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COPY SERVICE HAS TO ACTUALLY PROVE ENTITLEMENT TO REIMBURSEMENT – WHAT A CONCEPT

In a victory for defendants, the WCAB en banc held that a medical legal provider has the initial burden of proof that it complied with Labor Code §4620 showing that its services were “reasonably, actually, and necessarily incurred” and defendant did not waive this objection by failing to address this issue in an Explanations of Review (EORs.)

In Ashley Colamonico v. Secure Transportation (November 14, 2019), the lien claimant was a copy service who had issued several subpoenas per the applicant’s request. Lien claimant issued numerous invoices for its copy services. Defendant issued eight  EORs.

In its decision, the WCAB initially refers to Labor Code §4622 which provides the framework for reimbursement of medical legal expenses emphasizing that Labor Code §4622 is not applicable unless there has been compliance with Labor Code §§4620 and 4621.  The Board then notes that copy service fees are considered medical legal expenses under Labor Code §4620.

As such, the Board explains the lien claimant has the burden of proof to show all elements necessary to establish its entitlement to payment for a medical legal expense. Thus, a lien claimant is required to establish that (1) a contested claim existed at the time the expense was incurred; (2) the expenses were incurred for the purpose of proving or disproving the contested claim; and (3) the expenses were reasonable and necessary at the time they were incurred. There is a contested claim when (1) the employer knows or reasonably should have known of an employee’s claim for workers’ compensation benefits; and (2) the employer denies the employee’s claim outright or fails to act within a reasonable time regarding the claim. In other words, the lien claimant must show a benefit being sought has been denied by defendant.

The WCAB further held that the defendant did not waive an objection based on Labor Code §§4620 and 4621 by failing to raise such objection in an EOR. The Board explains the 1993 amendments shifted the burden from defendants to the provider who now has the initial burden to prove that its services were reasonable and necessary.

However, the Board cautions defendants that if they challenge the reasonableness and/or necessity of a medical legal expense for the first time at a lien conference without first objecting in an EOR, they expose themselves to penalties and interest and even sanctions for bad faith delay.

In summary, the medical-legal lien claimant has the burden of proof that its services are reasonable and necessary at the time they were incurred; and defendant did not waive this objection by failing to address this issue in an EOR.

By Pamela L. Goe, Esq., Senior Counsel, Bakersfield Office (December 2019)