In California Insurance Guarantee Association v. Workers’ Compensation Appeals Board,
which was filed on December 16, 2014, the California Court of Appeal (Fourth Appellate District) held that workers’ compensation medical billing disputes that were pending before a workers’ compensation judge prior to the enactment of SB 863 are not subject to provisions in SB 863 which created an independent bill review (IBR) process.
Several employers and insurers disputed bills charged by ambulatory surgical centers for the centers’ treatment of injured employees covered by workers’ compensation. The treatments were provided between November 2000 and December 31, 2003. During the 17-day trial before the workers’ compensation judge, the employers and insurers and the manager of the centers presented arguments and evidence regarding the reasonableness of the bills.
On January 1, 2013, after the trial and while the case was still pending before the judge, SB 863 went into effect as law. Among other things, SB 863 created an IBR process by which billing disputes between employers and medical care providers are to be resolved administratively. The IBR process includes a number of prerequisites and deadlines.
On February 1, 2013, the workers’ compensation judge handed down his decision on the reasonableness of the bills. The Workers’ Compensation Appeals Board (WCAB) affirmed the judge’s decision.
The employers and insurers filed a petition for review with the Court of Appeal. The petitioners contended that as a result of SB 863, the WCAB lacked jurisdiction to resolve disputes over the surgical centers’ bills. The petitioners pointed to section 84 of SB 863 which states, “This act shall apply to all pending matters, regardless of the date of injury, unless otherwise specified in this act, but shall not be a basis to rescind, alter, amend, or reopen any final award of workers’ compensation benefits.” The petitioners argued that since SB 863 does not specify that its IBR process applies only to future billing disputes, the IBR process must apply to the billing disputes that were pending when SB 863 went into effect.
The Court of Appeal rejected the petitioners’ argument. Examining SB 863 in its entirety, the court concluded that the Legislature did not intend to apply SB 863’s IBR process to pending medical bill disputes.
In its opinion, the court explained, “Attempting to apply section 84 of SB 863 in this case would leave these parties without a process by which to have their dispute resolved by a third party, since the new IBR process may be utilized only if certain conditions precedent have been met, and the deadlines for meeting those conditions have passed. Leaving these parties without a viable process to decide their dispute cannot be what the Legislature intended. We conclude that in creating the IBR process, the Legislature intended to establish a new dispute resolution procedure that would apply to disputes arising on or after the effective date of the legislation, and not to disputes like this one that were pending at the time the legislation went into effect.”
In affirming the Workers’ Compensation Appeals Board’s decision, the Court of Appeal held as follows: “Our examination of the objectives to be achieved by the legislation, public policy, and the statutory scheme together leads us to conclude that SB 863 does not divest the Board of jurisdiction over billing disputes, thereby requiring that ongoing litigation involving such disputes be abandoned. We therefore reject petitioners’ contention that SB 863 divests the Board of jurisdiction over the billing disputes at issue in this matter.”
A copy of the Court of Appeal’s opinion is available at www.courts.ca.gov