Category Archives: Liens

New Lien Regulations Sent to WCJs

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CORRECTION:  Lien regulations ARE effective now.  Good hunting, everyone!

Welcome back from the long weekend!  As we head to the water-coolers, coffee-machines, and breakfast-conference rooms to swap stories of burgers grilled and items purchased at discount, perhaps there is room to say a word or two about liens as well?

The word around the proverbial workers’ compensation water cooler is that the new lien regulations have been distributed to the workers’ compensation judges (but not yet effective).  Beware, lien claimants, your day is upon you!

If this copy of the proposed regulations is legitimate, the new regulations, if adopted in their entirety, will have the following effects (among others):

  1. Lien claims can be dismissed as inactive after 180 days;
  2. Liens must have ADJ case numbers if the application has already been filed – so lien claimants will have to do their homework!
  3. Lien claimants will be required to appear at lien hearings and be prepared to discuss the case.

Hopefully these regulations will take effect soon and we will have the opportunity to take them out for a spin.  As some southern-California practitioners will tell you, past efforts to deal with the lien problem have met with the fatal mark of “local rules.”  State-wide regulations of this sort are a good step towards solving the problem.

MPN Defects Can Be Cured; Lien Problem, Not So Much…

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Can a defect in a Medical Provider Network be cured?  The answer appears to be “yes” according to at least one workers’ compensation Judge and the Workers’ Compensation Appeals Board in the case of Sara Ochoa v. Bel Aire Window Coverings.

Lien claimant Aspen Medical Resources petitioned the Workers’ Compensation Appeals Board for reconsideration of the workers’ compensation Judge’s order dismissing its lien.  The WCJ held that lien claimant had “failed to meet their burden of proof that their charges were credible or reasonable,” and that “defendant had a valid Medical Provider Network in place at the time of lien claimant’s date of services.”

Lien claimant argued that the Medical Provider Network was defective, but didn’t provide any reasoning.  In any case, applicant was referred to a chiropractor shortly after her injury, but notices of the MPN were not sent to her or her treating chiropractor until after she began treatment.

So the only possible theory lien claimant could go on to challenge the validity of the Medical Provider Network is that the notices of the MPN were not provided at the time of injury.  Swing and a miss.  As the WCAB put it, “a delay in serving the injured worker with required MPN notice does not mean that a defendant is liable forever after for the costs of any and all treatment self-procured by the injured worker.”

The WCJ also held that the “durable equipment” of a hot/cold therapy unit would only be “reasonably necessary” if applicant had undergone surgery, which she had not.  The instructions for use of the equipment specifically stated its purpose was to help post-surgery recovery.

Now, another twist to this case was lien-claimant’s objection, made at trial, that  defendant did not provide a proof of service of its trial exhibits.  The WCJ held that the “objection amounted to surprise and an attempt to catch the opposing side off guard” and that “[l]ien claimant had more than enough time to review the exhibits prior to the trial.”

It certainly looks like the old tricks of lien claimants are starting to resemble duck suits during hunting season.

Overcharging Lien Claimant Loses at WCAB

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It looks like the Workers’ Compensation Appeals Board really is getting fed up with the lien problem that is crippling California’s workers’ compensation system.  In the case of Ronald Houghton v. All Brands Sewing and Vacuum (that’s right, the same one from Wednesday), the WCAB dismissed the petition for reconsideration filed by lien claimant California Physicians Network for transportation costs.

After a trial, the workers’ compensation Judge awarded the lien claimant $8,820.00 of a $22,942.40 lien.  The lien claimant petitioned for reconsideration, arguing that it was entitled to the full amount.  But, in filing its petition, the lien claimant failed to provide verification in accordance with Labor Code section 5902.  Normally, the WCAB will roll their eyes at this lapse in procedure and will continue on to the meat of the matter.

The WCAB recognized that it has discretion to dismiss (or not dismiss) an unverified petition.  But it also noted that defendant had pointed out this lapse in procedure in its answer, and the lien claimant failed to cure.  And so the petition was dismissed, but the fun doesn’t end there…

The WCAB also adopted and incorporated the WCJ’s report and recommendation, and would have denied the petition on the merits.  The WCJ had found that, based on the testimony of a bill reviewer, the $145 dollars in transportation charged to defendant for applicant’s 11-mile trip to the doctor was excessive.  Furthermore, the panel Qualified Medical Evaluator testified, at his deposition, that applicant was fully capable of driving himself.

The WCJ even went so far as to opine that applicant could have gotten taxi service for $15 each way, which would have adequately served for the purposes of his visits.  At $145 for 11 miles, applicant should have been enjoying the therapeutic effects of luxury limousine service with the limousine itself being airlifted by an equally luxurious helicopter to his destination.  Your humble blogger is unaware of the reason why the defense did not seek reimbursement in this case, but it appears that the WCJ would have been inclined to award it had the issue been raised.

Every bill is worth reviewing, and perhaps reimbursement is worth pursuing.  Frankly, even if the cost of litigating the question of reimbursement meets or exceeds the cost of recovery, it may be worthwhile just to discourage frivolous bills in the future.

Stipulations: A Crutch You Can Lien On

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Imagine this scenario: you enter into a stipulation to resolve a lien with a lien claimant’s hearing representative.  The stipulations are signed and approved by the workers’ compensation Judge.  When the lien claimant hears about the stipulation terms, it wants out of the agreement, claiming the hearing rep. exceeded the authority granted to settle.  Well, one WCJ issued an order rescinding the stipulation and releasing the lien claimant from its binding effect.

In the case of Ronald Houghton v. All Brands Sewing and Vacuum, defendant and lien claimant Express Case Management entered into a stipulation to settle the lien of $14,639 for $1,411.  The lien claimant then filed a petition for reconsideration arguing that “its hearing representative mistakenly took defendant’s offer, thinking it was appropriate.”  Even though the defendant was not served with the petition, the WCJ rescinded the earlier order, setting the lien claimant free.

The defense, upon receipt of the order (22 days after it was issued) filed a petition for reconsideration.  After addressing the issue of timeliness, and finding that defendant’s petition was timely, the Workers’ Compensation Appeals Board rescinded the WCJ’s order, reinstating the original stipulations.

A law professor once told me that the governing motivation for almost any judge or panel of judges is “judicial economy.”  The reasoning in this panel opinion shows that to be true.  The WCAB cited Robinson v. Workers’ Comp. Appeals Bd., in that the purpose of stipulations is to expedite trials and hearings, and that “if a party had the right to withdraw from a stipulation, ‘hearings would be subject to uncertainty and disruption in order for the parties to gather and present evidence on issues thought to have been laid to rest by the stipulation.”

In other words, if a hearing representative exceeds his authority, perhaps you should retain a different hearing representative.  It’s not the defendant’s problem, and it certainly isn’t the WCAB’s problem.

Received Bills from Implantium? Fraud Charges Pending…

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Have you seen bills for Implantium?  Well, if you have, you may want to hold off before you pay them.  The Santa Clara County District Attorney’s Office has charged Trudy Maurer (CEO) and Tigran Shahsuvarya (Medical Director) with nine felony counts of fraud, the allegations being that the two inflated invoices and submitted them to various government employers in San Jose County.

Shrugging off the medical fee schedule, Implantium allegedly overbilled the government employers for devices implanted (or supposed to be implanted) into injured employees backs.

If your gamble-inclined blogger were inclined to gamble, he would guess that these were more of those spinal stimulators or neural stimulators that work so well during the “trial” phase and then stop working all together after being implanted, requiring additional surgery to remove them.

If these allegations are true, hopefully the District Attorney’s office will not hesitate to throw the proverbial book at the perpetrators.  These parasitic acts bankrupt the workers’ compensation system and hurt tax-payers, employers, and employees alike.

One can also hope that the DA’s office will not hesitate to pursue the same sort of transgressions when committed against private-sector employers and insurers.

As always, WCDefenseCA wishes the District Attorney’s office good hunting!

Tommy Jenkins Returns – and Files a Lien

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Do you remember Tommy Jenkins?  He was that annoying fifth-grade friend of yours.  He was that kid that was always the center of the world – everyone was just out to get him.  No matter what happened, it was all part of some effort by someone who “hated” him, especially the teacher (she was out to get him, you see).  As you know, Tommy grew up and became a lien representative in California’s workers’ compensation system.

In the case of Paul Allgood v. County of Los Angeles, the lien claimants, represented by Green Lien Collections, filed a petition to have the workers’ compensation Judge disqualified for bias.

At this point, your ever-realistic blogger must point out that everyone has a bias against lien claimants, including WCJs.  After all, lien claimants and WCJs are naturally enemies, just like lien claimants and applicant’s attorney, or lien claimants and defense lawyers, or lien claimants and other lien claimants.  If your garden variety bias served to disqualify WCJs, there would be no WCJs left to adjudicate these cases, and we would have to resort to picking champions and settling things via duels.

Basically, the matter was set for trial, and the WCJ ordered the matter continued and also ordered the doctor performing the services that were the basis of the lien to appear and testify at the continued trial.  The lien claimant petitioned for removal of the order and the order removal was granted.  The parties then returned for trial but the WCJ fell ill, so the trial was continued again.

The lien claimant was not fooled – he knows bias when he sees it!  The so-called “illness” was certainly a clever ploy to prejudice the lien claimant, because everyone knows that WCJs are impervious to injury and, having already waited for the case-in-chief to resolve, any further delay to lien claimant results in total destruction of its interests – lien claimant really needs that “355989” to keep the doors open.  (Apparently the lien is unclear as to whether the amount in question is $355,989.00 or $3,559.89.)

REAL bias is not a couple of continuances, as was the case here – the WCJ fell ill on the day of trial, what are you going to do?  In any case, the lien claimant’s efforts to have the judge disqualified only further delayed the matter by necessitating that the continued trial be cancelled and await resolution of the petition to disqualify.

Lien claimants are already establishing the image of actors pursuing frivolous actions or abusing process to shake down a settlement – now they are setting themselves up as cry-babies as well.  Say hello to Tommy Jenkins for me.

Using MORE Sanctions to Restrain Lien Claimants

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Some time ago, your dedicated and consistent blogger reported on the tactic of using sanctions to restrain lien claimants. After all, if lien claimants want to leverage the cost of litigation to force a settlement, why not turn the tables and leverage the cost of sanctions to knock out baseless liens?

In California’s workers’ compensation system, defense lawyers and applicants’ attorneys agree – liens are not unlike a locust swarm plaguing the system.  The arm movement necessary to swat one only exposes the swatter to more, and all the while they ravage and consume all the green of the land.

It looks like this workers’ compensation lawyer is not just howling into the wind anymore.  In the case of Myra Campos v. Keiro Nursing Home, lien claimant Rift Interpreting filed a lien for interpreter services, but failed to appear at a lien conference and then insisted on proceeding to a lien trial without any apparent evidence to support the validity of its lien.

In fact, it appeared to the workers’ compensation Judge, the Workers’ Compensation Appeals Board, and now appears to your attorney-blogger, that lien claimant expected to use the cost of litigation, rather than the chance of prevailing on the merits, to leverage a settlement.

No doubt, in the past, this very tactic had worked to great success for Rift Interpreting and other lien claimants.  I have had lien claimants pull this stunt before, but to considerably less success than they were hoping for.

The WCJ not only disallowed the lien, but also held that “the activities undertaken by [lien claimant] were egregious and frivolous, warranting sanctions in the amount of $2,500.00 plus the per-capita share of reasonable value of the services rendered by defendant.”

The WCAB denied lien claimant’s petition for reconsideration, noting that lien claimant had not even remotely approached the burden set out in Guitron v. Santa Fe Extruders (2011, en banc), which required interpreter lien claimants to show that (1) that the services provided were reasonably required; (2) that the services were actually provided; (3) that the interpreter was qualified to provide the service; and (4) that the fees charged were reasonable.

Dear readers – don’t feed these lien claimants, even for tiny claims.  I remind you of the story of Three Billy Goats Gruff.  It appearing that the Appeals Board has grown tired of these extortion tactics, now is the time to collectively raise the cost of doing business on lien claimants and cut the cost of doing business in California.

No Work Permit? No Problem!

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In the case of Felix Nino Mota v. Allgreen Landscape, applicant sustained injury to various body parts, and his claim was eventually resolved with a stipulated award of 89% with future medical care, namely in-home care which his wife began providing.  Mrs. Mota entered the country legally but did not establish she has the right to work in the United States.  She learned how to take care of her husband from his nurses and doctor.

Applicant’s wife sought to have defendant pay the value of her in-home care services.  Defendant countered with an offer to provide 16 to 18 hours of home health services daily with a licensed vocational nurse.  Applicant refused.

Following a trial, the workers’ compensation judge ruled that the Immigration Reform and Control Act of 1986 does not bar applicant’s wife from receiving the “reasonable value of her services.”

In denying defendant’s petition for reconsideration, the Workers’ Compensation Appeals Board held that Mrs. Mota’s services were not subject to utilization review, even though they were never requested by a treating physician, because the services began before Labor Code section 4610 became effective, and because defendant was aware the services were being provided.

With regard to the issue of Mrs. Mota’s work status, the Workers’ Compensation Appeals Board held that applicant’s wife is not defendant’s employee, so the question of federal law does not arise.

The basic result of this case has two equally alarming effects: (1) the defendant is no longer allowed to control treatment, and must allow applicant’s wife to provide in-home care rather than providing a professional of its choice; and (2) the defendant is forced to provide payment to a person who has no right to work in the United States in violation of federal law. In fact, it is possible that the WCAB would force an employer to pay an illegal immigrant to provide in-home services to an employee who was also discovered to be an illegal immigrant.

The WCAB relies on the reasoning that “[i]f applicant had chosen to move to Mexico after his injury for medical treatment and rehabilitation, and if Mrs. Mota had provided exactly the same services, defendant would be liable for those services, and there would be no issue as to her employment status or her right to reimbursement.”  But Mrs. Mota has the right to work in Mexico, and not in the United States.

Perhaps the defendant might consider retaining a lawyer for a federal removal action to see if the federal law is really as undisturbed as the WCAB suggests.  After all, if the federal government can so casually disrupt settlement proceedings with its Medicare Set-aside Analysis requirements, invalidating a WCAB decision should be no problem.  In any case, applicant’s attorneys may have stumbled upon a way to gather income for their clients, regardless of work status, by having non-work eligible spouses provide “home care.”

Another One (Could Possibly) Bite the Dust

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I think it is no secret that lien claimants and their representatives are not all on Santa’s “nice” list.  Some of them engage in what I would call, in an act of unfathomable generosity, ethically questionable tactics.

Often enough, sanctions are not awarded against them (although there are exceptions), and even then not with enough frequency to make the tactics unprofitable.

But then, there are cases like those of one hearing representative, who shall remain nameless.

In this en banc opinion, the Workers’ Compensation Appeals Board ordered a hearing on whether or not this hearing representative should be stripped of the privilege of appearing before the Board.  The WCAB provided a long list of the hearing representatives’ bad faith tactics, including the filing of frivolous petitions, failing to appear, making false statements of fact, and others.  This sanctionable conduct goes back as far as 2003.

Just as an aside, the fact that the first actual sanction was imposed in 2003 suggests to me that there may be other actions which were never sanctioned, inflating the frequency and longevity of this history of conduct.

For eight years, this hearing representative was sanctioned again and again.  A hearing is ordered on this matter and hopefully there will be no more defendants harassed, shaken down, or bullied by this person.  Of course, this can only serve as a personal deterrent to him, taking his ability to do these things away, and somewhat of a scare tactic to others.

Overall, however, the Workers’ Compensation Judges and the WCAB seems reluctant to punish bad behavior on the part of lien representatives (or applicants’ attorneys), so if anything is ever to be done about the unethical amongst us, be sure to contribute to a record to help document who-did-what-wrong.

Lien Claimant Recovers In Contested Case

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Lien claimants can not recover if there is no underlying industrial injury, right?  After all, the employer is not liable for treatment, temporary disability, or permanent disability in cases where the injured worker can not prove an injury occurred or that it arouse out of employment/caused by employment (AOE/COE).

It follows, then, that if there is no recovery, there is nothing to place a lien upon, and a lien claimant who can not prove injury and causation can not recover… WRONG.  Unfortunately, that is not the case in California Workers’ Compensation Procedure.

In the recent case of Herrera v. Civil Demand Associates, the Workers’ Compensation Judge ruled that the lien claimant Bell community was entitled to reimbursement for a medical-legal evaluation in a case where the employer denied injury.

The WCJ recognized, and the Workers’ Compensation Appeals Board reasoned (in adopting and incorporating the WCJ’s report), that the costs of a comprehensive report must be borne by the defendant when a lien claimant seeks to prove injury to collect on its lien, otherwise the lien claimant would be barred from contested claims.

Lien claimants already make ready use of scorched-Earth tactics, pestering the defense into paying for treatment or procedures not “reasonably required” or sometimes not performed at all.  Now lien claimants can further drive up the threshold for nuisance value settlements, threatening to invoke medical legal costs on top of the expense of discovery, appearances and trial.

The Court of Appeal had the opportunity to correct this mistake, but denied defendant’s petition for a writ of review.  (13 ABR 13,237)

Hopefully, this will not be a case that is followed by other WCJs, and the hordes of reserves-eating lien claimants will remain checked by Thomas clauses.