SB 863 Cheat Sheet - Law Offices of Bradford & Barthel

SB 863 has had a very significant impact on the way that cases are being handled. Here is a quick breakdown of some of what has happened:

Liens

Lien claimants have to pay a fee to the WCAB or they will be dismissed.
Initially courts were reluctant to dismiss lien claims that had been filed but for which fees had not been paid. Then judges were mandated to do so.
The first couple of months after the mandatory dismissal rule was in place, there was “lien carnage” – i.e. significant numbers of lien claimants not paying the fee.
Now we are seeing that lien claimants are more aware of this and are paying the day before, or right up until the actual time of a conference.
This applies mostly to claimants that filed before 1/1/2013 since lien claimants that filed after have to pay their fee when they file.
Lien cases are being pushed to trial, but most judges in LA, MDR, VNO offer a “one time continuance” to another lien conference. Dismissals still happen but lien claimants who paid the fee get a bit more time to prepare for trial. Also gives defendants an idea of who will not resolve who has paid the fee and they can get their experts and bill reviews for the next conference and then proceed to trial.
Now that the lien fee rules are clearly in place, we’re seeing that more lien claimants are paying the fees, particularly if they have large balances. Those who pay the fees are sometimes unwilling to resolve for less than the fee amount (i.e. if 10% was less than $100).
Lien fee dismissals will gradually disappear, so if you have cases with lots of liens, you may want to file a DOR now to seek dismissal of claimants that didn’t pay the fee. BUT on January 1, 2014, all non-paid liens will be dismissed as a matter of law, so if you draw attention to a particular lien by filing a DOR now, they may pay the fee on yours, but not on others.
After January 1, 2014, all liens that are active will have paid the fee so the dismissal issues will likely disappear.
After July 1, 2013, lien disputes involving fee schedule will be sent to “independent bill review.” You might still want to have bill reviews available to submit to IBR as an “exhibit” (not a lot of these have happened so far so the “rules of engagement” aren’t clear but it makes sense that the defense should be able to submit something.) You will also need to attack medical necessity, number of treatments, or even whether the billed treatment took place.
Recommendation: Get SIU involved to check trends across all the cases in a venue to see whether patterns of treatment abuse come up. Go after the doctors via cross-exam if there is any question as to whether they are providing billed-for services, and use the results across the board in the case load.

Permanent Disability

The purpose of SB 863 was to increase PD /decrease costs.
PD to increase to $290 per week over next 2 years.
PD monetary levels have gone up, but no PD is being awarded for psyche for post 1/1/13 injuries.
Since no more sleep / sex dysfunction / psyche add-ons for underlying physical injury cases, watch for emerging areas of medicine to skirt the psyche issue. You may need to get experts to tie non-psyche complaints to psyche stressors. This will be an emerging area of litigation. Treatment / FMC still available.
PD ratings have increased since all use the same 1.4 modifier.
Right now, A/As haven’t figured out the system and are trying to increase the PD on their old cases to make money off them, and we’re seeing more psyche/sleep/internal add-ons on old cases. Psychiatrists are still in business for several more years. Also some A/As are filing psyche claims for “treatment” as future medical care on psyche can still be settled.
PD modifiers for mod/alt are different now.
The DIR is supposed to be coming up with a new list of occupational modifiers that will probably increase PD as well.
PD Advances can be deferred IF: Prior to the Award of PD, the IW returns to the SAME employer and receives 85% of the pre-injury wages and compensation, OR the IW goes to some other employer and earns 100% of pre-injury wages and compensation. (LC § 4658(d) bumps up or down are eliminated for DOIs on or after 1/1/13.)
Handling the deferral is tricky and there are some unresolved answers. You’re supposed to make an offer of mod-alt work within 60 days of receiving the 1st report of the PTP, QME, or AME talking about mod-duties.
The deferral no longer applies if a case resolves via C&R or Stip. PD is supposed to start when TTD stops.
Return to Work fund: The DIR handles this and is supposed to apply when the PD is “proportionately low” compared to wage losses after a workplace injury. I don’t think we’ll have to worry about these since the state will handle the fund. The A/A may be involved like in a SIBTF situation, but we’ll be out of it.
SJD Vouchers for DOI after 1/1/13- The amount is always $6000 no matter what. There will not be litigation over the amount so long as it’s used at a facility within the Eligible Training Provider List. There is also $1000 for a computer or other related items. (There are other voucher rules as well.) Practically, there will probably be a lot of computers purchased, but unless an IW is really motivated, not likely to see a lot of training. It expires the latter of either 2 years after the voucher was issued or 5 years post DOI.

Independent Medical Review

Applies to all injuries after 1/1/13 and all URs after 7/1/13, i.e. if there’s a UR now, it applies.
Used on questions of whether something is medically necessary. If it is a denied case, dispute on liability must be addressed first. If there are admitted/denied body parts, no IMR for a denied part unless the employer agrees to it.
Doctors need to request treatment using an RFA-1 form. They are starting to appear with more frequency.
If UR denies, the applicant makes an IMR-1 request within 30 days otherwise UR is final. (A/As are likely to appeal EVERY UR denial or could be tagged with malpractice for letting a UR denial slip through.)
The claims examining agency has 15 days after the IMR request to provide documents and records. If “imminent” or “serious” only 24 hours. These are TIGHT DEADLINES.
The best strategy is to set up files so the appropriate docs can be instantly identified and sent out electronically within 24 hours. Organization of claims files will be of major benefit here.
Some UR entities are also going to assist with sending IMR the appropriate documentation right away, but claims needs to be involved to make sure they are aware of the A/A’s IMR request.
A large amount of records will potentially go to IMR: All treatment meds within a year of the RFA, all reports and records of treatment identified by the RFA, the UR, claims’ UR correspondence to the applicant, all materials sent by the applicant to claims supporting the request, response to any additional issues raised by A/A in the IMR-1, and “newly discovered or developed records.”
Copies will also have to go to the applicant and the treating MD in addition to IMR.
Applicants only have to send the treating physician recommendation of medical necessity, “reasonable information” supporting the position of med necessity, and justification on an urgent/emergency basis if applicable.
A/A’s may throw everything at the wall to see what sticks. Many have indicated this is exactly what they will try to do to increase costs for the claim.
The penalties of delaying the process can be up to $5,000 per day.
When the IMR receives the records, they will designate a medical reviewer (or more if case is complex), may request things which claims has 5 days to respond to, and the IMR makes determination within 30 days.
For all intents and purposes, the IMR decision is final. It is VERY hard to appeal.
UR is going to need to start making sure that denials are based on substantive medical evidence. In other words, they will need to do more than simply deny because they couldn’t get a phone call back from the treater, etc.
To help with this, I would recommend making sure that all claims have good MPN’s in place. Don’t be afraid to cross-examine treating physicians if trends come up regarding questionable treatment requests. Try to find a way to have doctors request what is reasonable per UR as far as treatment goes, and be prepared to challenge ridiculous requests at the outset. Have documents ready to IMR at a moment’s notice. Consistency in file handling is key. Make sure that defense counsel has access to this information as well. If UR denies a treatment request, be prepared for an IMR request. If a UR denial makes sense, prepare to defend it at the IMR level, even if it takes a lot of effort.

New proposals for changes to existing regulations, and introducing new regulations are arriving each month. Check back with us for further updates as they become available.

Good luck!

Michael Peabody

Michael D. Peabody is a Partner out of B&B’s Woodland Hills office. He can be reached at mpeabody@bradfordbarthel.com.

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