Insult to Injury: Medical-Legal Billing Collection Post-SB 863

Tuesday, September 24, 2013 | 0

Senate Bill 863 dramatically changed the conditions for unpaid and underpaid medical-legal providers. Those who rely on pre-2013 strategies will likely discover that their legitimate charges have been forever dismissed due to failure to employ the remedies mandated by SB 863. 

As counsel for many medical-legal providers, we are seeing a disturbing trend of claims administrators ignoring billings by Panel Qualified Medical Evaluators and Agreed Medical Examiners. Our clients also report systemic underpayments after a bill-review service makes an inappropriate payment recommendation. Unfortunately, it appears that a legal change that was supposed to minimize uncertainty is resulting in increased uncertainty and litigation.

Prior to 2013, medical-legal providers who encountered resistance to timely payment could simply file a lien anytime within the later of 1) five years of the date of injury, 2) one year from the last date of service, or 3) six months from the date of resolution of the underlying claim. Now, the option to file a lien at all has been drastically reduced.

Adding insult to injury, now not only do providers have to follow new restrictive and ever more expensive procedures, they have to do so in a very short timeframe.

The Injury: New Procedures for Medical-Legal Disputes

Within 60 days of receipt of a medical-legal report and itemized billing, the claims administrator must respond with an Explanation Of Review form that discloses the amount being paid, if any, and the reason(s) therefor. [§4622 & 4603.3] If the claims administrator does not provide an EOR timely, no consequence is specified.

Liability Disputes:

If the EOR denies payment for medical-legal charges based on any reason other than the amount to be paid pursuant to a fee schedule, an aggrieved provider must object to the EOR within 90 days. Upon receipt of such objection, the claims administrator must file a petition and a declaration of readiness to proceed with the appeals board within 60 days of service of the objection. [§4622(c)] Thereafter, a workers’ compensation judge will determine the merits of the dispute and affix or discharge defendant’s liability. There is no requirement for a medical-legal provider to file a lien and pay the $150.00 lien-filing fee for the WCJ to adjudicate the liability dispute. 

Fee Disputes:

Within 90 days of receipt of an EOR involving a medical-legal dispute over the amount payable per fee-schedule guidelines, a medical-legal provider who is not satisfied with the payment or denial thereof must send a written objection to the claims administrator. The consequence of failure to object within 90 days is that the billing is deemed satisfied and no further collection efforts may be pursued. [§ 4603.2(e)(1)]

The provider’s objection must request a second review and specify the disputed charge(s) and the reason(s) additional payment is due. The claims administrator must respond with a final written determination within 14 days. If the claims adjuster fails to timely respond, defendant is affixed with liability for the charges at fee-schedule rates, plus increase and interest.

If the second review does not resolve the matter, the provider must request an independent bill review (IBR) within 30 days or the bill will be deemed satisfied and defendant will have no further responsibility for the charges. [§ 4603.6(a)]

To request IBR, the provider must complete Division of Workers' Compensation Form IBR-1 and remit a $335.00 fee to the Administrative Director. If the IBR determination is that defendant owes the provider additional funds, the employer is also liable to reimburse the IBR fee to the medical-legal provider. [§4603.6(c)]

The administrative director is charged with assigning an IBR within 30 days [§4603.6(d)], and the IBR determination is mandated 60 days thereafter [§4603.6(e)]. There are limited grounds for appeal of the IBR determination within a 20-day deadline [§4603.6(f)]. Unless one of these limited exceptions apply, providers no longer have the ability to file liens when the amount of payment is in dispute. The IBR determination is final.   

The Insult: A Shorter Statute of Limitations For Liens

In addition to changing the process, SB 863 also changes when a lien must be filed, if at all. No longer does the date of injury or date of resolution of the underlying claim have any effect on the date by which a lien must be filed. If the last date of service was prior to 07/01/2013, the provider must file a lien within three years. If the last date of service was on or after 07/01/2013, a lien must be filed within 18 months. Neither defendant nor the injured worker has any liability for charges on which a lien was not filed timely. [§4903.5]  

Conclusion

On each account on which less-than-acceptable payment arrives, prudent medical-legal providers will set up a calendar system to flag the various objection and lien-filing dates. If a provider misses any deadline, its charges become forever unrecoverable.

Mona Nemat is a partner with Brissman & Nemat, a Colton law firm that represents providers in California workers’ compensation lien litigation.