For those unfamiliar with this piece of California culture, the brief description is that when a person or entity provides services or goods to an injured worker under the state's work comp laws that person or entity may file a claim for payment before the Workers' Compensation Appeals Board (WCAB) and request judicial intervention.
The original purpose of this procedure was well intentioned, of course, but over time has become the subject of abuse by profiteers either unsatisfied with, or unwilling to accept, the "reimbursement". The "lien claimant" has a right to a day in court, and this right has resulted in a log jam, particularly in the Southern California venues to the point where the Los Angeles District Office is reporting that more than one quarter of all hearings concern lien claims.
Obviously this impedes the ability of injured workers to obtain hearings on their cases.
There have been many proposed and attempted solutions through the years, from local procedural maneuvers to legislative action. What has been lacking though is a study to identify exactly what the underlying problem is - so far all remedies have been based on anecdotal evidence resulting in solutions that address the symptom, but not the disease, and consequently the disease festers growing larger over time.
SB 863 is another example of an attempt to bandage the symptoms without addressing the disease (see WorkCompCentral story "Senate Committee Passes Lien Bill: WEST [2011-04-29]").
SB 863 by Sen. Ted Lieu, D-Torrance, requires liens be put in writing and creates a statute of limitations for filing liens. Under the bill, liens for services performed after July 1, 2012, would have to be filed within 18 months. Liens have to be filed within three years for services performed before that date.
The bill attempts to address liens filed by collection companies which buy bills from medical offices and then attempt to strong-arm payment from payers for any net difference between the billed amount and the fee-schedule adjusted paid amount by going to court.
Testimony before the California Senate Labor and Industrial Relations Committee provided anecdotal evidence that collection companies are the culprits behind system clogging lien claims, but the lien claim system is much more complex than just collection companies. Liens can be filed by the Employment Development Department to get reimbursed for unemployment or disability benefits that should have been the subject of work comp indemnity. Small service bills, such as for obtaining medical records during the discovery phase, are a source of liens, as are county district attorneys offices seeking reimbursement for child support services. There are many different lien claims made against an injured worker's case - not just by collection companies for medical billers.
SB 863 will do nothing to stem the flood of liens, and in fact may make things worse by constricting the time limits by which liens can be filed. There already is a statute of limitations on the books for the filing of liens - a product of the last "reform" wave. What happened as a consequence is that more liens were filed in order to meet the time limitions. So rather than reduce lien litigation the statute of limitations actually increased lien litigation.
I fear that SB 863's statute of limitations will only do the same, but make it even worse because of the compressed time limitations contained in the bill.
If the legislature was truly interested in stemming the filing of liens that are inappropriately being filed it should first fund a study that scientifically and thoroughly deduces the underlying issues of lien claims; i.e. study and deal with the disease, not the symptoms. Until then no legislation, regulation or local procedure will be effective in removing this litigation tactic.