03/30/09
March 27, 2008
 California Senate Bill 403 proposes to change the statutory filing deadline outlined in Labor Code § 4903.5 and as interpreted by Workers' Compensation Appeals Board decisions. Currently the statute has allowed a “tolling” of the six months to file a lien after the case between the employer and injured workers is resolved, meaning that the six months is extended until the medical provider receives notice of the case settling.
The proposal would limit the statutory filing time limit to one year from the date the medical provider receives an EOB /EOR or objection to its medical bill, with the proposal that the bill be retroactive.
The effects of such a proposal are both severe and significant.
1. Every medical provider who treats an injured worker would have to create a policy that whenever they receive an EOB or objection by the insurance carrier they would have to file a lien if the bill is not properly paid, regardless of the additional amount owed -- whether it be $10.00 of $100,000.00 -- to protect its interest, regardless of the potential for settlement. This would result in a floodgate of liens filed and mass confusion at the WCAB, and may break down and defeat the intent of the statute. Normally a majority of medical bills are resolved without filing a lien; therefore, the lien process at the WCAB would increase tenfold, taking away resources allocated to the injured worker.
2. It was not the fault of the medical providers that old outstanding lien claims are being filed years after the case resolved. It has been the responsibility by law for the defendants to serve medical providers with the settlement documents, which they did not always do for whatever reason. So the proposed bill, in fact, rewards the wrongful conduct of the insurance companies. The retroactive effect of this legislation may result in the loss of millions of dollars that have not been paid to medical providers.
3. Another significant detriment if SB 403 passes would be to injured workers. The proposal in effect creates an organizational nightmare for hospitals, clinics and other medical providers in that they would have to train their staff and set up a system that would allow them to protect the medical bills. By complicating the collection of medical bills in workers' compensation and making it so difficult that even the most diligent of medical providers would forego treating industrial injury patients, SB 403 would further reduce the number of medical providers willing to treat injured workers. In many instances, at the time of payment to the medical provider, the provider does not know if they have been incorrectly paid under the fee schedule.
The legislation may create a flood of lien filings to an already overwhelmed system in order for the medical providers to protect their claim.
If you have any questions contact State Senator John J. Benoit 37 District, the sponsor of the bill, at (916) 651-4037.
This blog was written by Reid L. Steinfeld, Esq.,
In-House Counsel for Grant & Weber
and Richard J. Boggan, J.D.
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