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Report stresses that liens are 'choking' California's work comp system

Today's workers' compensation defense post will briefly explore some of the findings reached by the California Commission on Health and Safety and Workers' Compensation (hereinafter the Commission) in their recently released "Liens Report."

Interestingly, the rather lengthy report found that liens are "choking" California's work comp system, clogging the dockets of workers' compensation judges and costing both employers and insurers upwards of $200 million a year on loss adjustment expenses.

(For the uninitiated, a work comp lien is a direct legal claim seeking payment for services provided, including medical treatment/expenses and other services. The filer of the lien alleges that employers/insurers must provide full payment for these services and seeks authorization for payment from the Workers' Compensation Appeals Board.

Put another way, the Commission defines a medical lien as "the medical provider's vehicle for contesting the employer's determination of the amount payable for medical goods or services.")

According to the Commission, roughly 450,000 work comp liens will be filed in California in 2011, an increase of at least 100,000 from the previous year.

This sheer preponderance of work comp liens is described by the Commission as producing ineffective and potentially inequitable outcomes among providers and employers/insurers.

"The volume of liens forces the courts to encourage settlement, almost to the point of coercion. The necessity of settlement rewards both unjustified claims and unjustified refusals," reads the report.

Some of the more notable findings of the Liens Report include:

  • Medical treatment liens accounted for over 60 percent of all liens filed and over 80 percent of the money in dispute
  • Almost 30 percent of medical liens are prematurely submitted, meaning they are filed before the allotted time for the claims administrator to pay or deny/object to the bill has expired

In order to combat the problem, the Commission offers multiple recommendations, including:

  • Reinstatement of a $100 filing fee on all medical liens
  • Amendment of current laws/regulations to prohibit the premature submittal of liens
  • Establishment of a an administrative system to handle fee schedule disputes

Stay tuned for further developments in the area of workers' compensation defense ...

This post was provided for informational purposes only and is not to be construed as legal advice.

Related Resources:

Liens Stress California Workers' Comp System (Claims Journal)

Liens Report (California Commission on Health and Safety and Workers' Compensation)

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