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Medical Liens: How the Lien Attorney
Can Help You Protect Your Client
and Yourself



By Robert A. Feinglass, Esq.

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It is absolutely essential that some care, particularly timely care, be provided on a lien basis. “It is of more than theoretical importance in the workers’ compensation system that medical providers be paid promptly and treated fairly for without them the entire benefit system would fail.(American Psychometrics Consultants, Inc. v. WCAB) (Hurtado) (1995) 36 Cal.App.4th 1626, 1640, 60 CCC 559, 569.

This necessary medical care requires providers willing to wait to be paid and insurers that advance the costs of care and file liens for reimbursement. Sometimes a lien claimant’s attorney can make valuable contributions to the applicants’ attorney’s (AA) case.
 
Sometimes a lien claimant’s attorney can make valuable contributions to the applicants’ attorney’s case.

See the author in action in
My Favorite Case.
 
I. Two situations in which a lien claim can come back to bite the applicant and the AA.

First, ordinarily AAs do not need to worry about medical lien claims. If your client is a Medi-Cal recipient for care alleged to be work-related, however, you as his or her attorney have a legal duty to notify Medi-Cal. Failure to fulfill this responsibility can result in personal liability on the part of the attorney for the amount of the Medi-Cal lien. I do not know the law on Medicare, but I would assume that it is similar.

Another situation requiring care involves disputed liability cases. A bill for services rendered (as distinct from a claim by a medical payer for reimbursement of sums advanced) does survive a take-nothing. The qualified provider has a normal right to a fee for services rendered. The fee may be governed by the Labor Code if there is an industrial injury, but if not, the applicant/patient still has to pay the doctor bill. A settlement that does not finally resolve direct provider liens needs “hold harmless” language or “pay, adjust or litigate” both the bill and lien regarding the claim of the direct provider. Exceptions include when the provider is not properly credentialed or in an industrial case the provider has failed to file a lien claim within the statutory time frame, or when the treatment is provided outside the MPN
 
Ordinarily AAs do not need to worry about medical lien claims, but they do need to include CYA language in the C&R.
 
II. In certain cases, usually those involving large medical costs, a lien claimant can obtain independent discovery, including its own separate medical-legal evaluation.

In a case of sufficient size, a lien claimant can provide crucial AOE/COE support, and possibly PD support. I’ve had a number of cases in which I represented a hospital or a payer in a case involving substantial dollars for inpatient care, in which as lien claimants entitled to prove up a right to payment or reimbursement, we have obtained what turned out to be the decisive med-legal evidence. I recall one such case in which Dr. Panting was the AME, and issued a nonindustrial cardiovascular report. In deposition set by the AA, in my turn I was able to establish that Dr. Panting had entirely omitted to take a history of job stressors before issuing his opinion. Because he was an AME, applicant was unable to obtain a rebuttal report. On behalf of the lien claimant, I obtained permission from my client to spend the money to seek our own independent medical-legal evaluation. The report came back industrial. I believe applicant’s case settled for $50,000.
 
A lien claimant can provide crucial AOE/COE support, and possibly PD support.
 
When a case is large enough to justify the investment by the lien claimant, and the facts are amenable, a lien claimant may obtain a decisive report (which it must pay for, win or lose). This is the more likely because the lien claimant’s report will usually follow a situation in which there is a yes and a no, or an inadequate or adverse report by a PQME or AME. It is good for the AA to bear in mind that the lien claimant is not bound by the PQME/AME system. The lien claimant has a constitutional due process right to conduct discovery, and to bring evidence justifying its right to be paid. We can help.
 
The lien claimant has a constitutional due process right to conduct discovery, and to bring evidence justifying its right to be paid.
 
By the same token, as a proactive lien claimant I have also been able to assist AAs in other ways. Defendants tend to bully lien claimants. When they can’t, sometimes the lien claimant can bully the defendant. As a lien claimant I have successfully moved to exclude documents offered into evidence by defendant but not served on lien claimant, where the documents bear on lien claimant’s right to recover, notably on the issue of AOE/COE. It is common for the defendant to ignore the lien claimant to and through the MSC. In cases where I am involved, this is a mistake. The WCJ cannot easily save the careless defendant in those cases; continuances solely to allow a non-serving party to rectify its error are expressly disapproved in Co. of Sacramento v. WCAB (Estrada) (1999) 64 CCC 26.

In depositions and at trial, as a lien claimant I have helped to strengthen favorable testimony and to attack unfavorable testimony. In addition, the proactive lien claimant will brief controversies alongside the AA where the issues bear on the lien claimant’s right to an award. This includes trial briefs, recons and answers, and appellate work.

Lien claimants can also make the AA (and defendant) aware of penalty situations with respect to unreasonable delay. At the present time, lien claimants are barred from seeking direct recourse (i.e., filing a DOR) until the case-in-chief is “resolved.” LC § 4903.6 (b). This provision is obviously intended to protect applicants who should not be rushed into hearings before their discovery is complete.
 
The proactive lien claimant’s attorney can help the applicant’s attorney with briefs for trials, recons and appeals.
 
There is, however, no statutory definition for the term “resolved.” What this has meant is that even when liability for medical costs is clear, defendants will use this provision to stall. A lien claimant can argue that where the threshold issue of industrial liability is “resolved,” the “case-in-chief” is arguably resolved and there is no reasonable basis for continued stalling by the defendant under this statute even though eventual issues such as PD or apportionment may remain unresolved. A lien claimant’s attempt to take action on an obvious lien in coordination with the AA by filing a DOR, accompanied by a letter from the AA advising that applicant has no objection to the lien claimant’s proceeding, can be a means to put pressure on a recalcitrant defendant, including raising penalty issues and sanctions for tactics that are frivolous and solely intended to cause unnecessary delay. Even if the request is denied, the lien claimant may be able to put its (and applicant’s) outlook before a WCJ. In a situation in which payment of liens is simply tabled without regards to the merits solely based on 4906(b), penalties, payable to the applicant, may be in order.

In summary, and within the context of the specific, concrete legal situation, two heads can be better than one.
 
In a situation in which payment of liens is simply tabled without regards to the merits solely based on 4906(b), penalties, payable to the applicant, may be in order.
 
III. Protecting your client in settlement

In settling cases by C&R, it is always important to make sure if possible that the claims of lien will not fall back on your client. The “hold harmless” or “pay, adjust, or litigate” provisions may not be enough to protect your client. I encourage every AA to include, particularly with respect to direct provider liens, language that defendant will “pay, adjust, or litigate the lien and bill of….” That way, the bill is covered even if there is subsequent litigation between the defendant and the lien claimant resulting in a take-nothing on the lien. The bill will still be the responsibility of the defendant.
 
The “hold harmless” or “pay, adjust, or litigate” provisions may not be enough to protect your client.
 
This is important because to earn a fee on a lien award under §4903.2, it is not sufficient to prove up liability for the lien: There must actually be both a lien and an award. Usually proving up liability is what the AA must do for his own client and is not, in itself, sufficient to get a fee on the lien. Then there are five conditions: (1) the lien claimant must have notice and opportunity to be heard at “all hearings following the filing of the lien”; (2) lien claimant must receive a notice of intent to award the AA a fee. This is consistent with due process, giving the lien claimant an opportunity to object; (3) lien claimant must have had the opportunity to participate in proceedings and have failed to take advantage of that opportunity; (4) there must have been “bona fide issues respecting compensability, or respecting allowability of the lien, such that services of an attorney were reasonably required;” and (5) The case must not have been resolved by C&R. In addition, the percentage recovery on the lien may not exceed the percentage recovery of the fee against the applicant.

As you can see, the road to an AA fee on a lien award is not an easy one.
 
To earn a fee on a lien award under §4903.2, it is not sufficient to prove up liability for the lien.
 
In the event that you are aware of a potential lien that has not been filed by the provider or payer, an easier way to get a fee on a lien not previously filed is to refer it to me. If I am retained to represent the lien claimant I share 30% of my fee with the referring attorney. Check out my website, www.bobfeinglass.com, for further information.

If you have questions about specific situations, feel free to contact me directly. I can be reached at (415) 218-0672 or by email at bobfeinglass@comcast.net.

Comments and criticisms are welcome!
 
An easier way to get a fee on a lien not previously filed is to refer it to an attorney specializing in medical liens.
 
Robert Allen Feinglass has been practicing law since 1986 and workers’ comp lien law since 1988.

Law Office of Robert Feinglass
130 Frederick Street, #101
San Francisco, CA 94117
Tel: (415) 218-0672
Fax: (415) 861-5306
Email: bobfeinglass@comcast.net
Web: www.bobfeinglass.com