Tuesday, October 25, 2011

CA Copy Service Fee Schedule a Smart Move

Readers from states other than California always marvel at the odd customs, practices and laws governing workers' compensation in the Golden State.

So I'm sure there's some chuckling outside of the state's borders when reading about the latest debate - a fee schedule for photocopy services.

I don't know about the practice of obtaining medical and employment records in litigation outside of California because I've never practiced law outside of the state, but the ability to get prior records of an injured worker that is litigating in the work comp system is a critical piece of the puzzle.

It all comes down to "substantial evidence" - whether the proffered evidence can be deemed sufficiently reliable in the face of other information to support an award of benefits, or the denial of benefits.

In California practice, the general strategy of the applicant side upon case intake is to question the injured worker about the injury, prior medical, prior cases, employment history, etc. then set about to procure records that would support the story. Hopefully the applicant is an accurate, truthful historian, and the records bear this out so there is no dispute later on down the road. This makes for smooth litigation.

On the defense side the practice is to review the case file upon intake in detail, noting any historical points of interest and then procuring the records to see if there are any anomalies or, if the record is solid, to know that credibility in history is not an issue.

In either case, the methodology for procuring records by the applicant side versus the defense side is different, in part because of the laws that govern discovery, in part because of contractual relationships, and in part because of custom. Applicant record procurement, governed by practices dictated by the Code of Civil Procedure and the Evidence Code, follow a more rigid, detailed procurement process due to records authentication requirements as a consequence of the timing of record procurement. The defense record procurement process is more relaxed, typically because records may be obtained prior to the initiation of litigation and thus through signed authorization rather than via subpoena.

The question raised by the new Administrative Director of the Division of Workers' Compensation (AD), Rosa Moran, is what is reasonable for copy service fees. The goal is to come up with a fee schedule to reduce disputes regarding the payment for these services. This is geared towards applicant record procurement because defense record procurement is done via contracted services whereas applicant record procurement is paid for after the fact.

And remarkably, at least from our reporting, copy services are quite in favor of a fee schedule because this will reduce disputes on payment, thus reducing collection costs and improving cash flow.

The key is that applicants must be able to procure their own sets of records because otherwise mistrust in what the defense actually provides in the discovery phase of litigation will ruin any potential cost savings.

Applicant fears are not without substance. From my prior practice years, though rare, there were occasions where the records my defense client obtained were in fact different than the records obtained by the applicant attorney, even though ostensibly both sets of records came from the same entity.

So in order for regulation of photocopy services in California work comp litigation to work, several elements must be preserved:
  1. Injured workers (applicants) must be able to procure records independently of the defense, regardless if the defense may already have those records.
  2. The regulations/fee schedule must be sensitive to the differences in the cost components of procuring records by applicants versus defense.
  3. The fee schedule needs to be based on an actual cost review with a reasonable profit component. There are several methods this can be accomplished and the AD should explore all alternatives to establish the most reliable methodology to get the best data.
The Commission on Health and Safety and Workers' Compensation (CHSWC), estimated in its 2010 Lien Report that copy service disputes account for about 17% of liens. The commission also said the amount in dispute in copy service liens ranges between about $600 and $750. 

Establishing a fee schedule for copy services should, in theory, lead to a significant reduction in lien filings and litigation at the board level.
workers compensation, work comp, injured worker

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