California: The OMFS as a Maximum Fee Schedule

Lien claimant found not entitled to excess fees

In Holder v. Troy Christian Adventure Limousine, 2015 Cal. Wrk. Comp. P.D. LEXIS --, the WCAB affirmed the WCJ’s finding that lien claimant David Payne, M.D., was not entitled to fees above those set forth in the Official Medical Fee Schedule (OMFS) due to the alleged extraordinary nature of medical services provided during the period 11/30/2009 through 12/31/2012 to the applicant chauffer, who suffered an industrial cumulative injury over the period ending 6/25/2014.

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The WCAB concluded that passage of new Labor Code § 5307.1 [LC 5307.1], effective 1/1/2004, invalidated the provision in 8 Cal. Code Reg. § 9792(c) [R 9792] permitting fees in excess of the OMFS for extraordinary medical services rendered because the new provision deleted language in former Labor Code § 5307.1(b) allowing for such fees.

With the passage of new Labor Code § 5307.1, the Legislature clearly established that the 2004 OMFS was intended to be a maximum fee schedule, and that, despite the lien claimant’s attempt to distinguish this case, the WCJ properly relied on holdings in cases addressing 8 Cal. Code Reg. § 9792.1(c)(2) [R 9792.1] (applicable to inpatient services of specified trauma centers) in finding that the lien claimant was not entitled to excess fees, because the enabling statute for both 8 Cal. Code Reg. § 9792.1(c)(2) and 8 Cal. Code Reg. § 9792(c) was repealed when new Labor Code § 5307.1 became effective, thereby invalidating both regulations without distinction.

In addition, the WCAB, denying removal, affirmed the WCJ’s finding that the WCAB had no jurisdiction under Labor Code §§ 4603.2 and 4603.3 [LC 4603.2, 4603.3] over the lien claimant’s fees for services rendered on or after 1/1/2013, because such fee disputes must be resolved through the independent bill review process.

Commentary:

We’ve asked Suzanne Honor-Vangerov for her perspective on this case. According to Honor-Vangerov, the Holder case “further supports several legal concepts that have been recently been put forth by both the WCAB and the DWC.”

“Judge Brotman's Report and Recommendation on Petition for Removal was an excellent analysis of the current state of statutes, regulations and case law,” observed Honor-Vangerov. “His arguments are well reasoned and right on point. They only thing he left out was the revision of 8 CCR 9790-9792.1 that went into effect on February 4, 2015, which made it very clear that DWC intended those regulations would apply only to dates of service prior to January 1, 2004.”

Rule 9790 [R 9790] provides in pertinent part: “The rules and regulations contained in this Article are adopted pursuant to the authority contained in Sections 133, 4603.5, 307.1 and 5307.3 of the California Labor Code. Sections 9790.1-9792.1 and Appendices A-C, contained in this Article, are not applicable for physician services rendered and inpatient hospital facility services for discharges after January 1, 2004, unless otherwise specified in this Subchapter 1. Administrative Director - Administrative Rules.”

As explained by Honor-Vangerov, “It is important for the regulated public to understand that the Official Medical Fee Schedule is, in fact, a maximum fee schedule and the only appropriate way to expect payment above the fee schedule rates promulgated by the DWC for dates of service after January 1, 2004 is to negotiate a contract rate prior to services being rendered per Labor Code 5307.11 [LC 5307.11].”

Read the Holder noteworthy panel decision.

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