alleviate, or manage injury symptoms effectively.
• Alternative options available – Whether there are other approaches that achieve similar outcomes.
• Evidence supporting the treatment’s necessity – The strength of medical opinions regarding the need for the proposed intervention.

Practical takeaways for claimants

The Shoyeb decision highlights the importance of:

• Clear medical justification – treating practitioners should provide detailed reasons for recommending treatment, specifying how it will assist in managing the injury and whether a diagnostic hypothesis is being tested.
• Reviewing previous medical history – consideration should be given to recent diagnostic tests and whether additional investigations are warranted.
• Understanding the approval process – claimants should be aware of how decisions regarding medical treatment approvals are made and be prepared to provide supporting documentation.

For claimants seeking treatment after a motor vehicle accident, Shoyeb provides an example of how medical necessity is assessed. While treatment may be related to an accident, it must also meet the criteria of being reasonable and necessary. By ensuring that medical recommendations are well-supported and aligned with treatment guidelines, such as the ‘Clinical Framework for the Delivery of Health Services’ claimants can navigate the process effectively and obtain the care they require. Claimants should be aware that insurers have 10 days within which to make a decision as to whether a treatment is reasonable and necessary from the date when the treatment request was received.

Please note that this article does not constitute legal advice. If you are seeking professional advice on any legal matters, you can contact Carroll & O’Dea Lawyers on 1800 059 278 or via our Contact Page and one of our lawyers will be able to assist you. If you or a loved one have been injured, use our Personal injury Claim Check now.

Disclosure and important note: This article is based on our own legal research and thinking. Some of its content has been generated with the assistance of artificial intelligence. The authors have checked and approved this article, including the AI generated content, for publication.