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The Fallacy of Competency to Testify

On June 24, 2019, the WCAB issued a Panel Decision regarding the interpretation of Labor Code Section 4903.8(d), requiring attestation that the billing statement truly and accurately describes the services or products that were provided to the injured employee “by a person competent to testify.”

The key phrase in the statute is “by a person competent to testify”. The recent panel decision, Luisa Isabel Rodriguez v. Kelly Services (October 28, 2019) 219 Cal. Wrk. Comp. P.D. LEXIS ___, discusses this requirement. In Rodriguez, supra, Defendant disputed the validity of the declaration, questioning the declarant’s ability to sign the declaration as “by a person competent to testify.”

At trial, the sole issue was the validity of the Labor Code Section 4903.8(d) declaration.

The Declarant, during two days of testimony, testified that he:

1. Worked as an attorney for the lien claimant for approximately 15 years and collects liens on their behalf;

2. Had job duties that included understanding billing procedures and codes, reviewing and negotiating bills, and reviewing surgical and medical reports;

3. Had reviewed over 10,000 operative reports in order to gain an understanding of what was billed for each particular type of service;

4. Spoke to pain management doctors to get a better understanding of the medical services provided and billed so that he could negotiate the billing;

5. Received education on decompression procedures and training on bill review practices;

6. Reviewed the operative reports to ensure that the services described in the operative reports were the same as those that were billed in the invoice;

7. Reviewed the medical and surgical reports pertaining to applicant’s treatment by Lien Claimant to ensure their accuracy, prior to signing the 4903.8(d) declaration;

8. Was not in the operating room during any of the procedures performed on applicant;

9. Had no formal training regarding CPT coding, and,

10. Based his declaration on Dr. Williams’ chart notes and reports.

The Declarant further testified that:

1. Lien Claimant performed multiple decompression and facet blocks injections at multiple levels in applicant’s back, which are detailed in the medical report;

2. The contents of the Lien Claimant’s invoice; and,

3. The meaning of each of the CPT codes in the invoice.

Defendant contended that:

1. Personal actual knowledge was required of the Declarant;

2. The declaration was invalid because the Declarant lacked competency to attest to the statements made in the declaration, specifically noting that declarant did not recall being in the operating room when the procedures were performed or talking with Dr. Williams about the procedures that were performed; and,

3. Because declarant’s knowledge of the matter was based on his review of medical reports, chart notes and billing statements that he lacked personal knowledge about whether the procedures were performed and properly billed.

The Appeals Board panel agreed with defendant that section 4903.8(d) requires the declarant to be a natural person competent to testify to the matters set forth in the declaration, but, noted that the statute does not define what it means to be “competent to testify.”

Accordingly, the panel looked to Evidence Code Section 702, which provides in pertinent part, as follows:

“…[t]he testimony of a witness concerning a particular matter is inadmissible unless he has personal knowledge of the matter. …A witness’ personal knowledge of a matter may be shown by any otherwise admissible evidence, including his own testimony.”

In reliance on that definition, the panel concluded that the Labor Code Section 4908.3(d) Declarant must:

1. Have personal knowledge that the billing statement accurately describes the services and/or products provided to the applicant and that those services and/or products were provided;

2. Be competent under other facts despite lack of his actual personal knowledge of the procedures;

3. Be aware that the procedure occurred but does not have to be present at the time the services were performed;

4. Show that he or she reviewed medical reports, chart notes and billing statements;

5. Rely on reports which were declared to be true and correct, under penalty of perjury, by the provider;

6. Be familiar with the billing procedures and CPT codes used by Lien Claimant;

7. Establish years of experience negotiating and collecting liens on the Lien Claimant’s behalf;

8. Review of thousands of operative and medical reports; and,

9. Demonstrate a firm understanding of the medical procedures that were performed in this case.

According to this decision, a declarant can rely on hearsay evidence, such as operative and medical reports, especially those that have been attested to by the medical provider as true and accurate under penalty of perjury. The Appeals Board noting that hearsay evidence is admissible in proceedings with the WCAB to determine the weight to be given to hearsay evidence provided the evidence is of substantial character to draw a reasonable inference. Other consideration for the competency of the Declarant is the Declarant’s training, work history, and extensive knowledge of the medical provider’s billing and coding practices. When taken together, such evidence can demonstrate the competency of the declarant.

What is left unclear is whether the burden to establish competency / incompetency is that of the Lien Claimant or the Defendant.

Evidence Code Section 702, cited by the court, states:

“(a) Subject to Section 801, the testimony of a witness concerning a particular matter is inadmissible unless he has personal knowledge of the matter. Against the objection of a party, such personal knowledge must be shown before the witness may testify concerning the matter.

(b) A witness’ personal knowledge of a matter may be shown by any otherwise admissible evidence, including his own testimony. “

The Appeals Board noted that the Labor Code Section 4903.8(d) declaration was under oath as to the facts in subsections (d)(1) and (d)(2), that is, the services or products described in the bill were actually provided and the billing statement attached applied to the services provided to the applicant. Once established in the Declaration, the burden then shifts to the Defendant to prove that the Declaration was invalid. While that is true with regard to the truth of the matters stated, under Evidence Code Section 702, that is not true with regard to competency.

There was absolutely no discussion in the decision of that portion of Evidence Code Section 702 which states:

“Against the objection of a party, such personal knowledge must be shown before the witness may testify concerning the matter.”

Furthermore, the decision of Sara Rush vs. ProCare Mobile Response, 2018 Cal. Wrk. Comp. P.D. LEXIS 75, a Board Panel Decision, provides:

“A declaration under penalty of perjury signed and executed in California, even if incompetent, is sufficient to establish fact and support an order or judgment where the declaration is received without a proper objection or motion to strike. (Nalley’s, Inc. v. Corona Processed Foods, Inc. (1966) 240 Cal.App.2d 948.) Further, although a declaration under penalty of perjury contains hearsay and mere conclusions, it is competent evidence if received without objection. (Waller v. Waller (1970) 3 Cal.App.3d 456.)”

Accordingly, without a prior objection, there is no grounds to contest competency.

Thus, in order to contest a Declaration based on a lack of competency, the following must be considered:

1. An objection to the Labor Code Section 4903.8(d) Declaration must be made no later than at the time the Pre-trial Conference Statements is submitted;

2. Objection made is to the competency portion of Labor Code Section 4903.8(d);

3. Require proof of the Declarant’s knowledge and experience such as review of medical reports, chart notes and billing statements combined with familiarity with the billing procedures and CPT codes used by Lien Claimant and years of experience; and,

4. Argue that the burden of establishing competency after an objection lies with the Declarant and/or Lien Claimant rather than the Defendant.

By  Garry S. Shay, Esq., Associate Attorney, Van Nuys Office, February 2020