CA Liens Are Not Black & White

It would seem that the issue of liens in the California system would not be so difficult to resolve.

Some commentators have said that no other state has liens, so they ask why are they necessary in California? Their rationale is that if the service is legitimate on a legitimate claim then it should be paid according to the fee schedule or law and if not then it won't be paid.

It is a black and white perspective.

That reasoning fails to deal with cases that are initially denied and then later admitted - usually after months, or years, of litigation - during which period the worker needs some services, whether it is medical treatment to cure or relieve the effects of the injury, medical-legal to obtain evidence to support causation (or other) legal theories, or interpreter or copy services likewise for evidentiary purposes.

SB 863 introduced significant changes to the "lien laws" in California work comp. Emergency rules were issued to implement them, and like anything done under extreme time pressure, the rules were not perfect and were not intended to be permanent. The temporary rules are for a temporary period - governing such controversies until more permanent rules could be adopted.

The Workers' Compensation Appeals Board (WCAB) is in the process of promulgating such permanent rules and yesterday held a well attended public hearing on proposed rules.

The comments received by the WCAB were predictable. Employers complain that low dollar value vendors, like interpreters and copy services, are skirting the intent (if not the black letter law) of SB 863 by filing petitions for costs.

And such vendors argue that SB 863 could not have intended to limit such low dollar value vendors because they have no alternative to getting paid.

I think that the entire industry needs to take a step back and examine a couple of fundamental questions - sort of like a decision tree.

1. Does the industry want to provide some mechanism for workers to receive services when their claims are denied for AOE/COE reasons?

a. If yes, then go to #2.

b. If no, then issue over - workers with denied claims can look to other means to get treatment and/or compensation, if any... (I offer that this is not an acceptable, nor reasonable, prospect).

2. Medical treatment during the pendancy of a decision during the first 90 days after the filing of a claim must be provided (subject to treatment guidelines) up to a limitation of $10,000 in services; does the industry want to provide for other services that may be necessary with some other, similar, limitation?

a. If yes, then go to #3.

b. If no, then:

i. workers with claims pending a decision would either have to foot the bill themselves (which would likely be in contravention to the California Constitution) or,

ii. bills from vendors that support the workers' case during this period are just paid without any further mechanism for contestation or dispute resolution (reverse of the independent bill review system).

3. Interpose some limitation on the services, type, amounts and value (i.e. fee schedules and service guidelines), that a worker can receive during the first 90 days of decision pendancy on a claim - bills that fall within those limitations get paid automatically (with self-imposed penalty for failure to pay valid bills). This results in 2 scenarios:

a. Bills that are not paid in full (or at all) because of some dispute - go to step 4;

b. Bills that are paid and there is no further dispute - game over.

4. Reverse the roles - if the payer has a dispute with a bill, then the payer can file for the contestation/dispute resolution process (and front the applicable fee) with in a prescribed time period, otherwise the bill is to be paid in full; This can be a consolidated type of hearing before a specialized review process, such as an independent service review process.

a. If the payer is found to have been correct then the vendor is penalized, and owes the payer some fee or discount.

b. If the vendor is correct, then the payer must pay the balance, and the cost of dispute resolution.

This shifts the economic burden to the party with the better resources for absorbing the cost - it also creates incentives to resolve as many billing disputes as possible - both vendor and payer have consequences that are not very palatable in losing a billing dispute.

There are also issues with services provided on accepted claims where either the body part is denied, or where services themselves are contested - I believe that the SB 863 lien solutions are pretty well crafted to deal with these situations and don't need a whole lot of refinement - some fee schedules are needed, but otherwise the vendor/payer dispute resolution process is, in my opinion, nicely handled by 863.

All parties have to recognize that they are all part of the issue. Vendors that abuse the system by providing unnecessary services at unreasonable prices are going to face objection. Payers that fail to pay reasonable bills for required services in a timely manner exacerbate friction within the system.

I'm not saying that the four step process above is the answer (and in fact would require legislation, not just regulation) - I'm just providing an alternative way of looking at the issue while final rules are being drafted to deal with liens and petitions for costs in the system.

I know there are lots of holes in this proposal, and I know that there are lots of objection to these ideas.

But it's like I tell my staff - don't make excuses, find a solution. Move forward - if something is in the way then either go around it, over it or through it, to meet the goal or objective.

If we look at what drives the "lien problem" from some different, perhaps obtuse, perspective, we may see some solutions to the more complicated issues.