Reasonable Fee? Support it with Proper Evidence

Saturday, February 1, 2003 | 0

What is the proper standard for review of a lien filed by a surgical outpatient facility in a contested claim?

The WCAB in a panel decision last year said that where standards exist for determining the reasonableness of fees, such as evidence of similar fees in the same geographical area as other providers, those standards are evidence and the hearing record must reflect consideration of such evidence.

In Herrera v. Kemper Insurance, (2002) 30 CWCR 278 (Board Panel Decision) applicant sustained an industrial injury to his and was surgically treated at the San Jose Outpatient Surgical Facility. The carrier paid a portion of the bill and the balance was protected by a lien that came to hearing on reasonableness and necessity.

The Minutes of Hearing did not reflect the recordation of stipulations and issues. Though trial briefs were to be submitted there was no indication that any documents had been received in evidence. A decision followed the hearing allowing the lien in the amount of $4500.

The WCJ in his Opinion on Decision opined that a standard controlling the reasonable value of outpatient fees did not exist, but that he considered $4500 to be a reasonable compromise after considering the arguments of the parties. Reconsideration was sought by the lien claimant on the grounds that (1) the correct standard for determining the reasonable value of its services was whether they were usual and customary and comparable to those of similar providers in the same area, and (2) that the WCJ's finding was not justified because the lien amount was less than the usual fees charged by similar providers in San Jose.

The WCJ thereafter filed an order vacating his decision which the Panel noted was invalid and void ab initio under Rule 10859 (which provides that a WCJ may rescind the decision under attack within 15 days following the filing of a Petition for Reconsideration).

Nevertheless, the Panel agreed that the order had to be rescinded because the WCJ's declaration that $4500 was a reasonable compromise was merely a conclusionary statement and did not explain the grounds on which the determination was made as required by Labor Code section 5313.

Explaining that the official medical fee schedule applies to all covered medical services provided regardless of the type of facility in which they were performed, the Panel said that if the provider of such services claims a fee in excess of the official medical fee schedule, the provider must accompany the claim by an itemization and justify the excess by an explanation of extraordinary circumstance related to the unusual nature of the services rendered. In no event, however, may a physician charge in excess of his or her usual fee.

The panel also said, though, that the official medical fee schedule does not apply to facility fees for the use of the emergency room or operating room or an ambulatory surgical center or surgical clinic but the charge must still be reasonable. To determine reasonableness, the WCAB takes into consideration a number of factors including the fee usually charged in the geographical area where the service is provided. Consequently standards were in existence for determining the reasonableness of the fees but since the record did not meet the minimum requirements of Hamilton v. Wausau Ins. Co. (2001) 66 CCC 473 (WCAB En Banc) reconsideration was granted, the decision was rescinded and the matter remanded for further proceedings consistent with the Panel decision.

The lesson for medical vendors providing services on a lien basis is that when the matter is contested you should ensure that the record reflects the receipt of evidence of the reasonableness of your fee. Failure to do so will, in the least, result in a delay in getting your money, or worse, the denial of your lien.