Independent Bill Review (IBR) Versus Lien Filing

Prior to Senate Bill (SB) 863, a medical provider engaged in a billing dispute with a claims administrator was limited to filing a lien with the Workers’ Compensation Appeal Board (WCAB) in order to determine entitlement to the amount initially billed. However, SB 863 established a new means of dispute resolution – the Second Bill Review (SBR) and IBR – to expediently decide billing disputes where the only issue is the amount to be paid for the medical service provided. If the medical service is covered by a fee schedule adopted by the Division of Workers’ Compensation (DWC), for example treatment under the Physician Fee Schedule or an evaluation under the Medical-Legal Fee Schedule, or set forth in a contract for reimbursement (Labor Code section 5307.11), then SBR and IBR must be utilized to resolve the dispute within a matter of weeks, as opposed to possible years under the WCAB lien system.

However if a claims administrator has contested liability for the bill for any issue other than the reasonable amount payable for services, then that threshold issue must be resolved before the matter can go to IBR. For example, if there is a liability dispute, such as whether the claim itself or the service is compensable, that dispute must be decided prior to proceeding to IBR and the time for making a request for IBR is extended until the resolution of the dispute is final. Thus there is a tolling of the statute if liability is contested, until that issue is resolved. A provider has 30 days from the date of the resolution of the contested issue or the date of service of a WCAB order finding in favor of compensation to make the request for IBR (Labor Code section 4603.6(a) and California Code of Regulations, title 8, section 9792.5.7(c)(4) and (5)).

By contrast, the limitations period to file a lien is much different. For services provided on or after July 1, 2013, a provider who wishes to protect a claim by filing a lien must file it within 18 months of the date of service, or is foreclosed from enforcing the lien (Labor Code section 4903.5). Currently, unlike with IBR, there is no corresponding provision tolling the statute of limitations if there is a liability dispute or threshold issue which requires resolution.  This inflexible statute of limitations for filing a lien, as opposed to an IBR application, creates an ambiguity as to which dispute resolution path should be followed if a liability dispute might extend past the 18-month time limit for filing a lien (Labor Code section 4903.5).

The dual track IBR and lien processes and the differing statutes of limitations means that a service provider may be at risk of missing a statute of limitations and the ability to collect for the service. Hence the question: Should a medical provider in a billing dispute with a claims administrator file an application for IBR, file a lien with the WCAB, or file both?

To answer this question, providers need to ask themselves two preliminary questions:

  1. Is compensability for the underlying claim disputed by the claims administrator – that is, is there a dispute beyond just the amount payable for service as to whether the injury or specific treatment is compensable as a worker’s compensation injury?
  2. Is the medical treatment service covered under a DWC fee schedule or reimbursement contract and therefore eligible for IBR? The Official Medical Fee Schedule (OMFS) covers most services clearly identified as “medical treatment”. However, some procedures, especially newer ones, may not be identified as covered services. It may also be unclear whether OMFS definition of a specific medical procedure includes the particular service provided.

Depending on the answers to these two questions, the medical treatment provider should proceed as follows:

  1. If there is admitted liability for the injury and body part being treated, and the medical treatment is described in the OMFS or a contract for reimbursement, the medical provider should file for IBR if there is a dispute as to the amount owed under the OMFS or contract. Filing a lien in such situations is unnecessary and overloads the system with erroneous filings.
  2. If there is admitted liability for the injury and body part being treated, but the medical treatment is not described in the OMFS, and there is no contract for reimbursement, the medical provider should file a lien within 18 months of the date of service. If the medical service provided is not covered under a fee schedule adopted by the DWC, and there is no contract for reimbursement, then the matter is not eligible for IBR and the provider’s only recourse is to file a lien. There is no need to file for IBR because the body part is not covered under compensable services listed in the OMFS that can be paid through IBR.
  3. If there is no admission of liability for the injury or body part being treated, or it cannot be determined with certainty that the medical treatment is covered under a DWC fee schedule or a contract for reimbursement, the provider should file both a timely lien and IBR request, eliminating the risk of running afoul of the lien statute of limitations, and protecting the provider until all these issues are decided.

While filing both a lien and IBR application eliminates the risk of violating the statute of limitations for lien filing, it does require the provider to pay two filing fees: $150 for the lien (Labor Code section 4903.05), and $195.00 for IBR.

If the provider prevails in the dispute in the IBR forum, the filing fee is recoverable. If it is determined the application is ineligible for IBR, the provider is entitled to a refund of $145.50. Unlike the IBR fee, the lien filing fee is only recoverable if the provider meets the conditions of Labor Code section 4903.07 (i.e., making a timely and complete written settlement demand prior to filing the lien, defendant failing to timely accept, and a final award in the provider’s favor in an amount equal to or in excess of the settlement demand.)

Finally, irrespective of the legal avenues available to resolve disputes, both medical providers and claims administrators should remember that workers’ compensation policy requires good faith negotiations to expeditiously resolve disputes without pre-conditions such as proof of lien filing or lien payment.

Each situation is different and it is always the best practice to contact a legal professional to address your specific circumstances.

April 2016