Comments on Proposed WCAB Rules 10563 and 10563.1

The following public comments were submitted by Senior Counsel Anne Marie Rapolla to the Department of Industrial Relations on 9/16/14, on behalf of Boehm & Associates, in opposition to the proposed repeal of California Code of Regulations (CCR) 10240 and introduction of CCRs 10563 and 10563.1.


Boehm & Associates submits the following comments regarding proposed Rules 10563 and 10563.1.

We acknowledge the Statement of Reasons relating to the adoption of proposed Rule 10563.1 (“Other Appearances Required”), including the intent to eliminate the apparent conflict between Rule 10240 and section 10770.1 on the issue of a lien claimant’s obligation to appear at lien conferences.

However, we are concerned with regard to the provision in 10563.1(c) requiring only lien claimants with liens in excess of $25,000 to appear at all mandatory settlement conferences and trials of the case in chief when the claim has been accepted (unless excused by the WCJ) with full settlement authority.  Proposed Rule 10563.1 imposes no such requirement on defendants regarding lien settlement authority in these accepted claims before the case in chief resolves.  Rule 10240, which will be repealed and partially incorporated into proposed Rule 10563.1, at the very least provided at Rule 10240 subsection (b) “All parties shall have a person available with settlement authority at the mandatory settlement conference or lien conference….”  (Emphasis added.)

Medical treatment lien claimants in accepted claims (where the treatment related to the accepted portion of the claim) are almost always well-prepared with authority to resolve the unnecessarily longstanding non-payment issue.  It is usually the defendant who has no authority whatsoever to resolve the lien claim.

Unfortunately, it has been our experience that appearances by lien claimants at MSC’s and trials in accepted cases, particularly when the lien is in excess of $25,000, rarely result in lien resolution.  This is usually because defense counsel is without the requisite authority from the carrier to resolve the lien claim.  It is rare for defense counsel to appear at an MSC or trial of the case-in-chief with any authority (or access to authority) to resolve the medical treatment lien for an accepted claim, even when the treatment was provided on the date of injury, the medical reasonableness and necessity are undisputed, and the fully documented lien was served long ago on the appropriate parties.

Moreover, requiring lien claimants to attend MSC’s and Trials where liens are not at issue is unduly burdensome.  Board Rule 10240, which became operative November 17, 2008, requires lien claimants in accepted cases with lien claims over $25,000 to appear at MSCs.  In Southern California, cases often have multiple MSC hearings prior to the resolution of the case-in-chief, even in accepted claims.  Multiple, fruitless appearances and attempts to engage with defense attorneys who have no intention of addressing lien issues at all is a  costly responsibility to impose on  lien claimants who do not maintain a daily presence at each Board.  This requirement does little to reduce the   number of liens.

With all due respect to all concerned, the failure to resolve liens in accepted claim cases usually is not due to the  lien claimant having no authority or failing to be present at MSC’s and trials.  It is because the defendant remains unprepared and without authority to resolve the lien claim prior to the resolution of the case-in-chief, or even at the time of settlement of the case-in-chief.

Now, once again, additional burdens are being placed on lien claimants, while defendants are financially rewarded for delaying payment and engaging in protracted and unnecessary litigation regarding payment for industrial medical treatment.  There should be incentives for carriers to pay responsibly and timely for industrial treatment in accepted claims early in the case, such as the actual imposition of sanctions for failure to pay.  To the contrary, the Board is arming defendants with additional opportunities  to disallow legitimate liens while defendants face no obligation to actually deal with the lien claimants who comply with the rules and appear at these MSCs and trials.

Essentially, lien resolution at the Boards has devolved into a two-tier system, where the discovery rights of lien claimants’ (including “physician” lien claimants) are ignored, deferred or denied by carriers, defense attorneys and the Boards during the case-in-chief, and where resolution of a lien claim in an accepted case prior to resolution of the case-in-chief is the exception rather than the rule.  In fact, because even simple inquiries of lien claimants regarding the status of the case in chief are often ignored by the parties, it is sometimes difficult for the lien claimant to determine whether an applicant’s claim is accepted or denied.

At a minimum, Board Rule 10240 mandated that defendants were statutorily required to appear at MSCs with settlement authority.  Now with proposed CCRs 10563 and 10563.1 there appears to be no incentive for defendants to address liens until case-in-chief resolution.

Our comments are directed toward creating a level playing field, with the requirement that all parties be prepared to make substantial progress toward resolution of issues, including liens, sooner rather than later, and toward eliminating avoidable delays, needless appearances, and excessive demands on the limited resources of the Board.