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Split WCAB Panel: No Obligation to Prepay Medical Treatment

Hello, dear readers!

Your humble blogger recently stumbled upon an excellent article written by Robert G. Rassp, Esq. on the split plane decision of Murphy v. Petsmart.  To give a quick rundown of the facts, applicant’s treating oral surgeon requested authorization for pre-authorization of oral surgery and implant placement.

He further requested pre-payment for the procedure in the amount of $25,600.00, in accordance with his office’s practice.

Following this July 5, 2012 request, UR authorized surgery on July 19, 2012.   Then… nothing.  The immovable object of the oral surgeon’s demand to be paid for the surgery in advance met with the unstoppable force of the defendant’s policy of paying for medical treatment within 45 days of the services being rendered.

This standstill continued until October 15, 2012, when applicant filed a declaration of readiness to proceed (apparently, not to an expedited hearing), and the parties repeatedly tried to obtain some middle ground as between the oral surgeon and the defendant, until defendant ultimately issued pre-payment in the amount of $25,510 on February 4, 2013.

However, applicant still pursued penalties for the delay in payment, pursuant to Labor Code section 5814, seeking a 25% penalty on the $25,510 ($6,377.50) for delaying the prepayment.

The WCJ imposed sanctions for delaying pre-payment, but, in a split panel, the WCAB granted reconsideration, reasoning that, under Labor Code section 4603.2, the employer has 45 days to issue payment after services have been provided.  (“Payment shall be made by the employer with an explanation of review pursuant to Section 4603.3 within 45 days after receipt of each separate, itemization of medical services provided, together with any required reports and any written authorization for services that may have been received by the physician.”)

The WCAB majority held that there’s no unreasonable delay of providing benefits, including medical treatment, because defendant had no obligation to pre-pay.

Here are your humble blogger’s humblest of thoughts: this case was really a no-win situation.  Applicant was delayed the medical treatment to which she was entitled, and which defendant ultimately provided.  Defendant ended up litigating this issue and taking up to the WCAB, but even a victory isn’t as good as not having been at risk in the first place (recall, dear readers, applicant’s standpoint persuaded one WCJ and one Commissioner while defendant’s had persuaded two Commissioners – this was close.)

So what should have been done instead?

Let me preface this part by saying that, in your humble blogger’s completely made-up scenario, the defense attorney came on the scene down the road, when this issue was being set for hearing, and the adjuster, like most adjusters, was walled into his or her work area by stacks of files and to-do lists enough to make anyone forget their name.

If your humble blogger had unlimited time and resources, and was in the situation of the adjuster and the defense attorneys in this case (that first *IF* is crucial, by the way), I would suggest meeting this issue “head on”: as soon as a treatment provided states a demand for pre-payment, write a letter in response saying that it’s not going to happen and why – because it’s not done in workers’ comp and there’s no obligation to start pre-paying for treatment.

In this case, the oral surgeon’s position was that, while he could take post-service payment for almost everything, the implants presented too high a cost to advance and them await reimbursement.  It might not be unreasonable to agree to pre-pay at least some of the implant costs to get the treatment going.

The problem in this case was that this impasse sat unresolved from mid-July to early February.

Now, if Governor Brown knocked on my door right now, I would probably be very alarmed (given that this post is being written at night).  But, assuming that this was an official visit and I was to be named a Commissioner (hint, hint, Jerry) I would agree with the majority – this is not a situation where there was any clear authority for forcing a pre-payment.

And, on top of that, if defendant is in any way to blame for the delays, applicant is equally to blame – an expedited hearing a month after UR had authorized the surgery but the surgery had not yet been scheduled would have cleared this up quickly, one way or another.

The lesson here, I submit to you, is to take the extra step, so you don’t have to run the extra mile.

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