Author: Talin Maghakian
A rapidly growing area of litigation is surrounding medical-legal expenses in connection with workers’ compensation in California. Most of us, by now, have seen a Petition for Determination of Non-IBR Issues filed by a provider; those pesky pleadings that emerge well after a case-in-chief has long resolved. Often times these involve unpaid balances being claimed in addition to penalties and interest. Although this area of litigation is continuing to develop, this is one in which all ducks must essentially be in a row in order to successfully defend against.
In hopes of streamlining this seemingly convoluted process, here is an overview of some of the considerations that must be taken and procedures best followed in order to gain ground on these.
Is this a Medical Legal Cost?
This is essentially a threshold issue. Determining whether a service constitutes a medical-legal costs depends almost entirely on statutory law broken down here.
Per California Labor Code §4620(a), a med-legal expense is defined as a “cost or expense incurred by or on behalf of any party, the Administrative Director, or the board, which expenses may include X-rays, laboratory fees, other diagnostic tests, medical reports, medical testimony and, as needed, interpreter’s fees by a certified interpreter pursuant to Article 8…for the purpose of proving or disproving a contested claim.
In accordance with California Labor Code §4620(b), a contested claim exists when the employer knows or reasonably should know that the employee is claiming entitlement to any benefit arising out of a claimed industrial injury and one of the following conditions exists:
• The employer rejects liability for a claimed benefit.
• The employer fails to accept liability for benefits after a reasonable period of time.
• The employer fails to respond to a demand for payment of benefits after the expiration of any time period fixed by statute for payment of the indemnity.
• (Title 8 §9793) – Where the claims administrator has accepted liability for claim and a disputed medical fact exists.
It is important to note that a disputed medical fact includes the employee’s medical condition itself, the cause of it, nature and extent, OR the eligibility for rehabilitation services.
Considering the foregoing, if neither of those conditions are met, then the service cannot appropriately be deemed a medical-legal cost within the meaning of the Labor Code.
Explanation of Review
We are all pretty familiar with these and are accustomed to issuing them whenever a bill comes in and services are being paid for in accordance with fee schedule. Recent regulations, however, mandate that an Explanation of Review be submitted for all bills, not just the ones for which liability is accepted and payment is being rendered. This means that, on a denied claim, it is simply not enough to send an objection letter and will not hold muster in court.
Per Labor Code §4622, all medical-legal expenses must be paid within 60 days of receipt of the report and billing, unless the claims administrator, within this period, contests liability. If any, or even part of the bill is being contested, the objection must be submitted to the provider within 60 days of receipt by way of an Explanation of Review.
An EOR MUST include ALL of the following in order to be deemed sufficient and hold up in court.
• A statement of the items or procedures billed and the amounts requested by the provider to be paid.
• The amount paid, if any.
• The basis of any adjustment, change or denial of the item of procedure that has been billed.
• Any additional information required for a decision.
• Information on who to contact on behalf of the employer regarding dispute over payment of the bill.
• Time limit to raise any objection regarding the items or procedures paid and disputed and how to obtain an independent review of the bill.
Non-IBR Medical-Legal Disputes
Once a charge has been disputed, whether in whole or in part, the non-IBR dispute process commences and the fun begins! This is where dates and deadlines play an ever-significant role.
1. Defendant has 60 days from receipt of the documents (report and bill) in order to pay the undisputed amounts and object to the disputed portions in the form of an EOR.
2. Provider then has 90 days from the date of service of the EOR to object to the EOR. (No second review requirement for non-IBR disputes).
3. If provider issues a timely objection within the 90 day time frame, Defendant must then file a Petition for Determination of Non-IBR Medical -Legal Dispute as well as a Declaration of Readiness to Proceed (concurrently) within 60 days of service of the provider’s objection to the EOR. The pleadings must include a copy of the provider’s objection with proof of service and proper verification.
4. Failure on the part of the Defendant to file the Petition and DOR within the requisite time frame amounts to a waiver of all objections by Defendant other than the amount to be paid per OMFS.
5. Typically when the Defendant has failed to File the Petition and the DOR, the provider will do so. They are not required to, but often do so. There are no consequences if the provider does not file the DOR.
The obvious consequence for not following these guidelines is waiver of defenses and liability for the claimed balance. In addition, there may be penalties and sanctions if it is determined that failure to pay was done so in bad faith. This is something that is typically left to the judge’s discretion.
Although this may all seem daunting at first glance, taking the correct steps when a bill along with supporting documents are received can save a lot of time and costs on litigation in addition to liability for the provider’s bill. Luckily, this is also something that we as defense attorneys can help to navigate. Therefore, any uncertainties or inquiries can always be directed to them.
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