There has been a recent surge in workers’ compensation lien legislation in Sacramento. Governor Brown signed three bills into law that will become effective on January 1, 2017. These three bills—SB 1175 (Mendoza), AB 1244 (Gray) and SB 1160 (Mendoza)—will directly affect the rights of lien claimants and medical treaters. Boehm & Associates actively participated in the legislative process for AB1244 and SB 1160 and submitted written opposition to the originally proposed language of the two bills. In addition, Phil Boehm personally appeared at a Senate Committee Meeting to speak in opposition to AB 1244 regarding a cumulative trauma provision that was later removed through the legislative process.
Below are summaries of and links to the three bills, the regulatory changes they implement and the direct or unintended consequences their application may cause:
SB 1175 enacts a new statute of limitations for the submission of billing directly to the liable employer, workers’ compensation carrier or third party administrator. Governor Brown signed the bill into law on August 26, 2016. Effective January 1, 2017, for services provided on or after that date, Labor Code Section 4603.2 (b)(1)(B) will require that requests for payment of bills be submitted to an employer within 12 months of the date of service, or within 12 months of discharge for inpatient facilities, with an itemization of services and the charge for each service. The administrative director is to implement rules regarding the 12-month limitation, including good-cause provisions for nonindustrial injury or illness later to be found compensable. Payment will be barred if not timely submitted.
Labor Code Section 4903.5 permits the filing of a lien by non-exempt medical providers up to 18 months from the date of service or discharge. Previously, however, there was no statutory limitation covering a medical provider’s submission of billing to the employer, despite the statute of limitations governing lien filing. This new deadline for bill submission, which will bar the request for payment even if a lien is not filed, effectively narrows the window of opportunity for reimbursement for medical providers. The administrative director has not yet issued its draft of regulations to implement this legislation, including those provisions which will define good cause for exemption from this new deadline for bill submission (such as when the carrier has denied liability and has asserted that the injured worker’s injury or illness is nonindustrial).
AB 1244 was signed into law by Governor Brown on September 30, 2016 and becomes effective January 1, 2017. This measure was originally written and eventually passed as a workers’ compensation fraud prevention bill suspending medical providers from participating in any capacity in the workers’ compensation program if they were convicted of a felony, convicted of misdemeanor for Medi-Cal or workers’ compensation fraud, convicted for abuse of a patient or suspended from Medicare/Medicaid programs as well as if they lost/surrendered their license to provide healthcare.
An attempt to limit the compensability for cumulative trauma and occupational disease claims emboldened Boehm both to author a statement in opposition to the added language and to travel to Sacramento, where Phil Boehm spoke in opposition to the proposed draft. Additionally, the version of the legislation to which Boehm expressed its opposition would have prevented the payment of medical treatment bills incurred prior to the filing of the claimant’s attorney’s disclosure form. The final draft of AB 1244 received legislative approval only after the objectionable provisions were removed.
SB 1160 was approved by Governor Brown on September 30, 2016. This legislation will impose strict regulations on liens filed by non-exempt lien claimants. The bill amends Labor Code section 4903.05 for liens filed on or after January 1, 2017. Any lien claim that is subject to a filing fee will be required to be accompanied by a declaration under penalty of perjury at the time of filing, affirming that the lien is not subject to IBR or IMR and attesting to one of the following, stating that the lien claimant:
- Is the employee’s treating physician providing care through a medical provider network;
- Is the agreed medical evaluator or qualified medical evaluator;
- Has provided treatment authorized by the employer or claims administrator;
- Has made a diligent search and determined that the employer does not have a medical provider network in place;
- Has documentation that a medical treatment has been neglected or unreasonably refused to employee;
- Can show that the expense was incurred for an emergency medical condition; or
- Is a certified interpreter rendering services during a medical-legal examination or is a copy service providing medical-legal services, or has an expense allowed as a lien under rules adopted by administrative director.
Lien claimants will have until July 1, 2017, to file a declaration for lien claims filed prior to January 1, 2017. The failure to file a signed declaration will result in dismissal of lien by operation of law.
We anticipate that there may be litigation concerning the possible interpretations of the seven categories specified in Labor Code Section 4903.05 (c)(a) A through G. Boehm will educate its clients to comply with Labor Code 4903.5(c)(1).
SB 1160 additionally amends Labor Code Section 4610 to eliminate the need for prospective utilization review for emergency treatment services and medical treatment rendered for a body part or condition that is accepted as compensable by the employer and is addressed by the MTUS by a member of the MPN or HCO or by a pre-designated physician within 30 days of the initial date of injury. SB1160 also enacts Labor Code Section 4615, which stays the accrual of interest on the lien of any medical provider or physician against whom charges of criminal fraud are filed.
Boehm & Associates will continue to advocate for the rights of our clients and stands ready to assist with any difficulties and challenges that may arise.