California Workers’ Compensation Reform SB 863 Analysis: Fee Schedule Provisions

***WARNING: The following analysis is based on the 8/24/2012 version of SB 863. On 8/31/2012, the Legislature passed SB 863. Be sure to check the final version of SB 863 posted on the Legislature website.***

The proposed amendments in SB 863 to Labor Code Sections 5307.7, 5307.8, and 5307.9 set forth the creation of new fee schedules applicable to several different and usually hotly litigated costs. The proposed amendments to Labor Code Section 5307.8 authorize the Administrative Director to adopt a fee schedule for home health services by July 1, 2013. The proposed amendments to Labor Code Section 5307.9 authorize the Administrative Director to adopt a fee schedule for copy services by December 31, 2013. The proposed amendments to Labor Code Section 5307.7 and Labor Code Sections 4600(g) and 5811 pertain to fee schedules for vocational services and interpreters, respectively.

As mentioned above, each of these “system costs” have been the subject of a great deal of litigation. Over the past many years, the issue of home health care has been the subject of significant controversy. Many different issues arise when dealing with the proper reimbursement for these costs. Oftentimes, these services are being provided by a family member or spouse. The question arises at what rate to compensate a husband or wife for providing these services? Another issue that arises is determining the actual date upon which these services become reimbursable. Many times, the injured worker may not get an actual prescription from a physician for these services and then may seek reimbursement going back many years. The proposed legislation specifically addresses these issues.

The fee schedule to be adopted by the Administrative Director will presumably address the rates at which these services are reimbursable. Likewise, the proposed Labor Code Section 4600(h) amendment specifically provides that the employer shall not be liable for services that are provided more than 14 days prior to the employer’s receipt of the physician’s prescription.

Thus, the proposed fee schedule, once adopted, in addition to the related provisions being suggested will do a great deal to clarify and likely reduce the ongoing litigation over home health care.

Like home health care, the hotly contested issue of appropriate copying costs is addressed by the new fee schedules. Particularly over the last few years, there have been an increasing number of liens filed by copying service companies to obtain payment for their services. It is not uncommon to have a lien filed in a case involving copying costs that exceed several thousands of dollars. Again like home health care, the Administrative Director’s adoption of a fee schedule in this regard should significantly reduce if not eliminate litigation over these costs.

Finally, the proposed amendments would include a fee schedule applicable to vocational services. Even prior to SB899, the rate at which vocational rehabilitation experts should be properly reimbursed has been an unsettled issue. Some experts would charge $100 an hour for their services and others perhaps $500 per hour. Some might charge for their travel time, and others would not. The costs of one vocational expert’s testimony in a case might be $750 where another expert’s testimony in the same case might cost $5,000.

Another issue involving vocational expert testimony has been how the WCAB should receive this evidence. Oftentimes, these experts testify at trial. Their testimony will cover numerous issues and will typically use substantial court time. The proposed Labor Code Section 5703(j) provides that if vocational expert evidence is otherwise admissible, it shall be produced in the form of written reports. This section provides that direct examination of these witnesses shall not be received at trial except upon a showing of good cause.

Hence, like home health care and copying costs, the new legislation will not only address the proper rates at which these vocational services will be paid, but will also significantly limit how much time may be needed in connection with these services.

In conclusion, while the Administrative Director has not yet promulgated the different fee schedules, it is reasonable to anticipate that these schedules, along with the related provisions contained in the proposed amendments, will significantly reduce future litigation.

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LexisNexis Series on California Workers' Comp Reform SB 863:

***WARNING: The following analyses are based on the 8/24/2012 and/or 8/27/2012 version of SB 863. On 8/31/2012, the Legislature passed SB 863. Be sure to check the final version of SB 863 posted on the Legislature website.***