Fee Schedule Puts Strong Limits on When Records May Be Ordered

Tuesday, November 3, 2015 | 0

The rules about when and how to order records from a copy service as a medical-legal expense changed dramatically on July 1, 2015, through enactment of the copy service fee schedule regulations.

Applicant attorneys who ignore these changes and continue to order records from copy services “whenever they want” are likely setting their firm up for serious financial risk further down the road. The risks are from copy services who FAIL in the next 12 to 18 months because too many records were ordered improperly. The failed copy service owner (or future owner of their liens) can petition the judges under Labor Code Section 5813 to hold the law firm accountable for accruing the services inappropriately as medical-legal expenses.

Before you dismiss this as improbable, I’ve seen judges do this on more than one occasion. In the past, copy services mostly withdrew their lien to protect the ordering party, but once a copy service starts to fail under this fee schedule, or sells their liens to another party, all bets are off. For example, I recently heard of a copy service suing a law firm in civil court because the provider had a written agreement on their order forms that the ordering party would pay the fees if not collected from the employer/carrier and that the civil court judge has already ruled against work comp as the exclusive remedy. Trust me, this is just the tip of the proverbial iceberg.

With this new fee schedule, the perfect storm may be approaching. You can certainly continue to order records from a copy service, but you have to follow certain rules if you intend to make sure the employer/carrier is responsible for the payment – and not you.

Records can only be ordered under these circumstances

After many discussions with my partner and attorney Warren P. Schneider, we’ve come to the opinion that records can only be ordered from an applicant copy service when ALL of the circumstances below are true:

• The defense has not served subpoenas for the records yet.
• The defense has not served the records yet.
• More than 30 days have elapsed since you served a written request for the records on the employer/carrier.

Keep in mind that I am not a lawyer, and this blog post is not meant to be legal advice. I am just trying to point out the obvious here, based on my 30-plus years in this business, and deep discussions on the matter with my partner, Warren.

So, there we have it. If all three of the situations above have not been met, then the law office is taking a risk by placing an order for records with a copy service… and the copy service is certainly taking a risk accepting it. The good news is that none of this is particularly burdensome or time consuming. You just have to give it some attention before you order records.

Checklist before ordering records

I suggest the law office staff go through the following steps before ordering any records on the case:

Step 1: Serve a request on the employer/carrier to provide “all records in your possession that are relevant to the injured worker’s claim.” Make sure you use a proof of service when delivering this request, and serve it on both the employer and the claims administrator/carrier. Keep a copy of this request and attach it to all copy service order forms when you incur those expenses.

Step 2: Tickler the file in your case management system to come up in 35 days (30 days plus five for mailing), which is when you will initiate the order for records.

Step 3: After Step 2 has completed (the 35 days has gone by), look carefully through the file, both in the case management system and paper files, and make sure there are no records and no subpoenas in the law office’s possession that pertain to the same locations being ordered from the copy service. If you find records or subpoenas for those same locations, don't order those records. If the other side served some records, but not from the locations you intend to order records from… and you see no notices/subpoenas for those locations, then you can still proceed with ordering those locations.

If you plan to skip the request in Step 1 altogether, assuming that CCR Section 9982 and LC Section 5307.9 do not state clearly that such a request must be made, then you should click below and read about the need for a contested claim.

The law office might consider printing and posting a checklist such as this near the staff that orders records desks in the office.

Conclusion

If you ignore these rules, your law office could be held liable in the future for all the copy service’s denied medical-legal liens, because you knew or reasonably should have known it was inappropriate to place the orders when you did. Copy services usually do not make the decision to order records on the case – the attorney does. And copy services will not usually have the facts about the claim and what is in the attorney’s file before ordering records, so it is the law office’s responsibility to know the law and manage the expenses they incur responsibly.

Let’s assume the law office allowed a cost for records to be incurred outside of the rules in the fee schedule regulations, and those costs were denied by the employer/carrier. Let’s also assume the copy service filed a lien, eventually became a party, and the judge indicated at the Lien Conference that he will deny the copy service lien based on these same grounds. All the copy service (or purchaser of the copy service’s receivables) needs to do is file a petition under Labor Code Section 5813 that requests the law firm be held responsible for the improperly ordered services (as sanctions). After service of the notice of trial on the ordering law firm, the judge may award the unpaid invoice against the applicant’s attorney who placed the order. The judge might even order additional sanctions to be paid to the defendant for having to defend against the defective lien claim. And like I said before, I’ve personally witnessed judges doing this in the past, so I’m not just making this up.

I hope I’m wrong and none of this happens. I don’t have a proverbial horse in this race, but I care about the stakeholders in this industry. I am writing about this now because the fee schedule is only a couple of months old and what I see as an obvious long-term outcome can easily be avoided. There just isn’t enough profit in post-fee-schedule copy service invoices to take risks with these orders. The rules are plain for all to see, and doing it “right” really won’t take much more time or effort.

Stephen Schneider is a principal for ScanFiles and DocuCents. This column was reprinted with permission from the ScanFiles blog.