California Convicted or Indicted Physicians, Providers Filed $600 Million in Workers' Compensation Liens
Author: Marta Moakley, XpertHR Legal Editor
August 24, 2016
$600 million in liens filed against injured employees' claims for workers' compensation benefits have been filed by convicted or criminally indicted parties from 2011 through 2015, according to California's Division of Industrial Relations (DIR) and its Division of Workers' Compensation.
California supports lien filing in its workers' compensation system - the only state to do so.
"While California has made great strides in increasing benefits to injured workers, improving appropriate care and reducing employers' costs, we are pursuing legislation to prohibit criminal and indicted providers from lining their pockets through liens and to address the assignment of liens," said Christine Baker, DIR Director.
California has sought to address the lien concerns in the past. In 2013, Senate Bill 863 took effect and included a number of provisions to reduce costs by:
- Reducing the volume of lien claims and lien claim litigation in the workers' compensation system, including the reestablishment of lien filing fees to preclude frivolous filings;
- Creating an Independent Medical Review (IMR) system to remove most billing disputes from litigation; and
- Restricting the ability of third parties to collect on assigned lien claims.
However, many of the bill's reforms have proven difficult to enforce.
In an Issue Brief, the DIR describes assigned liens as "fertile ground for presenting fraudulent claims because they removed the dispute from the persons who actually provided or received the services in question." Assigned liens are especially prevalent in "denied claims," that is, claims that an insurer has already rejected.
Most lien claims are filed after the main case has ended and have been cited as a prime reason for perennially clogged court dockets. Using Q3 2015 data, 95% of all liens were filed in Southern California, with Los Angeles accounting for 67% of the filings.
The creation of the IMR system in 2013 allowed for the collection and analysis of expanded data sets, which can be instrumental in detecting fraud. The DIR will continue to research this issue and submit a report with its recommendation to the governor and the legislature by this fall.
In the meantime, legislation has been introduced to stay liens of physicians or providers who are criminally charged with:
- Workers' compensation fraud;
- Medical billing fraud;
- Insurance fraud; and
- Medicare or Medi-Cal fraud.
One of the bill's sponsors, Assemblymember Adam C. Gray, stated that under the bill, "doctors and medical providers who have been banned by either Medicaid or Medi-Cal for fraudulent billing will be automatically banned from Workers Compensation. They won't get paid a dime."
Assembly Bill 1244 passed the California State Senate yesterday on a 39-0 vote, and will next be presented to the California State Assembly for a vote before the August 31st deadline.