BEWARE OF FAILING TO TIMELY PAY REASONABLE CHARGES FROM MEDICAL-LEGAL PROVIDERS; LABOR CODE SECTION 4622, PETITIONS FOR NON-IBR MEDICAL-LEGAL DISPUTES, AND THE COLAMONICO CASE
GMK ALERT – Today’s News You Can Use
ISSUE DATE: Wednesday, July 1, 2020
IN THIS ALERT: BEWARE OF FAILING TO TIMELY PAY REASONABLE CHARGES FROM MEDICAL-LEGAL PROVIDERS; LABOR CODE SECTION 4622, PETITIONS FOR NON-IBR MEDICAL-LEGAL DISPUTES, AND THE COLAMONICO CASE
It can come as an unpleasant surprise to see a bill of only a fewhundred dollars mushroom into a claim for payment of a few thousanddollars, when a medical-legal provider adds not only penalties and interest, but also “costs, sanctions, and attorney’s fees” to its payment demand.
Labor Code Section 4620(a) defines a medical-legal expense as “any costs and expenses incurred by or on behalf of any party, the administrative director, or the board […] for the purpose of proving or disproving a contested claim.” Such “medical-legal expenses” can include copy services, interpreters, QMEs, and AMEs.
Labor Code Section 4622(a) requires that payment of any uncontestedservices be made by the employer or its carrier within sixty (60) days of receipt, after which time a penalty and interest accrue. Labor Code Section 4622(b) goes on to outline the process if the parties dispute theamount payable (a re-review and then the IBR process).
But what happens when the Defendant contests that no payment is due for the underlying medical-legal charges in the first place?
Labor Code Section 4622(e) requires that “if the employer contests the reasonableness or necessity of incurring these expenses,” it shall notify the provider by way of an Explanation of Review (EOR) compliant with Labor Code Section 4603.3.
Indeed, the consequences for failing to object by way of an EOR or failing to respond to a provider’s objection can become quite onerous.
Pursuant to Title 8, CCR Section 10786 (effective January 1, 2020; similar to former Section 10451.1 (repealed)), the “Defendant shall be deemed to have waived any objections to a medical-legal provider’s billing” if: (1) the provider submitted a timely objection to the defendant’s EOR, and (2) the Defendant fails to file a Petition for Determination of Medical-Legal Expense and fails to file a DOR(10786(f)).
Regulation Section 10786(i) indicates that if “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 Section 4622, the Defendant shall be liable for the medical-legal provider’s reasonable attorney’s fees, costs, and sanctions, pursuant to Labor Code Section 5813.
However, all is not lost if the Defendant fails to object, as the Board recently granted the Defendant some relief if these strict procedural requirements are not met.
On November 14, 2019, the Board issued a unanimous en bancDecision in the case of Ashley Colamonico v. Secure Transportation(ADJ9542328). (En banc decisions of the Appeals Board are binding precedent on all other cases before the Board.)
The Colamonico decision held that the medical-legal provider has the initial burden of proving that: (1) a contested claim existed at the time the expense was incurred, (2) the expenses were incurred for the purpose of proving or disproving a contested claim pursuant to Labor Code 4620, and (3) its medical-legal services were reasonably, actually, and necessarily incurred pursuant to Labor Code Section 4621(a).
Pursuant to Labor Code Section 4620(b), there is a “contested claim” when: (1) the employer reasonably knows or should know of an employee’s claim for WC benefits, and (2) the employer denies the employee’s claim outright or fails to act within a reasonable time regarding the claim.
The Colamonico decision went even further and held that the Defendant does not waive an Objection based on Labor Code Sections 4620 or 4621 by failing to raise those objections in an Explanation of Review.
GMK is particularly proud to report that Laura Beckemeyer, an Associate in our Woodland Hills office, recently obtained an Order Denying Petition at the Los Angeles WCAB in the case of Aurelio Herrera v. Oakridge Landscape, Inc. (ADJ10024471). The Judge concluded that the medical-legal provider, a professional copy service, had failed to meet its initial burden of proof, because the Subpoena Duces Tecum for the copy services issued before the claim had been denied by the carrier. Therefore, the claim was not yet “contested,” and these charges did not qualify as a medical-legal expense.
WHAT THIS MEANS FOR YOU
Upon receiving a bill for medical-legal expenses it is best to:
Promptly pay any undisputed charges within 60 days.
Issue partial reasonable payment and an EOR for any disputed charges indicating the reasons for the denial.
If the dispute relates to the amount payable, provide a Second Bill Review or Independent Bill Review (IBR).
If the dispute pertains to the underlying medical-legal expense, and if the provider objects to the EOR within 90 days, file a Petition for Determination of Non-IBR Medical-Legal Dispute and DOR within 60 days of receipt of that objection
Of course, should you require any assistance with regard to medical-legal payment disputes, it is best to discuss these issues with your attorney.
Laura L. Beckemeyer, Esq.
GMK Woodland Hills (LBeckemeyer@gmklaw.com)
Terence A. Tungseth, Esq.
GMK Brea (TTungseth@gmklaw.com)