Friday, August 2, 2013

Why Are There Fees on Medical-Legal Liens?

The following is a guest editorial from attorney Jonathan Brissman. Mr. Brissman is a frequent instructor for WorkCompCentral Education, and is an expert on the lien process and lien laws in California workers' compensation.

by Jonathan Brissman, JD

SB863 imposed a $100.00 lien activation fee on medical treatment and medical-legal liens filed prior to 2013. Although there were many reasons cited for placing an impediment to recovery for medical treatment liens, none of the reasons applied to medical-legal liens.

The genesis for the activation fee was the Lien Report issued in January, 2011 by the California Commission on Health and Safety and Workers’ Compensation (CHSWC). Its “Recommendation 1” was “Consider reinstating a filing fee for medical and medical-legal liens [p.11].” It spoke about unmerited and frivolous liens, and the report’s Key Findings [pp.1-2] pointed out that the causes for lien filings included 1) disputes over the amount payable under the Official Medical Fee Schedule; 2) treatment charges for which authorization was in dispute; and 3) charges for treatment provided outside Medical Provider Networks.

Although the report specified that medical treatment liens comprised 60% of the volume and 80% of the costs [p.2], it did not identify the corollary figures for medical-legal liens. There were no Key Findings applicable to medical-legal liens, nor was there any assertion that unmerited and frivolous medical-legal liens were burdening the system. Indeed, the report acknowledged, “To understand the lien problem, one must understand that the majority of liens are actually medical benefit disputes [p.13].” Medical-legal liens are not medical benefit disputes.

The CHSWC Lien Report appears to have recommended that an activation-fee requirement should be imposed on both medical treatment and medical-legal liens based on affinity or convenience. It observed, “Medical treatment liens signal the greatest dysfunction in the workers’ compensation system as well as the greatest opportunity for systematic improvements [p.21]”; and “Medical‐legal claims are grouped with medical treatment both in the section 4903 list and for most lien procedure requirements [p.14].”

After discussing medical treatment, interpreter, copy service, and transportation liens, in a sweeping generalization of suspect validity, the report observed:

The remaining types of liens do not require priority attention from policymakers either because their impact is small or they do not reflect dysfunctions in the system or offer opportunities for improvement. EDD, Family Support, and Living Expenses are all conventional liens against indemnity (temporary disability [TD] or permanent disability [PD]) benefits that would otherwise be payable directly to the employee. Medical‐legal liens are relatively small in number and aggregate dollar value. Furthermore, medical‐legal liens are often mis‐categorized as medical treatment (and vice versa), so any important lessons that could be learned from analysis of medical‐legal liens will be gleaned from medical liens. The two types are lumped together in section 4903 and subsequent sections, so recommendations that will be made concerning medical liens can apply to both types [p.22].

The above statement, attempting to both distinguish and compare treatment and medical-legal liens, cannot withstand intellectual scrutiny.

None of the Key Findings regarding reasons for lien filings apply to medical-legal charges: MPN and UR are inapplicable, whether the claim is contested is immaterial, and the Official Medical Fee Schedule is irrelevant (the Medical-Legal Fee Schedule in Regs. 9793 – 9795 apply). Further, there was not even an allegation that medical-legal liens comprised any portion of the demeaningly named “zombie” liens.

When an Agreed Medical Examiner or a Panel Qualified Medical Examiner performed services, he or she did so on a contractual basis after receiving authorization from a party to address a contested claim or disputed medical issue, and after providing advance notice of the medical-legal evaluation to all parties pursuant to Reg. 10430. The AME or PQME never had any intention of providing services on a lien basis; payment was expected in the normal course of business.

CHSWC’s Lien Report recommended exemption from the activation fee for several categories of liens but lumped medical treatment and medical-legal liens together based on questionable analysis. Medical-legal liens filed prior to 2013 should be exempt from an activation-fee requirement.


  1. In a perfect world, your assertions would be correct, but that assumes that AME/QME's are 1) billing the commensurate ML CPT Codes (as opposed to up coding the "level of exam") and 2) that the the physicians (90%+ QME's) are also billing at fee schedule.

    1. Thanks Zags - indeed this is not a perfect world, but what does billing at the correct code have to do with whether or not a lien is filed versus a petition for costs? I don't see the argument.

  2. It does not matter what is billed. The report is supposed to be reviewed and paid at schedule.