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Chapter 4.5. Division of Workers' Compensation
Subchapter 2. Workers' Compensation Appeals Board--Rules and Practice Procedure
Article 5. Pleadings and Forms

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§10451.1. Determination of Medical-Legal Expense Disputes.

PETITIONS

The following procedures shall be utilized for the determination of medical-legal expense disputes.

(b) For purposes of this section:

(1) “medical-legal expense” shall mean any cost or expense incurred by or on behalf of any party for the purpose of proving or disproving a contested claim, including but not limited to:

(A) goods or services expressly specified by Labor Code section 4620(a);

(B) services rendered by a non-medical expert witness;

(C) services rendered by a certified interpreter during a medical-legal examination; and

(D) all costs or expenses for copying and related services.

(2) “medical-legal provider” shall mean any person or entity that seeks payment for or reimbursement of a medical-legal expense, other than an employee, a dependent, or the attorney or non-attorney representative of an employee or dependent who directly paid for medical-legal goods or services.

(c) Medical-Legal Expense Disputes Not Subject to Independent Bill Review

(1) Where applicable, independent bill review (IBR) applies solely to disputes directly related to the amount payable to a medical-legal provider under an official fee schedule in effect on the date the medical-legal goods or services were provided. Other medical-legal expense disputes between a defendant and a medical-legal provider are non-IBR disputes. Such non-IBR disputes shall include, but are not limited to:

(A) any threshold issue that would entirely defeat a medical-legal expense claim (e.g., employment, statute of limitations, insurance coverage, personal or subject matter jurisdiction), however, for purposes of this section, a “threshold issue” shall not include a dispute over whether the employee sustained industrial injury or injury to a particular body part;

(B) whether the claimed medical-legal expense was incurred for the purpose of proving or disproving a contested claim;

(C) whether the claimed medical-legal expense was reasonably, actually, and necessarily incurred;

(D) an assertion by the medical-legal provider that the defendant has waived any objection to the amount of the bill because the defendant allegedly failed to comply with the relevant requirements, timelines, and procedures set forth in Labor Code sections 4622, 4603.3, and 4603.6 and the related Rules of the Administrative Director;

(E) an assertion by the defendant that the medical-legal provider has waived any claim to further payment because the provider allegedly failed to comply with the relevant requirements, timelines, and procedures set forth in Labor Code sections 4622 and 4603.6 and the related Rules of the Administrative Director;

(F) an assertion by the defendant that an interpreter who rendered services at a medical-legal examination did not meet the criteria established by Labor Code sections 4620(d) and 5811(b)(2) and the Rules of the Administrative Director, as applicable; and

(G) an assertion by the defendant that an interpreter was not reasonably required at a medical-legal examination because the employee proficiently speaks and understands the English language.

(2) Petition for Determination of Non-IBR Medical-Legal Dispute Filed by a Defendant

(A) A defendant shall concurrently file both a “Petition for Determination of Non-IBR Medical-Legal Dispute” and a declaration of readiness (DOR) if:

(i) the defendant has denied all or a portion of a provider's billing for medical-legal expenses under Labor Code section 4620 et seq. for any reason other than the amount to be paid pursuant to the fee schedule in effect on the date the medical-legal goods or services were provided; and

(ii) the medical-legal provider has objected to this denial or partial denial within 90 days of the defendant's service of its explanation of review on the provider.

(B) The defendant's petition and DOR shall be filed within 60 days of the provider's service of the objection on the defendant. A copy of the provider's objection and its proof of service shall be appended to the petition. The petition and DOR shall be concurrently served on: (i) the medical-legal provider; (ii) the employee or dependent; and (iii) any other defendant(s). If any of these persons or entities is represented, service shall be made on the attorney(s) or hearing representative(s).

(3) Petition for Determination of Non-IBR Medical-Legal Dispute Filed by a Medical-Legal Provider

(A) A medical-legal expense provider may file a “Petition for Determination of Non-IBR Medical-Legal Dispute” with respect to any medical-legal expense dispute not subject to IBR if: (i) a defendant breaches its duty to timely file a petition and/or declaration of readiness as required by Labor Code section 4622(c) and Rule 10451.1(e)(2); or (ii) a defendant breaches a duty under Labor Code section 4622(a) and/or (b) or the Rules of the Administrative Director at an earlier stage of the non-IBR dispute.

(B) A DOR may, but need not, accompany the petition.

(C) A copy of the petition and any DOR shall be concurrently served on: (i) the defendant(s); and (ii) the employee or dependent. If any of these persons or entities is represented, service shall also be made on the attorney(s) or hearing representative(s).

(D) A medical-legal provider is not required to file a claim of costs in the form of a lien in conjunction with the petition or DOR. However, if the provider elects to file such a lien, it must pay a lien filing fee, if applicable.

(4) Notwithstanding the filing of a DOR in accordance with the provisions of subdivisions (c)(2) or (c)(3), if there is a threshold issue within the meaning of subdivision (c)(1)(A), the Workers' Compensation Appeals Board may defer hearing and determining this issue until: (A) the issue is presented for determination in the underlying claim of the employee or dependent; or (B) the underlying claim of the employee or dependent has been resolved by a compromise and release agreement or has been abandoned.

(d) Medical-Legal Expense Disputes Subject to Independent Bill Review

(1) If a defendant has contested liability for any reason other than the amount payable under an official medical fee schedule, that issue shall be resolved prior to IBR.

(2) If a non-IBR medical-legal expense dispute is resolved in the medical-legal provider's favor, then any outstanding issue over the amount payable under an official fee schedule shall be resolved through IBR, if applicable.

(3) Any appeal of an IBR determination of the Administrative Director shall comply with the procedures of section 10957. A claim of costs in the form of a lien need not be filed, and a lien filing fee need not be paid, when a petition appealing an IBR determination is filed.

(e) Medical-Legal Lien Claims Filed prior to January 1, 2013 under Former Labor Code Section 4903(b)

Medical-legal lien claims filed prior to January 1, 2013 under former Labor Code section 4903(b) shall be subject to the lien conference and lien trial procedures of section 10770.1, subject to the timely payment of a lien activation fee, if applicable.

(f) Waiver of Medical-Legal Expense Issues

(1) Waiver by a Defendant

(A) A defendant shall be deemed to have finally waived all objections to a medical-legal provider's billing, other than compliance with Labor Code sections 4620 and 4621, if:

(i) the provider submitted a properly documented billing to the defendant and, within 60 days thereafter, the defendant either (I) failed to serve an explanation of review (EOR) that complies with Labor Code section 4603.3 and any applicable regulations adopted by the Administrative Director and/or (II) failed to make payment consistent with that EOR; or

(ii) the provider submitted a timely and proper request for a second review to the defendant in accordance with Labor Code section 4622(b)(1) and, within 14 days thereafter, the defendant either (I) failed to serve a final written determination that complies with any applicable regulations adopted by the Administrative Director and/or (II) failed to make payment consistent with that final written determination.

(B) A defendant shall be deemed to have finally waived all objections relating to a medical-legal provider's billing, other than the amount to be paid pursuant to the fee schedule(s) in effect on the date the services were rendered and compliance with Labor Code sections 4620 and 4621, if the provider submitted a timely objection to the defendant's EOR regarding a dispute other than the amount payable and, within 60 days thereafter, the defendant failed to file both a “Petition for Determination of Non-IBR Medical-Legal Dispute” and a DOR with the Workers' Compensation Appeals Board as required by Labor Code section 4622(c) and Rule 10451.1(c)(2).

(2) Waiver by a Medical-Legal Provider

(A) A medical-legal provider's bill will be deemed satisfied, and neither the employee nor the employer shall be liable for any further payment, if the defendant issued a timely and proper EOR and made payment consistent with that EOR within 60 days after receipt of the provider's written billing and report and the provider failed to make a timely and proper request for second review in the form prescribed by the Rules of the Administrative Director within 90 days after service of the EOR.

(B) A medical-legal provider will be deemed to have waived any objection based on the amount payable under the fee schedule(s) in effect on the date the services were rendered if, within 14 days after receipt of the provider's request for second review, the defendant issued a timely and proper final written determination and made payment consistent with that determination and the provider failed to request IBR within 30 days after service of this second review determination.

(g) Bad Faith Actions or Tactics

(1) If the Workers' Compensation Appeals Board determines that, as a result of bad faith actions or tactics, a defendant failed to comply with the requirements, timelines, and procedures set forth in Labor Code sections 4622, 4603.3, and 4603.6 and the related Rules of the Administrative Director, the defendant shall be liable for the medical-legal provider's reasonable attorney's fees and costs, if any, and for sanctions under Labor Code section 5813 and Rule 10561. The amount of the attorney's fees, costs, and sanctions payable shall be determined by the Workers' Compensation Appeals Board; however, for bad faith actions or tactics occurring on or after the effective date of this section, the monetary sanctions shall not be less than $500.

For purposes of this subdivision, “bad faith” actions or tactics by a defendant may include but are not limited to:

(A) failing to timely pay any uncontested portion of a medical-legal provider's billing;

(B) failing to make a good faith effort to timely comply with applicable statutory or regulatory medical-legal timelines or procedures; or

(C) contesting liability for the medical-legal provider's billing based on a dispute over injury, or injury to a particular body part.

These attorney's fees, costs, and monetary sanctions shall be in addition to any penalties and interest that may be payable under Labor Code section 4622 or other applicable provisions of law, and in addition to any lien filing fee, lien activation fee, or IBR fee that, by statute, the defendant might be obligated to reimburse to the medical-legal provider.

(2) If the Workers' Compensation Appeals Board determines that, as a result of bad faith actions or tactics, a medical-legal provider has improperly asserted that a defendant failed to comply with the requirements, timelines, and procedures set forth in Labor Code sections 4622 and 4603.6 and the related Rules of the Administrative Director, the medical-legal provider shall be liable for the defendant's reasonable attorney's fees and costs, if any, and for sanctions under Labor Code section 5813 and section 10561. The amount of the attorney's fees, costs, and sanctions payable shall be determined by the Workers' Compensation Appeals Board; however, for bad faith actions or tactics occurring on or after the effective date of this section, the monetary sanctions shall not be less than $500.

Note: Authority: Sections 133, 4622(e)(2), 4627, 5307, 5309 and 5708, Labor Code. Reference: Sections 139.5, 4603.3, 4603.6, 4620, 4621, 4622, 4903.05 and 4903.06, Labor Code; and Sections 9792.5.5(b)(2) and 9792.5.7(c)(5), title 8, California Code of Regulations.

HISTORY

1. New section filed 9-23-2013; operative 10-23-2013. Submitted as a file and print by the Workers' Compensation Appeals Board pursuant to Government Code section 11351 (Register 2013, No. 39).

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