Labor Code section 3751(b): The Ignored Remedy
Labor Code section 3751, subdivision (b), prohibits a medical provider from knowingly collecting payment from an injured worker for a pending industrial injury claim. The only exception is if the medical provider received written notice that the employer denied the injury and the medical provider provides a copy of the denial notice to the employee. Otherwise, the medical provider is in violation of section 3751, subdivision (b), by collecting payment. The consequence is that the medical provider is liable for three times the amount unlawfully collected from the injured worker, plus reasonable attorneys and costs.
Case law on section 3751, subdivision (b), is lacking and I have yet to see the provision enforced. Yet, some medical providers often collect some form of payment from an injured worker while admitting knowledge that the services are for a compensable injury; for instance, by documentation in the medical records and/or billing and collection from the compensation carrier. I have deposed a treating physician who admitted treating for an admitted and open compensation claim while collecting a $20.00 co-pay from the injured worker during each office visit over an extended period.
In lieu of enforcing section 3751, subdivision (b), applicant attorneys tend to send a simple letter to the claims examiner or defense attorney seeking reimbursement for the applicant’s out-of-pocket costs. This approach renders one-third of the recovery the injured worker is entitled to under section 3751 at best. The attorney passes on collecting market rate attorney fees from the culpable medical provider, which is independent from the percentage he/she may recover as part of the employee’s compensation. Perhaps section 3751 is overlooked, or prosecuting its remedies generates too much additional work for a high-volume legal practice. However, I have seen plenty of standard, verified form petitions to collect attorney fees under Labor Code section 5710.
The panel decision Hoadley v. American Airlines, released last April, caught my interest for putting a faint light on section 3751, subdivision (b). In Hoadley, the claimant paid over $17,000.00 for knee surgery the carrier authorized. It appears Mr. Hoadley may have been in a precarious position because he traveled from out-of-state for the planned surgery. He may have thought his only option to salvage his surgical treatment from falling through was to oblige with his treatment providers’ demands by putting the requested charges on his credit card.
The amount charged to the injured worker appears to have exceeded the official medical fee schedule, not to mention the section 3751 problem. The injured worker sought full reimbursement from the carrier, but the panel held reimbursement from the carrier is subject to the official medical fee schedule. There was evidence that the scheduled amount was a fraction of what the applicant paid.
It is curious Mr. Hoadley did not seek recovery under section 3751, subdivision (b), directly from the responsible provider(s), which would exceed $51,000.00, and not be subject to the official medical fee schedule. By its terms, the policy of section 3751, subjection (b), is remedial, and not qualified by what is reasonable treatment or reasonable billing. The elements of section 3751 are simple and easy to prove. There is no explanation in the decision why Mr. Hoadley focused his efforts on the limited reimbursement strategy, but the panel pointed out that a medical provider cannot charge an injured worker directly for accepted treatment. Time will tell if section 3751, subjection (b), gets dusted off and utilized. In the meantime, it may be worthwhile to make an inquiry whether the applicant is pursuing his/her remedies under section 3751, subdivision (b), if he/she makes an overlapping 4600 reimbursement request from the compensation carrier.