The Fresno Judges have recently begun warning defense attorneys about a hidden Regulation related to sanctions, attorney’s fees and costs for improperly paying or objecting to medical-legal expenses found in 8 CCR §10451.1, advising that they plan to strictly enforce this and begin penalizing offending defendants. This Regulation is titled “Determination of Medical-Legal Expense Disputes” and subsection (g) of this two-page Regulation deals specifically with bad faith actions or tactics that can warrant monetary sanctions at a minimum of $500.

First and foremost, it is necessary to understand what a “medical-legal expense” is, as defined by the Labor Code and Regulations. Labor Code §4620 and 8 CCR §10451.1 state that a medical-legal expense shall mean any cost or expense incurred by or on behalf of any party for the purpose of proving or disproving a contested claim, including but not limited to goods or services expressly specified by Labor Code §4620(a) [costs and expenses incurred by the administrative director or the board, which may include x-rays, laboratory fees, diagnostic tests, medical reports, medical records, medical testimony, and interpreter’s fees, when incurred for the purpose of proving or disproving a contested claim], services rendered by a non-medical expert witness, and costs or expenses for copying and related services. Again, the goods or services provided must have been for the purpose of proving or disproving a contested claim, which is further explained in both of the above cited statutes which I recommend you review.

When a defendant objects to a bill for a medical-legal expense, it must strictly follow Labor Code §4622, which requires a defendant to pay any amount that is not objected to and provide an explanation of review setting forth the legal basis of the objection to the remainder of the charges, after which the medical-legal provider can seek Independent Bill Review if it disagrees with the defendant’s position. If the objection is not related to the amount of the bill and thus not subject to IBR, specific procedures need to be followed in a timely manner, including filing a Petition and a Declaration of Readiness to Proceed (see §10451.1).

Hidden within this Regulation in subsection (g) is a rule dealing with “Bad Faith Actions or Tactics” specifically related to payments and/or objections to medical-legal bills. This Regulation states that if the WCAB determines that a defendant’s failure to comply with the requirements, timelines, and procedures in Labor Code §§4622, 4603.3 and 4603.6 and/or the related Rules of the Administrative Director, the defendant shall be liable for the medical-legal provider’s reasonable attorney’s fees and costs, as well as monetary sanctions of no less than $500. “Bad faith” actions or tactics by a defendant include but are not limited to failure to timely pay any uncontested portion of a medical-legal bill, failing to make a good faith effort to timely comply with statutory or regulatory timelines and/or procedures, or contesting liability for the billing based on a dispute over injury or a particular body part. However, medical-legal providers should be aware that if they improperly assert that a defendant has acted in bad faith, they are subject to the same imposition of attorney’s fees, costs, and sanctions against them. If you have any questions about compliance, it is recommended that you consult an attorney.