*DISCLAIMER* The statements included below are not applicable to all lien claimants and/or hearing representatives.

What should be considered one of the easier issues to resolve as part of a workers’ compensation case, liens, have become one of the most frustrating tasks for defense attorneys and claims examiners.

The applicable laws regarding liability for payment of medical expenses and costs are fairly straightforward. Labor Code section 4600 requires the medical treatment provided be reasonable and necessary to cure or relieve the effects of the industrial injury, with Utilization Review and Independent Medical Review being the methods for obtaining that determination. The same “reasonable and necessary” standard is also applicable to costs, including interpreting and copy service fees.

However, when attempting to negotiate liens defendants usually deal with hearing representatives, who often do not understand or acknowledge the law. I have been in lien trials where the lien claimant argued that it was defendant’s burden to prove that the medical treatment for which the lien claimant was seeking payment was not reasonable and necessary, which is so absurd it should have warranted an award of costs and sanctions for defendants. (This particular case is currently up on reconsideration with the imposition of sanctions as an issue to be decided).

Unfortunately, defendants often wish to avoid the expense of going to trial on liens, leaving us at the mercy of the lien representative and their willingness to compromise.

I was recently negotiating a lien claimed in excess of $6,500.00 for lumbar epidural steroid injections (one date of service), which had been denied by Utilization Review two months prior to the injections being performed. After providing the UR denial to the lien representative, they requested $650.00 to resolve the lien. I explained to the representative that if we were to go to trial on the lien, they would receive $0.00 based on the timely UR denial and Labor Code section 4600, however, that did not seem to make a difference to the lien representative. While I was obligated to present this offer to my client for consideration, I could not recommend it.

I attended another lien conference a couple of months ago, where the lien claimant was disputing the EOR/EOB (Explanation of Review/Explanation of Benefits) received from defendants with partial payment of their bill, which defendants contended was made pursuant to Official Medical Fee Schedule. The total amount in dispute was less than $100.00, and the lien claimant had not properly objected to the EOR/EOB nor followed the procedure for requesting Independent Bill Review. According to the Labor Code, defendant was not liable for any additional payment and the lien representative did not have any documentation that would result in a contrary decision. (Additional defenses re: reasonableness/necessity, MPN, and failure to request authorization were also valid and applicable in this case). The claims examiner did not want to go to trial on the lien, which makes complete sense on a cost-benefit basis, but the lien claimant refused to compromise and the claims examiner did not have authority to agree to settlement (due to lien claimant’s failure to respond to requests for documentation, lien balance, and settlement demand prior to the Conference).

The options presented to the claims examiner included:

  1. Submit a Pre-Trial Conference Statement and set the matter for trial, seeking sanctions including costs and attorney’s fees (would increase costs to defendants if sanctions were not awarded);
  2. Obtain a continuance of the Lien Conference to allow sufficient time to obtain settlement authority (required the file to remain open at least another 3 months pending the continued hearing which would increase costs);
  3. Provide authority for $100.00 to resolve the lien (without the authority required by her supervisor or the employer, risking personal consequences for doing so).

I respectfully explained my legal position to the hearing representative, and the case law that would support an order of sanctions if we were forced to take the issue to trial, to which he responded, “I will object to setting the matter for trial, will seek a continuance of the Lien Conference, and will purposely run up the costs to your client by causing delay in resolution of the lien.” Can you say bad-faith?

Ultimately the client chose option #3 and the lien was resolved after spending over 3 hours at the WCAB “negotiating” with the hearing representative. I returned to the office feeling like a victim of successful extortion by the hearing representative. While I do not disagree with the decision of my client in this case, I can’t help but feel like we were forced to be satisfied with a less than fair result.

The only way to stop the lien claimants and hearing representatives from taking unlawful positions and employing bad-faith tactics, defendants will need to selectively allow their defense attorneys to litigate more liens at trial. It doesn’t matter how much supporting documentation we have to defend against liability for payment of liens if the hearing representatives that we deal with are unethical and disregard the law.

As in the case of Tito Torres v. AJC Sandblasting, if a lien claimant does not have evidence to support defendant’s liability for payment and insists on pursuing their lien, the issue of costs and sanctions should be raised and litigated at trial. Until the lien claimants are forced to pay for their lack of legal authority and ethics, negotiating liens will continue to be one of the most frustrating aspects of resolving a workers’ compensation case.