Bill Collections Fail With Neglect Of WCAB Administrative Directions

In Meadowbrook Insurance Co. v. Workers’ Compensation Appeals Board (WCAB) (DFS Interpreting), No. C088882, November 21, 2019, the Court of Appeal for the 3rd District of California held that an interpreter company’s failure to comply with statutory procedures for appealing a denial of its bills resulted in foreclosure of further review.

DFS Interpreting (DFS) provided interpreting services at medical appointments sought by two injured workers. DFS timely submitted invoices for the services provided to each injured employee, and Meadowbrook Insurance Company (Meadowbrook) issued Explanations of Review (EOR) denying all payment. DFS filed liens with the WCAB and wrote letters objecting to Meadowbrook’s EOR, but did not specifically request a second review from the carrier as is required by the Labor Code and Code of Regulations.

The Workers’ Compensation Judge (WCJ) found that DFS’s liens were not barred by its failure to request a second review, because the administrative director (AD) had not adopted a fee schedule for interpreters’ bills as required in Labor Code section 4600(g). The WCAB denied Meadowbrook’s petition for reconsideration which argued that the WCAB lacked jurisdiction to resolve the billing dispute because 8 CCR 9795.3(b)(2) provided the necessary fee schedule as it described what was to be paid to interpreters. Meadowbrook petitioned for writ of review.

Labor Code section 4603.2, requires that a provider submit an itemized bill to the employer/insurance carrier to review for payment after services are rendered. If the employer disputes the bill, the employer must pay what is due and provide an Explanation of Review in the manner prescribed by the AD. If the provider disputes the amount paid, the provider may request a second review within 90 days of service of the EOR. Section 4603.2(e)(2) was amended as part of Senate Bill 863 and provides that if the only dispute is the “amount of payment” and the provider does not request a second review within 90 days, the bill shall be deemed satisfied.

The Court of Appeal disagreed with the WCAB and concluded that section 9795.3 (b) defines the “amount of payment” for purposes of bill review. The Court of Appeal further disagreed with the WCAB’s reasoning that the Administrative Director’s fee schedule would be applicable here only if it was adopted after the enactment of 4603.2, and agreed with Meadowbrook that section 9795.3, which was adopted before the amendments to 4603.2, met the statutory requirement that a fee schedule exists. As a result, DFS’s liens were denied due to its failure to request a second review and independent bill review.

The intent of Senate Bill 863 was to reduce costs and streamline the resolution of disputes which unnecessarily burdened the court system. The case is a reminder to providers and employers of the need of strict adherence to the administrative resolution procedures for all disputes including billing disputes.

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December 11, 2019