Thursday, April 4, 2013

Debate on Liens vs. Petitions Belies Reasonableness

One of the big legal arguments going on now in California as a result of SB 863 is who exactly becomes subject to a lien filing or activation fee.

More precisely stated, must interpreters and copy services file a lien, and thus pay either the filing or activation fees? Or can they simply file a petition for costs and avoid the fees?

The convolution of the Labor Code and its interpretive regulations, and the manner in which SB 863 was drafted, complicate what otherwise should be a simple answer.

The drafters of SB 863 did no one any favors by painting all lien claimants into a single category in the minds of the public - if you filed a lien then you were dirt.

I've called into question in the past the statistics that were bandied about in the lien filing fee argument, and I've called into question the motivations for this new law.

In the past attempt to impose a filing fee on lien claimants it was discovered that the Division of Workers' Compensation was woefully unable to account for, or collect, those fees. The practice was abandoned by the DWC before it was legally deactivated.

SB 863 reintroduced those fees, and those dealing with EAMS JetFiling have felt the pain of DWC's implementation of fee collection electronically.

And, of course, there is some question as to whether those fees are even legal.

Regardless, the vendors who are most impacted by the filing and activation fees are those with low value bill - interpreters and copy services. These vendors' bills are usually in the low to mid hundreds of dollars - so a one hundred dollar filing fee may be up to half the value of the underlying bill.

No reasonable business person is going to pay one hundred dollars, that can't be recovered unless thousands of dollars are spent in litigation, to collect two hundred dollars. So a petition for cost fits the business models of interpreters and copy services nicely.

Then again, maybe the intent of the filing fees was to starve out low dollar vendors.

The defense community's answer to petition for costs is that if it smells like a lien, tastes like a lien, looks like a lien - it must be a lien.

They question why, in the past, did a vendor not file a petition for cost instead of a lien when the do so now?

The answer to that question is simply culture - filing a lien was how it was done and no one questioned the practice. In fact, my guess is that if a vendor had filed a petition for costs in the past, doing so would have been called into question.

A few days ago I posted some vignettes and some extrapolated statistics demonstrating what, anecdotally, seems to be a more common practice than not - payers' unreasonable delays and denials. I don't have any data, but it seems to me that ever since Labor Code section 5814 was eviscerated by the Schwarzenegger Administration reforms that payer accountability towards benefit payment obligations has deteriorated.

If you recall the press at that time, 5814 was vilified by the payer community as an abused, overreaching bonus payment to injured workers even when there was no true harm to the claimant.

Audit standards, methodology, and budgeting were also trimmed. Now, I argue, the DWC Audit Unit has neither the manpower nor the legal power to conduct any meaningful enforcement against payers. And the applicant attorneys have no motivation to pursue enforcement since 5814 is of limited value.

And when you get down to it, the payer community, in delaying or denying benefits, including interpreter and copy service bills, is simply doing what would be natural in the financial industry - maximizing cash flow for increased investment returns.

Petition for costs versus liens ... the truth of the matter is that neither would be an issue if payers just paid what reasonably is owed.

What is reasonable for interpreter fees and copy service fees is presently a topic under debate and research - the DWC is going to issue a fee schedule for both services.

Until then, what is reasonable is interpretive - but clearly paying nothing, or ten cents on the dollar, for legitimately incurred services is NOT reasonable.

Folks - dispute resolution starts with eliminating the dispute in the first place. If there is no dispute, then there is no need for resolution.

In the same breath, if there is no dispute then there is no lien or petition for costs.

As much as some vendors game the system with extraneous claims, some payers game the system with obfuscation and delay.

The blame game is in full deployment - vendors blame payers and visa versa.

The truth, of course, is somewhere in between.

Claim what is reasonable. Pay what is reasonable. If you can't figure that out then the DWC will have a fee schedule for you.

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