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LIENS

"The appeals board may determine, and allow as liens against any sum to be paid as compensation, any amount determined as hereinafter set forth....Labor Code §4903

SB 863 made vast changes in the lien process, including the imposition of lien activation and lien filing fees. Lien litigation was largely linked to bills relating to medical treatment, medical-legal reports, and interpreters. To reduce the liens choking some of the Workers' Compensation Appeals Board offices, SB 863 created Independent Medical Review (IMR), Independent Bill Review (IBR), and added new rules for Interpreters and Medical Provider Networks.

SB 863 added Labor Code §4903.05 requiring a filing fee of $150 for each provider of goods or services, with exceptions for certain health care service plans, group disability insurers, “publicly funded program providing medical benefits on a nonindustrial basis” and similar. Medical treatment liens, “except those disputes subject to independent medical review or independent bill review,” “shall be filed with the appeals board electronically using the form approved by the appeals board. The lien shall be accompanied by a proof of service and any other documents that may be required by the appeals board.”

SB 863 also added Labor Code §4903.06, requiring a $100 lien activation fee for medical liens or costs liens filed before 1/1/13. If the $100 is not paid on or before 1/1/14, there are Draconian results:

(4) All lien claimants that did not file the declaration of readiness to proceed and that remain a lien claimant of record at the time of a lien conference shall submit proof of payment of the activation fee at the lien conference. If the fee has not been paid or no proof of payment is available, the lien shall be dismissed with prejudice.
(5) Any lien filed pursuant to subdivision (b) of Section 4903 prior to January 1, 2013, and any cost that was filed as a lien prior to January 1, 2013, for which the filing fee or lien activation fee has not been paid by January 1, 2014, is dismissed by operation of law.

The entities noted as exempt under LC §4903.05 are exempt under LC §4903.06.

SB 863 added Labor Code §4903.07, allowing reimbursement of filing and activation fees under certain conditions.

To further end the flood of liens from “treatment on a lien” litigation and attempts to escape the medical provider networks, SB 863 amended Labor Code §4903.1 to provide that a private health plan will not be repaid through workers' compensation under certain cirumstances:

“payment or reimbursement shall not be allowed, whether payable by the employer or payable as a lien against the employee's recovery, for any expense incurred as provided by Article 2 (commencing with Section 4600) of Chapter 2 of Part 2, nor shall the employee have any liability for the expense, if at the time the expense was incurred the provider either knew or in the exercise of reasonable diligence should have known that the condition being treated was caused by the employee's present or prior employment, unless at the time the expense was incurred at least one of the following conditions was met:
(1) The expense was incurred for services authorized by the employer.
(2) The expense was incurred for services furnished while the employer failed or refused to furnish treatment as required by subdivision (c) of Section 5402.
(3) The expense was necessarily incurred for an emergency medical condition, as defined by subdivision (b) of Section 1317.1 of the Health and Safety Code.”

While an injured worker under Labor Code §4605 can self-procure treatment outside the medical provider network, a WCAB panel held that the worker is not personally liable to the lien claimant unless the worker intended to self-procure. In other words, if the worker's attorney sent the client to treat “on a lien” outside the MPN, and the worker did not intend to be personally liable, the doctor is out of luck.

SB 863 revised Labor Code §4903.5 to provide a 3-year statute of limitations for filing liens and 18 months for services filed on or after 7/1/13, effectively putting the kabosh on “zombie liens” that arise long after defendants thought the cases were dead.

To prevent liens filed prematurely, SB 863 amended Labor Code §4903.6 to require the lien claimant to wait until 60 days have elapsed “after the date of acceptance or rejection of liability for the claim, or expiration of the time provided for investigation of liability pursuant to subdivision (b) of Section 5402, whichever date is earlier” and either IBR or IMR has taken place.

SB 863 added Labor Code §4903.8 to prevent the assignment of accounts receivable except in certain legitimate circumstances. This was intended to end the practice of investors buying old accounts with uncollectible bills and filing “zombie liens.”

See “Tips for Lien Trial” under Articles below. Note that the Lien Claimant has the same burden as an Applicant in his or her case in chief. That is, the Lien Claimant must prove, by a preponderance of the evidence, that there was an injury AOE/COE and nature and extent of the injury, before the burden shifts to defendant. (see Torres case below).

Note that Independent Bill Review (IBR) applies to admitted injuries/body parts, and if the body part or injury is disputed, that issue must first be tried before before IBR becomes applicable but this only delays IBR until after resolution of this issue except as provided for medical-legal expenses in Labor Code §4622. See Labor Code §4603.6(a).

Attorneys are exempt along with certain other entities from paying the filing fee. See 8 CCR §10207(c).

See, too, Subrogation

Label Item Links Comments
Labor Code Labor Code 4903: "The appeals board may determine, and allow as liens against any sum to be paid as compensation, any amount determined as hereinafter set forth...." LC §4903   
  There are numerous lien sections. Consult the Labor Code Index starting with LC §4903. SB 863 made many changes to the lien statutes with the goal of greatly curtailing lien litigation.
On the Labor Code Index page, hit the Ctrl+F keys and type “lien” in search box.
Labor Code §§4903.054903.06 and 4903.07 were added by SB 863 concerning filing and lien activation fees LC §4903 et seq.  
Regulations/Rules §10205. Definitions
§10207 et seq: Lien Filing & activation fees: Note exemptions
§10770: Filing and Service of Lien Claims

Electronic Document Filing and Lien Filing Fee regulations

8 CCR §10205
8 CCR §10207

8 CCR §10770

Electronic Document Filing and Lien Filing Fee regs


 
Cases In Torres v. AJC Sandblasting, an en banc decision issued 11/15/12, the WCAB reiterated existing law and held that "a lien claimant must prove by a  preponderance of the evidence  all elements necessary to establish the validity of their lien before the burden of proof shifts to the defendant."  Further, "Proceeding to trial without any evidence or with evidence that is utterly incapable of meeting its burden of proof is frivolous and constitutes bad faith within the meaning of section 5813 justifying an award of sanctions,  attorney’s fees and costs against the party or lien claimant, its attorney(s) or hearing representative(s), individually or jointly and severally." Torres en banc  
  In an en banc decision, Figueroa v. B.C. Doering Co., the WCAB held that, where a lien claim falls within the lien activation fee requirements of Labor Code section 4903.06: (1) the lien activation fee must be paid prior to the commencement of a lien conference, which is the time that the conference is scheduled to begin, not the time when the case is actually called; (2) if the lien claimant fails to pay the lien activation fee prior to the commencement of a lien conference and/or fails to provide proof of payment at the conference, its lien must be dismissed with prejudice; (3) a breach of a defendant’s duty to serve required documents or to engage in settlement negotiations does not excuse a lien claimant’s obligation to pay the lien activation fee; and (4) a notice of intention is not required prior to dismissing a lien with prejudice for failure to pay the lien activation fee or failure to present proof of payment of the lien activation fee at a lien conference. Figueroa v. B.C. Doering Co. en banc<  
  In Martinez v. Ana Terrazas et al., the WCAB held en banc that “a claim for medical-legal expenses may not be filed as a petition for costs under section 5811; and (2) medical-legal lien claimants who withdrew their liens and filed petitions for costs prior to this decision may pursue recovery through the lien process if they comply with the lien activation fee requirements of section 4903.06 and if their liens have not otherwise been dismissed.” Martinez v. Ana Terrazas en banc

 
Forms EAMS Notice and request for allowance of lien Notice & Request   
Websites DWC FAQ on lien filing and activation fees

Lien filing and activation fees

DWC FAQ

DWC Liens

 
Practice Tips  Modifications have been made to the existing Division of Workers' Compensation public information case search function to add the capability to search for and select a lien to pay. Booklet on activating & paying fee Public search tool is here
Publications California Lien Claims in Workers' Compensation Cases by Judge Pamela Foust (get 2013 version)

Workers’ Compensation Liens in California: The History, the Opportunity, and a Model for Change: this predates SB 863 but explains the problem and has links to on-line articles on pp. 14-15.
Foust on Liens


Workers’ Comp Liens in California
 
Articles
Tips for lien trial (pp. 19-22): handout from DWC 20th annual educational conference 2/13

CHSWC Liens Report 2011 (1/5/11) talked about the lien problem, “zombie liens,” and had the road map later followed in drafting SB 863. The people who negotiated SB 863 were members of the commission responsible for this report.

Liens - Trial prep, etc.


CHSWC Liens Report 2011

see pp. 19-22
Magazine Articles Medical Liens: How the Lien Attorney Can Help You Protect Your Client and Yourself  by Robert A. Feinglass, Esq. Feinglass on Liens
 2011 article
Roundtable Lien Filing/Activation Fees, and a Warning to Defendants, by Jon C. Brissman, Esq. Brissman 4-13  
Miscellaneous      

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