Medical-Legal Expense Claims Subject to Lien Activation Fee, WCAB Rules

Publish Date:May 14, 2013
Summary:
In an en banc decision handed down on May 7, 2013, the Workers’ Compensation Appeal Board ruled in Martinez v. Terrazas that medical-legal expenses cannot be sought though the filing of a petition for costs under Labor Code Section 5811.

In an en banc decision handed down on May 7, 2013, the Workers’ Compensation Appeal Board ruled in Martinez v. Terrazas that medical-legal expenses cannot be sought though the filing of a petition for costs under Labor Code Section 5811. Instead, a claim for medical-legal expenses must be sought through the Labor Code lien process which includes the payment of a lien activation fee.

New Age, the medical-legal expense claimant in this case, filed a lien for document copy services in 2011 when the lien filing did not require the payment of a lien activation fee.  SB 863, which went into effect on January 1, 2013, enacted provisions which subjects liens filed before January 1, 2013, or on or after that date to a lien activation fee. In an apparent attempt to avoid payment of the fee, New Age withdrew its lien and filed a Labor Code Section 5811 petition for costs requesting the same expenses it had previously sought to recover by its lien.

The WCAB ruled that New Age was not allowed to seek its medical-legal expenses though the filing of a Section 5811 petition.

In ordinary circumstances, when a lien claimant withdraws its lien, it relinquishes its right to recover the expenses claimed by the lien. The WCAB concluded that it would be unfair to strictly apply that rule to New Age because at the time New Age withdrew its medical-lien claim and instead filed its Section 5811 petition for costs, it was uncertain how SB 863 would be interpreted and there was no binding authority on whether New Age’s action was permissible.

As a result, the WCAB issued this ruling: “Given the uncertainty of the law at the time, and given that no order has issued formally dismissing New Age’s withdrawn lien claim, we will affirm the denial of its petition for costs, but deem its lien to be reinstated.  This reinstatement approach shall be followed in all similar cases in which, on or before the date of this decision, a lien was withdrawn, it was not formally dismissed, and a petition for costs was filed.  However, our binding en banc decision will apply prospectively to any lien withdrawals and/or petitions for costs filed after the issuance of this decision.”

A copy of the WCAB’s decision is available at www.dir.ca.gov/wcab       

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