This blog post is meant for applicant attorneys and their copy services. The RULES about WHEN and HOW to order records from a copy service as a medical-legal expense changed dramatically on JULY 1, 2015 through enactment of the copy service fee schedule regulations.
Applicant attorneys who ignore these changes and continue to order records from copy services “whenever they want” are likely setting their firm up for serious financial risk further down the road. The risks are from copy services who FAIL in the next 12-18 months because too many records were ordered improperly. The failed copy service owner (or future owner of their liens) can petition the Judges under Labor Code Section 5813 to hold the law firm accountable for accruing the services inappropriately as medical-legal expenses. Before you dismiss this as improbable, I’ve seen Judges do this on more than one occasion. In the past, copy services mostly withdrew their lien to protect the ordering party, but once a copy service starts to FAIL under this fee schedule, or sells their liens to another party, all bets are off. For example, I recently heard of a copy service suing a law firm in civil court because the provider had a written agreement on their order forms that the ordering party would pay the fees if not collected from the employer/carrier… and that the civil court Judge has already ruled against work comp as the exclusive remedy. Trust me.. this is just the tip of the proverbial Iceberg.
With this new fee schedule, the perfect storm may be approaching. You can certainly CONTINUE to order records from a copy service, but you have to follow certain RULES if you intend to make sure the employer/carrier is responsible for the payment – and not YOU.
RECORDS CAN ONLY BE ORDERED UNDER THESE CIRCUMSTANCES:
After many discussions with my partner and attorney Warren P. Schneider, we’ve come to the opinion that records can only be ordered from an applicant copy service when ALL of the circumstances below are TRUE:
- THE DEFENSE HAS NOT SERVED SUBPOENAS FOR THE RECORDS YET
- THE DEFENSE HAS NOT SERVED THE RECORDS YET
- MORE THAN 30-DAYS HAS ELAPSED SINCE YOU SERVED A WRITTEN REQUEST FOR THE RECORDS ON THE EMPLOYER/CARRIER
Keep in mind that I am not a lawyer, and this blog post is not meant to be legal advice. I am just trying to point out the obvious here, based on my 30+ years in this business, and deep discussions on the matter with my partner, Warren.
CLICK HERE if you want to read the detail and authority for these limitations...
AUTHORITY FOR LIMITING COPY ORDERS TO ONLY THE THREE SCENARIOS LISTED:
- THE DEFENSE HAS NOT SERVED SUBPOENAS FOR THE RECORDS YET: See CCR Section 9982(c). The law office and copy service must make sure that the employer/carrier has not served any subpoenas on the law firm for records from the same locations (record custodians) that the law firm intends to subpoena through their own copy service. In other words, don’t use “defense notices” to order records from a copy service.
- Many law offices take the “defense notices” that were served on them from the employer/carrier and give those notices to an applicant copy service as a new order for copying. The law firm and copy service should expect that every Judge in the state will find this practice duplicative and unnecessary under CCR Section 9982(c) and Labor Code Section 4621(a). Ordering records on the same locations that you already know another party has subpoenaed (and offered you) could be considered bad faith by a WCJ in light of the clear limitations provided in CCR Section 9982(c), “Allowable Services.”
- THE DEFENSE HAS NOT SERVED THE RECORDS YET: Make sure the employer/carrier has NOT already served the applicant law firm with RECORDS from the same locations that the law firm intends to subpoena records from now.
- See Labor Code Section 4621(a), the services must be reasonable and necessary, and ordering records from a copy service that have already been served upon your office certainly runs the risk of being found un-necessary by a Judge. In the Old Days prior to the fee schedule the standard position was that the applicant attorney had a right to his own independent discovery at the defendant’s expense, but the fee schedule and LC 5307.9 clearly changed that. The intent of the legislature and the administrative director appears to be that applicant attorneys should accept records from the defendant whenever possible. Read CCR Section 9983(e)(3) where the administrative director only allows the fees for those types of records if the records are not otherwise available without a subpoena, or at a LOWER COST. This will be the new standard used by Judges when deciding if services were reasonable or necessary, or not.
- MORE THAN 30-DAYS HAS ELAPSED SINCE A REQUEST FOR THE RECORDS HAS BEEN MADE UPON THE EMPLOYER/CARRIER: The law firm must have made a written request for all relevant records that are in the employer/administrator’s possession under CCR Section 9982 and LC Section 5307.9, AND more than 30-days must have elapsed before placing an order with a copy service for records.
- WHY THE LAW OFFICE MUST MAKE THE REQUEST IN THE FIRST PLACE: The main reason is that we can reasonably expect most Judges (and the WCAB) to interpret the language of Labor Code Section 5307.9 and CCR Section 9982 as meaning that a request for records in the employer/carrier’s possession is a requirement before ordering records. With that said, the prudent law office and copy service will also consider whether or not there is a CONTESTED CLAIM before incurring ANY medical-legal expenses. The Martin case in 2013 pretty much eliminated copy service collection under Labor Code Section 5811, and this has heightened the sensitivity to the “contested claim” requirement as it pertains to ordering records. I’ve provided a solution to this issue below, under “Click HERE for discussion on the need for a CONTESTED CLAIM.”
- ONCE THE REQUEST IS MADE, THE LAW OFFICE SHOULD WAIT 30 DAYS BEFORE PROCEEDING: If the copy order is placed prior to 30-days from the service of the request, and the copy service issues and serves (delivers) Subpoenas right away, a Judge would likely find that the services defined under CCR Section 9983(a) or (b) were “incurred” as defined by Labor Code Section 4621(a) before the statutory deadline. Keep in mind that nobody can say at this point how the WCAB may decide this issue in the future, as it’s not entirely clear as written. Therefore, prudent law offices should consider waiting the 30-days before placing the order so that – years from now – the copy service isn’t trying to collect their fees from the ordering law firm because they didn’t wait the statutory 30-days before placing the order.
So, there we have it… if ALL THREE of the situations above have not been met, then the law office is taking a RISK by placing an order for records with a copy service… and the copy service is certainly taking a risk accepting it. The good news is that none of this is particularly burdensome or time consuming. You just have to give it some attention before you order records.
CHECKLIST BEFORE ORDERING RECORDS
I suggest the law office STAFF go through the following STEPS before ordering any records on the case:
STEP 1: Serve a request on the employer/carrier to provide “all records in your possession that are relevant to the injured worker’s claim.” Make sure you use a PROOF OF SERVICE when delivering this request, and serve it on both the employer and the claims administrator/carrier. Keep a copy of this request and ATTACH IT to all copy service order forms when you incur those expenses.
STEP 2: Tickler the file in your case management system to come up in 35 days (30 days plus 5 for mailing), which is when you will initiate the order for records.
STEP 3: After Step 2 has completed (the 35 days has gone by), look CAREFULLY through the FILE, both in the case management system AND paper files, and make sure there are NO RECORDS and NO SUBPOENAS in the law office’s possession that pertain to the same locations being ordered from the copy service. If you find records or subpoenas for those same locations, DON’T ORDER THOSE RECORDS. If the other side served some records, but not from the locations you intend to order records from… and you see no notices/subpoenas for those locations, THEN you can still proceed with ordering those locations.
If you plan to SKIP the request in step 1 altogether, assuming that CCR Section 9982 and LC Section 5307.9 does not state clearly that such a request MUST be made, then you should click below and read about the need for a contested claim. Otherwise, you can read on…
CLICK HERE FOR DISCUSSION ON THE NEED FOR A CONTESTED CLAIM
An applicant law firm may only incur medical-legal expenses – like records – when there is a “contested claim” according to Labor Code Section 4620(b). When the employee’s claim (for benefits) is accepted and all claimed benefits are being paid timely, there is NO contested claim under LC Section 4620, and medical-legal expenses cannot be incurred. (See Martinez vs Ana Terrazas, 78 Cal. Comp. Cases 444.) When all other benefits are accepted and being paid timely, the 30-day request procedure defined in CCR 9982 and LC 5307.9 creates a request for benefits (the records are a benefit) and should be sufficient to prove a contested claim existed before the records were ordered. So, in this situation, the fee schedule becomes very useful… it sets up a benefit request procedure and defines a reasonable deadline for compliance.
Here is how this would work:
- Serve the employer/administrator the written request under LC 5307.9 and CCR 9982 (b) for all records in their possession relevant to the injured worker’s claim. This is a request for a benefit. Then, …
- Wait the statutory 30-days from that request under CCR 9982(b) and (d) before ordering records from a copy service. Don’t forget to add five extra days for mailing (35 days, total).
- Once the request has been served and the 30-days have elapsed without the records you requested being served, the claim is now “contested” under LC Section 4620(b)(2), and records may be ordered.
The law office might consider printing and posting a CHECKLIST such as this near where the staff that orders records sit in the office.
If you ignore these rules your law office could be held liable in the future for all the copy service’s denied medical-legal liens, because you knew or reasonably should have known it was inappropriate to place the orders when you did. Copy services usually do not make the decision to order records on the case – the attorney does. And copy services will not usually have the facts about the claim and what is in the attorney’s file before ordering records, so it is the law office’s responsibility to know the law and manage the expenses they incur responsibly.
Let’s assume the law office allowed a cost for records to be incurred outside of the rules in the fee schedule regulations, and those costs were denied by the employer/carrier. Let’s also assume the copy service filed a lien, eventually became a party, and the Judge indicated at the Lien Conference that he will deny the copy service lien based on these same grounds. All the copy service (or purchaser of the copy service’s receivables) needs to do is file a petition under Labor Code Section 5813 that requests the law firm be held responsible for the improperly ordered services (as sanctions). After service of the notice of trial on the ordering law firm, the Judge may award the unpaid invoice against the applicant’s attorney who placed the order. The Judge might even order additional sanctions to be paid to the defendant for having to defend against the defective lien claim. And like I said before, I’ve personally witnessed Judges doing this in the past, so I’m not just making this up.
I hope I’m wrong and none of this happens. I don’t have a proverbial horse in this race, but I care about the stake holders in this industry. I am writing about this NOW because the fee schedule is only a couple of months old and what I see as an obvious long-term outcome can easily be AVOIDED. There just isn’t enough profit in post-fee-schedule copy service invoices to take risks with these orders. The rules are plain for all to see, and doing it “right” really won’t take much more time or effort.
Good luck out there, and I would love to hear your comments on this post.