If clients make the investment now and use these defenses and strategies to litigate and resolve liens in the short term, long term benefits are potentially significant. Simply stated, a hard-nosed stand now could translate into savings later (i.e. litigation costs due to frivolously or improperly filed liens). This article briefly addresses: 1) Burden of proof; 2) The time period for filing a lien; 3) The dismissal for lack of prosecution and 4) Sanctions.

1. Burden of Proof

In defending against a lien, we must first realize that the lien claimant has the burden of proving the lien. “The burden of proof rests upon the party or lien claimant holding the affirmative of the issue.” (Labor Code section 5705.) In Kunz v. Patterson Floor Coverings, (2002) 67 CCC 1588, 1592, the WCAB held that even when a defendant does not specifically object to a lien, this does not cause the burden to shift to the defendant, and the burden of proof still remains with the lien claimant. Kunz, supra, specifically held:

(1) “Under section 4603.2, a defendant’s failure to specifically object to a medical treatment lien claim on the basis of reasonable medical necessity (or on any other basis) does not effect a waiver of that objection;

(2) The provisions of section 4603.2 do not apply unless the prerequisites to the section’s application have been met, i.e., the medical treatment in question must have been provided or authorized by the treating physician selected by the employee or designated by the employer [pursuant to section 4600] and the medical provider’s billing to the defendant must have been properly documented with an itemized billing, together with any required reports and any written authorization for services that may have been received;”
(Kunz, supra, 67 CCC at p. 1591.)

1. Burden of Proof and Reasonableness

In Tapia v. Skill Masters Staffing (2008) 73 CCC 1338, the WCAB further considered the question of reasonableness, pertaining to outpatient surgery fees and held:

“consistent with Kunz: (1) an outpatient surgery center lien claimant (or any medical lien claimant) has the burden of proving that its charges are reasonable; (2) the outpatient surgery center lien claimant’s billing, by itself, does not establish that the claimed fee is ‘reasonable’; therefore, even in the absence of rebuttal evidence, the lien need not be allowed in full if it is unreasonable on its face; and (3) any evidence relevant to reasonableness may be offered to support or rebut the lien; therefore, evidence is not limited to the fees accepted by other outpatient surgery centers in the same geographic area for the services provided.”
(Tapia, supra, 73 CCC at p. 1340.)

California Code of Regulations, Title 8, section 9795.3(b)(2), provides the necessary authority to address the issue of reasonableness of interpreter fees. In pertinent part below:

“For all other events listed under subdivision (a), interpreter fees shall be billed and paid at the rate of $11.25 per quarter hour or portion thereof, with a minimum payment of two hours, or the market rate, whichever is greater. The interpreter shall establish the market rate for the interpreter’s services by submitting documentation to the claims administrator, including a list of recent similar services performed and the amounts paid for those services.”

The bottom line is a lien needs to be supported by the appropriate documentation proving that the services were in fact provided, necessary and reasonable which is not simply established on the face of medical billing.

Commonly liens are filed with no supporting documentation failing to satisfy the lien claimant’s burden. However, even if the lien claimant provides medical billing that does not necessarily establish the fact that the claimed fee is reasonable and the fee can be rebutted. Labor Code section 4903.8 (d) prescribes specific rules regarding the lien claimant’s burden to prove that the services and or products were in fact provided and the billing material used to support the lien accurate.

2. Requirements under Labor Code section 4903.8 (d)

“At the time of filing of a lien on or after January 1, 2013, or in the case of a lien filed before January 1, 2013, at the earliest of the filing of a declaration of readiness, a lien hearing, or January 1, 2014, supporting documentation shall be filed including one or more declarations under penalty of perjury by a natural person or persons competent to testify to the facts stated, declaring both of the following:

(1) The services or products described in the bill for services or products were actually provided to the injured employee.

(2) The billing statement attached to the lien truly and accurately describes the services or products that were provided to the injured employee.”

4903.8(e) goes on to state:

“A lien submitted for filing on or after January 1, 2013, for expenses provided in subdivision (b) of Section 4903, that does not comply with the requirements of this section shall be deemed to be invalid, whether or not accepted for filing by the appeals board, and shall not operate to preserve or extend any time limit for filing of the lien” (Emphasis added.)

What does this mean to defense attorneys? Simply filing a lien, without the necessary documentation and declarations fails to meet the requirements of Labor Code section 4903.8 (d) and the lien is invalid as soon as it’s filed. That said, review the documentation and declaration and make sure it meets the above requirements. Colleagues have successfully defeated liens based on lien claimant’s failure to attach the appropriate declarations.

2. Time for filing a lien
   1. Requirements under Labor Code section 4903.5

A basic defense to liens is the failure to file timely. Labor Code section 4903.5 requires all liens be filed as follows:

“(a) A lien claim for expenses as provided in subdivision (b) of Section 4903 shall not be filed after three years from the date the services were provided, nor more than 18 months after the date the services were provided, if the services were provided on or after July 1, 2013.”

Thus, always review the documentation and the lien filing date to determine timeliness in accordance with Labor code section 4903.5. If the lien was not filed within the statutory requirement notify lien claimant that the lien is invalid for failure to timely file.

3. Dismissal of lien for Lack of Prosecution

If a lien is filed but no action is taken, defendants should seek dismissal pursuant to California Code of Regulations section 10582.5. In pertinent part, Regulations section 10582.5 states:

“(a) A lien claim may be dismissed for lack of prosecution on a petition filed by a party or on the Workers’ Compensation Appeals Board’s own motion if the lien claimant fails to file a declaration of readiness to proceed by the earlier of:

(1) 180 days after the lien claimant becomes a “party” within the meaning of section 10301(dd)(6); or

(2) 180 days after a lien conference or lien trial at which the lien claim was at issue is ordered off calendar.

The 180-day period of subdivision (a)(1) is computed from the date that the original owner of the lien claim became a party or would have become a party if it still owned the lien claim.”

A lien claimant becomes a “party” once the case-in-chief is resolved. Thus, defendants can diary their file for 180 days after the case-in-chief resolves to determine if a Declaration of Readiness to Proceed to Lien Conference was filed. In the event a Declaration of Readiness has not been filed, defendants can file Petitions to Dismiss.

4. Sanctions: 5813

Defendant’s remedy against lien claimants who push improperly supported and/or frivolous liens is to file for sanctions pursuant to Labor Code Section 5813. Labor Code 5813 states, in pertinent part:

“(a) The workers’ compensation referee or appeals board may order a party, the party’s attorney, or both, to pay any reasonable expenses, including attorney’s fees and costs, incurred by another party as a result of bad-faith actions or tactics that are frivolous or solely intended to cause unnecessary delay. In addition, a workers’ compensation referee or the appeals board, in its sole discretion, may order additional sanctions not to exceed two thousand five hundred dollars ($2,500) to be transmitted to the General Fund.

(b) The determination of sanctions shall be made after written application by the party seeking sanctions or upon the appeal board’s own motion.”

If lien claimants want to push a lien that is improperly supported or otherwise invalid pursuant to the Labor Code defendants should seek sanctions including attorney’s fees pursuant to Labor Code section 5813. Until sanctions are imposed, lien resolution will continue to be the wild west of the Workers’ Compensation judicial process with defendants at the mercy of lien claimants. Let’s use these defenses and strategies, push back against lien claimants and change the status quo of lien resolution process.