CHSWC Draft Lien Report (California) (California) (Californi

The filing and enforcement of liens (different states refer to these with different terms) to secure payment for services or goods against a workers' compensation award is complex and filled with special rules - this category is for questions and discussion of this special area of work comp law.

CHSWC Draft Lien Report (California) (California) (Californi

Postby ymcgavin@socal.rr.com on Sat Dec 18, 2010 8:42 am

Hi WCC Forum Members:

On 12/16/10, CHSWC issued a draft of its lien report for public comment. A copy of this report can be found on the website for the DIR:
http://www.dir.ca.gov/chswc/reports/201 ... report.pdf

The authors of the report paint a picture chock full of 'gloom and doom' --- and overwhelmingly point the finger of blame at lien claimants "choking the system."

Does CHSWC accurately report why there is a problem --- or are the authors myopic? Are lien claimants solely to blame? Does the payer community have clean hands? Do the respective attorney and non-attorney representatives for defendants and lien claimants have anything to do with why this backlog persists? Are the judges partially to blame? Would strict adherence to the rules of practice and procedure of the WCAB assist in resolving the problem(s) outlined in the CHSWC report?

Although I have my own thoughts for the basis of this backlog of liens, many of which I have posted here on these forums, I'm interested in reading the thoughts of others as to why there is this chronic lien problem that has persisted for decade after decade.

York McGavin
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Re: CHSWC Draft Lien Report (California) (California) (Californi

Postby jonbrissman on Sun Dec 19, 2010 9:15 pm

The following is the response I submitted as a public comment on CHSWC's recommendation regarding the $100 lien filing fee:

As an attorney whose practice is entirely focused on representation of lien claimants in WCAB proceedings, I wish to comment on Recommendation #1, the re-establishment of a $100.00 lien filing fee for medical and medical-legal providers. I submit that it is the wrong approach for several reasons.

First, the approach appears to reflect a bias that the lien backlog has been primarily caused by lien claimants. It recommends nothing to encourage defendants to promptly review, pay, or object to lien claims, and it fails to address the part of the lien backlog caused by workers' compensation judges failing to comply with the requirements of 8 C.C.R. Section 10888. Advocating strict compliance with statutes and regulations by defendants, lien claimants, and judges would go far to reduce the backlog without placing a burden on only one class of participant.

Second, a lien claimant must wait for the case-in-chief to resolve (which could take years) before it has standing to pursue recovery before the WCAB (8 C.C.R. Section 10770.6). The $100 fee becomes an interest-free loan for the duration of the pendency of the case-in-chief plus whatever post-settlement time elapses before any recovery can be effected.

Third, it can be difficult for an injured worker on a contested claim to find a physician who is willing to treat on a lien basis. The imposition of a $100.00 lien filing fee increases the risk that physicians willing to treat on a lien basis must take, and potentially convinces some physicians to reject all such patients from their practices. CHSWC should recommend approaches that encourage physicians to provide care to injured workers.

Fourth, Imposing a filing fee will not make the liens go away. Providers will simply send their liens directly to the claims administrators rather than filing them with the WCAB. Labor Code Section 4903.1 requires parties who have been served with liens to file them with the WCAB at the time that settlement documents are submitted for approval. In 2005, when a $100 lien filing fee requirement was in effect, defendants virtually all ignored the statute -- none, to my knowledge, filed liens with which they had been served. Note that the Labor Code specifies no consequence to defendants' failure to comply with such filing requirements.

Fifth, defendants had liability to repay the lien claimant the $100 lien filing fee if any portion of the lien was found payable (L.C. Section 4903.05). Many defendants refused to voluntarily reimburse the fee when negotiating a lien resolution, thus forcing the lien claimant to litigate or just donate $100 to the General Fund. Some cases were therefore added to the WCAB's busy calendar in order to enforce the statutorily-empowered filing fee reimbursement.

Sixth, the report did not clarify whether interpreters whose liens reflect services at medical or medical-legal appointments would also be included the the filing fee requirement. (The recommendation appears to specifically exclude interpreters' "cost" liens.) It could become difficult to find an interpreter for a medical-legal appointment, for instance, if in exchange for the possibility of perhaps collecting eventually on a valid $90 fee the interpreter has to pay $100, wait for the case-in-chief to resolve, then endure the gauntlet of litigation. It will be hard to convince that interpreter that the $100 fee is not a punishment for unluckily encountering a claims administrator or defense counsel who is indifferent, indolent, incompetent, or intransigent.

I sympathize with CHSWC's goal of reducing (or eliminating) frivolous claims or disputes, but I suggest that the $100 lien filing fee disparately impacts legitimate providers with small-dollar-amount liens. Such lien claimants may lose money by trying to obtain payment to which they are legitimately entitled. The one-size-fits-all approach is not narrowly targeted at the problem lien claimants and will wreak havoc amongst righteous providers.

I am hopeful that CHSWC can devise a strategy other than a lien filing fee to weed out frivolous claims and help reduce the backlog at the WCAB. I submit that defendants' roles in creating the backlog have been ignored or under-reported, and I look forward to see some recommendations to remedy the problems emanating from that quarter.

JCB
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Re: CHSWC Draft Lien Report (California) (California) (Californi

Postby LienExaminer on Tue Jan 11, 2011 2:09 pm

Jon,

I like your analysis. I am on the defense side but still agree with the majority of what you are saying. Many liens go on much longer than they need to and the fault can be just as easily attributed to the defense as to the lien claimant.

My suggestion would be for both the lien claimant and the defense to pay the $100 fee. The lien claimant would serve their lien on the defense. The defense would have 30 days to object and why. This would require the defense to analyze the lien and determine if it should be paid or litigated. If they determine that the bill should be paid, then it should be processed for payment per fee schedule. If they determine the bill should not be paid, then they must object within 30 days and specify their objection. This would be the same objection that the defense would list on the Stip & Issues when setting for a Lien Trial. The lien claimant would then analyze the position of the defense and determine if they should proceed with litigation or withdraw. If they withdraw no one pays a fee. If they do not agree then they “officially” file their lien and address the objection made by the defense and pay the $100 fee as does the defense. Also, this way the matter can be set for trial rather than conference as both parties will have already have stated the Stip & Issues.

Just thinking outside the box a little. ;)

KD
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Re: CHSWC Draft Lien Report (California) (California) (Californi

Postby jonbrissman on Tue Jan 11, 2011 8:36 pm

Hi, KD,

While I would likely have some quibbles with the implementation, your idea is one possible solution.

It seems to me that CHSWC's strategy in proposing the reinstatement of the $100 lien filing fee was to make it onerous on medical providers in the hope that only the frivolous filers would be dissuaded. The strategy reminds me of TSA's policy of having everyone remove their shoes at airport checkpoints because of Richard Reid's hapless bombing attempt.

Public comments that are submitted in response to proposed legislation become part of the legislative record and may influence lawmakers even if the soliciting entity does not embrace them. It's too bad that the public comment period has closed -- your proposal should have been one more for consideration.

JCB
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