March 2013
LIEN CLAIMANTS: BEWARE OF NEW ACTIVATION FEETwo medical providers learned the hard way that California workers’ compensation judges will not hesitate to dismiss liens when there is no proof that the $100 activation fee has been paid.
Senate Bill 863 instituted a $100 “activation fee” on liens that have been filed before Jan. 1, 2013. A judge can dismiss a lien if a claimant appears at a lien conference or hearing without proof of having paid the activation fee.
Judge Donald H. Johnson of Bakersfield in January cited new Labor Code Section 4903.06 in dismissing liens filed by Psychological Centers of Beverly Hills and KVP Pharmacy.
The dismissal (only a week after the law took effect) was one of the first times a judge has cited the activation fee requirement created by SB 863 in dismissing a lien.
Bruce K. Wade, a senior administrative partner in the Bakersfield office of Mullen & Filippi who defended against the liens, told WorkCompCentral bureau chief Greg Jones that the Electronic Adjudication Management System showed no record that the activation fee was paid and listed both liens as “inactive.”
What’s more, the lien claimants didn’t appear at the conference, so they had no opportunity to show that they had paid the required fee. Because the claimants didn’t appear, the judge immediately signed the order dismissing the liens with prejudice.
While the two claimants are prevented from refilling the same lien claims, they can still object to the order. Wade said his office and the Appeals Board both notified the claimants about the conference, and he doesn’t think a challenge will succeed.
Anush Tergevorkyan, a representative for KVP Pharmacy on the case, told WorkCompCentral that she plans to appeal, citing two reasons. One, the new lien rules are confusing and secondly, the company she represents wasn’t notified about the lien conference.
There are other cases being reported, too. LexisNexis' Workers' Compensation e-Newsletter led the Monday morning issue this week with two WCAB Panel opinions in lien-dismissals due to non-payment of the new fees. One of the liens was dismissed on Jan. 2; the other on Jan. 10.
The cases were Meyer v. Target Corporation, PSI, 2013 Cal. Wrk. Comp. P.D. LEXIS (ADJ4146782) and Soto v. Marathon Industries 2013 Cal. Wrk. Comp. P.D. LEXIS – (ADJ7407927, ADJ7407928).
LexisNexis contributor David Bryan Leonard says about the Meyer decision that involves failure to pay the lien fee prior to the start of the 1/2/13 hearing, "Of particular note is the swiftness in which the laws are being applied and the lack of appreciation for subsequent efforts to issue payment."
Of the Soto case involving failure to activate a lien filed before 1/1/13, he wrote, "The WCAB panel has relied primarily on a lien activation enabling regulation, 10208, subsection (a) to interpret and apply a broader statutory requirement set forth in Labor Code Section 4903.06(a)(4). ... For the moment, it appears that a conservative lien claimant would pay the activation fee no later than two hours prior to the start of a scheduled hearing."
The California DWC issued this announcement in late February, responding to reports that claims administrators were refusing to negotiate liens unless the lien claimant had paid a new lien fee.
The DWC in a Feb. 27 Newsline warned, "Payors must negotiate in good faith with potential lien claimants - filing a lien is not a prerequisite
"The Audit Unit of the Division of Workers’ Compensation has received an increasing number of complaints from individuals and entities providing services on a lien basis in workers’ compensation claims. The complainants report that some payors have adopted a policy of refusing to discuss negotiating the provider’s liens until the provider of the services demonstrates it has filed a lien with the WCAB and paid the applicable lien filing or activation fee required by the enactment of SB 863. Such a policy is both unsupported by the plain language of Labor Code sections 4903.05 or 4903.06, and directly contrary to the legislative intent of those sections and existing law.
"If a claims administrator has reasonable grounds to contend that nothing is owed, then good faith negotiation does not necessarily require an offer of compromise. In the absence of a good faith contention that nothing is owed, however, a refusal to negotiate prior to payment of the filing fee would not be in good faith"
The Newsline explained that "Additionally, Title 8, California Code of Regulations, section 10109(e) mandates that “[a]ll Insurers, self-insured employers and third-party administrators shall deal fairly and in good faith with all claimants, including lien claimants.”
Read the Newsline at the DWC web site.
WEBINAR EXPLORES A GAP IN PAYER PROCESSES
Cost drivers in workers' compensation stem from many sources. One that is frequently overlooked is caused by a gap between the bill review system and the medical-treatment authorization process within a claims organization.
Sean Mullen, Senior Management Analyst with the County of Santa Clara, Calif., is a co-presenter. Sean has nearly 25 years of analytical and administrative support for the County of Santa Clara, including analyzing program, performance, and costs of the County’s Workers’ Compensation Division, and overseeing the medical and disability management program. He has advised other public entities on vendor selection, contract negotiation, and program performance for their medical and disability management program. He has also conduct statewide bench marking studies of public entities.
His co-presenter is Anita Breedlove, Executive Vice President with EK Health Services. She has nearly 30 years of experience in the managed care workers’ compensation industry, and has led the development of several medical bill review software systems, program management, and currently acts as an on-staff consultant for EK Health’s medical bill review team. Her experience includes serving as the program manager for various insurance companies, employers, for-profits and public entities.
This is a complimentary education webinar. You must self register before April 9.
David Langham, the deputy chief judge of the Florida Office of Judges of Compensation, has written an opinion piece in which he questions why the Florida Legislature should spend $1.1 million to staff a help desk for e-filing documents in civil cases.
The column basically says that attorneys are smart. They can figure out how to file documents electronically the same way they learn the law. They'll read a book or a manual that shows them how.
As for a prediction by one county clerk that the majority of attorneys will ignore the e-filing rule on April 1 and file paper documents, Langham scoffs.
"If e-filing saves attorneys money, they will come. If e-filing saves attorneys time, they will come. As the voice kept telling Kevin Costner in Field of Dreams, if you build it, they will come."
Read Judge Langham's article here.
Source: WCIRB data, CHSWC calculations
COST SHIFT TAKES PLACE IN CALIF. COMP SPENDING
Medical expenses weren’t the single largest cost for carriers and self-insured employers in California, according to the Commission on Health and Safety and Workers’ Compensation 2012 Annual Report.
Instead, loss-adjustment expenses have risen to become the top expense in California's workers' compensation system. The last time medical spending wasn't No. 1 was 13 years ago.
Paid dollars for calendar year 2011 show employers paid:
- $6.745 billion for loss adjustment and other expenses (38%)
- $6.672 billion for medical care (37%)
- $4.506 for indemnity benefits (25%)
The full report can be read at the commission's web site.
UPCOMING SEMINARS AND CONFERENCES ...
March 29, Sacramento: AWCP – “Nightmare Cases III: Claimants that won’t get better!” 8 a.m. to 12:30 p.m., National University, Sacramento. Four hours of continuing education for MCLEs, Nurses, Claims Examiners, WCCPs, Nurse Case Managers and State Bar Legal Specialization in Workers’ Comp. Visit www.awcp.org to learn more.
April 6, West Los Angeles: "What Judges Expect After SB 863 (Southern Calif.)". Features Presiding Judges from L.A. and Orange County DWC District offices. Plus, the associate PJ at the Oxnard board is speaking. Information and registration.
April 9, San Diego: AIP Annual Full-Day Seminar and Exhibitor Fair, 9 a.m. to 4:30 p.m. Hilton Mission Valley, San Diego. More at www.aipcalifornia.com.
April 13, Concord, CA: California Bar Worker's Compensation Section 2013 Spring Conference, 7:30 a.m. to 4:30 p.m. Concord Hilton. 6 Hours of MCLE and Legal Specialization Credits. Register online at The California Bar web site.
April 21, Los Angeles: RIMS Annual Conference & Exhibition. L.A. Convention Center. Call 213-741-1151 or visit www.rims.org.
April 26, Woodland Hills, CA: "EAMS & Liens Workshop." Led by Kristen Chavez, the IT manager for WorkCompCentral and Hosai Himmat, paralegal for Riverside law firm Heggeness, Sweet, Simington & Patrico. 1 to 4 p.m., with demonstration and tips for filers and EAMS users.
Call 805-484-0333, ext. 113/133. View details online.
May 4, Sportman's Lodge, Studio City, CA: WorkCompCentral Spring Rating Seminar. An expert panel of physicians, raters, judges and workers' comp attorneys will discuss a range of issues, arising under both SB 863 and since the passage of SB 899, which mandated use of the AMA Guides for evaluation disability in California. 805-484-0333 to register. Details.
Call 805-484-0333, ext. 113/133. View details online.
May 4, Sportman's Lodge, Studio City, CA: WorkCompCentral Spring Rating Seminar. An expert panel of physicians, raters, judges and workers' comp attorneys will discuss a range of issues, arising under both SB 863 and since the passage of SB 899, which mandated use of the AMA Guides for evaluation disability in California. 805-484-0333 to register. Details.
May 4, Shell Beach, CA: California Bar Worker's Compensation Section 2013 Spring Conference, 7:30 a.m. to 4:30 p.m. Cliffs Resort at Shell Beach. Learn more.
For more industry events, refer to the Upcoming Events calendar.
For more industry events, refer to the Upcoming Events calendar.
- The New Mexico Workers' Compensation Administration has become the 30th state to adopt evidence-based treatment guidelines. New Mexico chose the Official Disability Guidelines (ODG), which received the most support in public comments.
- Telemedicine is not very common in workers' comp, however, Nevada is considering adopting telemedicine for injured workers in remote areas of the Silver State. Telemedicine stands to be used most for medical-legal examinations where getting the patient to the examining physician poses travel and transportation barriers.
- Florida in February launched a certification program for health-care providers, which requires study and testing all done online. The certification ensures the doctors have a working knowledge of Florida's workers' compensation and occupational medical system.
- More from Florida: Suspicious insurance claims rose by 22% in that state between 2010 and 2012 and pose a continuing problem across the nation, National Insurance Crime Bureau President and CEO Joe Wehrle told a conference in Orlando in March. Wehrle said insurers reported 8,723 questionable claims across Florida in 2010 and 10,693 in 2012. He said 49% of the increases came from Broward, Miami-Dade and Palm Beach counties.
- The New York Compensation Insurance Rating Board estimates an overhaul of the state's workers' compensation system proposed by Gov. Andrew Cuomo could boost loss costs and produce up to $1.6 billion in unfunded liabilities, but nevertheless represents a net savings for the state's employers.
- The Missouri Senate gave final approval in February to legislation requiring the Division of Workers' Compensation to create an online database for businesses to check whether prospective employees have a history of filing workers' compensation claims. Senate Bill 34 by Sen. Mike Cunningham, R-Rogersville, moved to the House of Representatives for a vote in that chamber.
- Mike Nolan announced his retirement as president of the California Workers’ Compensation Institute (CWCI) effective May 1. The Institute’s Board of Directors selected Alex Swedlow, CWCI’s Executive Vice President for Research, as his successor. Nolan joined the Institute in June 2001 as president.
