January 1, 2020 brought us a new year and with that, changes to the Title 8, California Code of Regulations (CCR.) Of the many modifications made to the regulations, changes were made to the rules governing the dispute process to address medical-legal bills that are not subject to Independent Bill Review. The process to contest the above was previously outlined within CCR §10451.1 but is now found under CCR §10786. A failure to meet the strict timelines imposed within CCR §10786 can have a catastrophic effect on a defendant’s ability to contest medical-legal bills and will result in a waiver of many pertinent objections and defenses.

All disputes solely over the amount to be paid remain subject to the Independent Bill Review process. However, the WCAB retains jurisdiction over disputes surrounding med-legal bills and “threshold issues”. Examples of threshold issues triggering the procedure under CCR §10786 include but are not limited to employment, statute of limitations, insurance coverage, personal or subject matter jurisdiction, or whether the charges are indeed med-legal in nature. If a threshold issue is present, a defendant must act promptly to ensure that its right to assert any applicable defenses remains preserved.

Labor Code Section §4622(a) provides a defendant with 60 days from date of receipt of a provider’s fully itemized and compliant bill to pay any undisputed amount and object to any disputed portion of the bill. A failure to do so will result in the Defendant being responsible for the value of the charges along with a 10% penalty and 7% interest. Costs, attorney fees, and sanctions can also be awarded by the WCAB. All objections must be completed on a fully complaint Explanation of Review as defined within Labor Code §4603.3.

Within 60 days of service of a timely and compliant objection, CCR §10786 now mandates the “ . . .defendant shall file a petition for determination of medical-legal expenses and a Declaration of Readiness to Proceed.” The provider is allotted 90 days from service of the defendant’s objection to request a second review on the proper form. The prior version of the rule did not require the provider to request a second review in the case of non-IBR disputes.

A provider’s failure to request the second review will result in a waiver of any further argument over the unpaid or disputed portion and the billed will be deemed satisfied. If a defendant fails to file its Petition for Determination and Declaration of Readiness to Proceed timely, then the provider can file a “Petition for Reimbursement of Medical Legal Expenses”. The provider is not required to file a Declaration of Readiness to Proceed. Upon receipt of the request for a second review, defendant must respond within 14 days or pay the disputed amount.

A defendant will be deemed to have waived most of its objections to a med-legal provider’s bill if it fails to timely object to any disputed value and file the corresponding Petition and DOR. However, all hope is not lost. Providers will still be required to meet the burdens established under LC §4620 and § 4621 and demonstrate the following:

1. The rendered services were for the purpose of proving or disproving a contested claim;
2. The expenses at issue were reasonably, necessarily, and actually incurred.

Neither of the above must be specifically asserted by a defendant in order to remain preserved. If a provider fails to establish either of the above, then the provider has failed to meet the burden necessary to demonstrate that the charges at issue are med-legal and the mandates under §10786 are not triggered.

The changes to the med-legal dispute procedures require defendants to take immediate action within 60 days of an objection, which at first glance appear burdensome and provider friendly. However, CCR §10786 also expanded the procedures required of med-legal providers. Like IBR disputes over the amount to be paid per fee schedule, non-IBR disputes of med-legal expenses now require providers to request a second review within an allotted period. A provider’s failure to do so deems a bill immediately satisfied and terminates the ability for further litigation. If defendants remain diligent upon receipt of disputed med-legal bills and follow the timelines and procedures of CCR §10786 and the corresponding Labor Code sections, success is not guaranteed but much more likely.

By Katherine A. O’Brien, Esq., Managing Associate Partner, San Diego March 2020

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