A number of comments were made in the WorkCompCentral LinkedIn account regarding my blog post several weeks ago, "First Rule, Fly the Airplane". In that post I reflected that California was embarking on resolving a problem, liens, that it both didn't understand and didn't have good data on.
The comments in LinkedIn have continued. Several are from people whose business is medical billing collections in workers' compensation and I think they are illustrative of another side of the story. I present them here in edited fashion to demonstrate that the "problem" is not all about lien claimants.
Has "constructive knowledge" been eliminated with the current passing law on liens?
For example, I served my bill to the insurance company and I bill them every thirty days.
However, 20 days later, after the last billing, the case in chief settles. The Compromise and Released is signed. Our name is absent from the lien affidavit. Subsequent to the C&R, I file my lien and then my DOR.
The defendant contends that they sent us a payment and we did not object. Therefore they considered our bill satisfied.
We go to court (180 days have passed since the C&R), I tell the judge that the DA [defense attorney] knew our bill was $20,000 and they only paid $200.
DA says we got our two hundred dollars and they knew nothing of the $20,000. I tell the judge that the DA had constructive knowledge of our bills because I was sending the insurance company monthly billing.
How will the judge perceive my response with the recent changes in Workers' compensation lien law?
So the new lien law is so suppose to help how? I mean....it appears that a lot of attention will be given to settlements in order to determine when you should file a DOR.
And it would appear that insurance companies will be receiving a lot of demands for individual dates of service, if they have not paid correctly.
Furthermore, it appears that EAMS and EDEX on occasion have not provided users with the same information regarding settlements.
Since collections companies and multiple medical providers will need settlement information in order to avoid being sanctioned or their liens dismissed, then they will have to call defense attorneys and applicant attorneys.
We are completely overwhelmed at our office (even before the new lien regs), especially with the total disparity of information coming from EAMS/EDEX systems. We were notified by EDEX of a "Status Conference" coming up in July (is it a lien conference or not?). There is no such hearing for this patient in EAMS. Just trying to get ahold of the Van Nuys board takes a long time, with judge's secretary saying "Go look it up"! Do we go, not go? It's just one small case... out of hundreds for us in a month.
With regards to Constructive Knowledge, I do hope that this approach is not completely disallowed in the future. I know recent case law narrows our options considerably, but like you, we also send bills with POS [proof of service], settlement demands, and make telephone calls... only to have DA state he/she didn't know about us. We're here!
Since the passing of the recent lien legislation, I find that some insurance companies are actually saying that they are not going to pay bills. Some have gone as far to say that ‘you won’t get any money unless you litigate for it.
I am usually asked to collect on accounts that are less than a $1000. In the past, I quickly resolved such bills. But now, I find myself having to file Declarations of Readiness to proceed on very small balances.
One branch manager, at a major insurance company, asked me to prove that they had "constructive knowledge" of our lien in order to resolve the bill. I was completely flabbergasted. Maybe, what she really wanted to know was if I knew “how” to prove it. I really don't know. I am still trying to collect on the account.
On any given day, I am pressed to collect a few thousand dollars. I usually try not to spend more than a few minutes per account. Now, on a few accounts, I find myself on the phone for 20 minutes, trying to overcome "constructive knowledge" issues.
Time is of the essence in collections. And, a penny wasted in collections in Workers Compensation is money wasted. Medical collection is a fast paced environment and the new legislation has thrown a monkey wrench in the machinery.
This new legislation will eat away at the bottom line of medical providers.
It has occured to me that maybe the best thing to do at this point is to NOT file liens until close to the limit of the statute. (5 years from DOI [date of injury], or 6 mo's after C&R [compromise & release settlement agreement])--then there will be nothing to dismiss. So far, the new regs have not discussed this eventuality. Then... would this be a kicker?... the DEFENSE would have to argue Constructive Knowledge on the Provider's part, to get the non-lien disallowed.
If these regs were intended to limit "zombie liens", think of how it could backfire. We still have hundreds of cases where our providers never filed liens, and they are in our very deep "to do" stack. Maybe we should just wait... until all of the current lien litigation is over, until the carriers have sent their files back to storage and closed them out... and THEN file liens and DOR's when we are ready.
Just fyi... this is not something we plan to do. We are trying to play by the rules, and ethically. But we have at least a thousand cases in our office that will suddenly be effected by the new regs in August... all have C&R'd or settled in some other way, and all will require immediate action. We are staffing up.
We are definitely on the same page. FYI-some insurers are sending out zero checks. And the corresponding EOR [explanation of review] says that they have reviewed the bill, which they accurately reviewed, but send zero pay. And, if you ignore the check and file a DOR to protest the payment in court, then the DA can say to the judge that we didn't object. Which would mean we accepted the payment.
We may have to send a letter to the insurer notifying them we object to every date of service that they sent in a low or zero payment to protect the providers interest. Talk about time consuming. How much will I collect if I have to check every single EOB and object to it when it is a low offer? What an absolute mess.
Anecdotal, and only a couple of collections agents with their lien issues, but I think representative of "the other side."
If DWC wants to resolve "the lien problem", then strong enforcement of the rules (including penalties, sanctions, etc.) must issue against both payee AND payor. No side should be able to implement strategies that use financial strength to defeat legally indefensible obligations.