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California: Competency of the Labor Code Section 4903.8(D) Declarant

January 23, 2020 (6 min read)

Over six years ago, the legislature enacted Labor Code section 4903.8 in furtherance of its goal to curb the proliferation of medical treatment liens in workers’ compensation matters. Subsection (d) of the statute requires medical treatment liens to be filed with supportive documentation including one or more declarations under penalty of perjury by a person competent to testify that the services or products described in the billing statement were actually provided to the injured employee, and that the billing statement truly and accurately describes the services or products that were provided to the injured employee. However, the statute does not define or describe what is meant by the phrase, “a person competent to testify.” In the years since section 4903.8 (d) was enacted, a number of Appeals Board panel decisions have considered whether a 4903.8(d) declaration is compliant with the statute. Those decisions have discussed such aspects of the declaration as the competency of the declarant, but while instructive, none have provided definitive guidance on this important requirement. Well, that has changed. The recent panel decision, Luisa Isabel Rodriguez v. Kelly Services (October 28, 2019) 219 Cal. Wrk. Comp. P.D. LEXIS ___, answers that important question. (See PDF at end of this blog post.)

Luisa Isabel Rodriguez (applicant) sustained an industrial injury to her back for which she received medical treatment. Comprehensive Outpatient Surgery Center (COSC) and Technical Surgery Support (TSS) filed liens for medical treatment provided to applicant in conjunction with her industrial injury. Their liens included the declaration of a Mr. Christoff, who declared under penalty of perjury, that the services or products described in the billing statements were actually provided to applicant and that the billing statements truly and accurately describe the services or products that were provided to her. Defendant disputed he validity of Mr. Christoff’s declaration per section 4903.8(d), and a trial was held.

At trial the sole issue was the validity of the 4903.8(d) declarations submitted by Mr. Christoff on behalf of COSC and TSS. Mr. Christoff testified that he has worked as an attorney for COSC for approximately 15 years and he collects liens on behalf of COSC and TSS. His job duties include understanding billing procedures and codes, reviewing and negotiating bills, and reviewing surgical and medical reports. He estimated having reviewed over 10,000 operative reports in order to gain an understanding of what was billed for each particular type of service. In addition, he spoke to pain management doctors to get a better understanding of the medical services provided and billed so that he could negotiate the billing. Mr. Christoff received education on decompression procedures and training on bill review practices. As regards applicant, Mr. Christoff testified that COSC performed multiple decompression and facet blocks done at multiple levels in her back, which are detailed in the medical report of Dr. Williams. Mr. Christoff explained COSC’s invoice and discussed the meaning of each of the CPT codes in the invoice. He further testified that he 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. Prior to signing the section 4903.8(d) declaration, Mr. Christoff reviewed the medical and surgical reports pertaining to applicant’s treatment by COSC to ensure their accuracy. He did the same with regard to TSS.

Mr. Christoff admitted that he was not in the operating room during any of the procedures performed on applicant and that he had no formal training with regard to CPT coding. He based his declaration on Dr. Williams’ chart notes and reports, which were signed under penalty of perjury that the services described were provided to applicant on the stated date.

Defendant contended that Mr. Christoff’s declarations are invalid because Mr. Christoff lacks competency to attest to the statements made in the declarations. Specifically, defendant, points out that Mr. Christoff does not recall being in the operating room when the procedures were performed or actually talking with Dr. Williams about the procedures that were performed. His knowledge of the matter is based on his review of medical reports, chart notes and billing statements and, therefore, Mr. Christoff lacks personal knowledge about whether the procedures were actually 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. Because the statute does not define what it means to be “competent to testify,” the panel looked to Evidence code section 702 for guidance. That section provides, in relevant part, “…[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 section 4903.8(d) declarant must 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 actually provided.

Of significance, the panel held that Mr. Christoff’s competence to testify does not hinge on his actual presence in the operating room during applicant’s procedures. Nor is his competence impaired by reliance on Dr. Williams’ medical and operative reports, which are hearsay. As the panel decision points out, hearsay evidence is admissible in proceedings before the WCAB, and it is up to the WCAB to determine the weight to be given to hearsay evidence (Lab. Code, Sec. 5708; Sada v. Industrial Acci. Com. (1938) 11 Cal. 2d. 263 [1938 Cal. LEXIS 2906].) Referencing Pacific Employer’s Ins. Co. v. Industrial Acci. Com. (1941) 47 Cal. App. 2d 494, 500 [1947 Cal. App. LEXIS 1196], the panel acknowledges that any hearsay evidence must be evidence of substantial character from which the WCAB may assume a reasonable inference. In this case, the panel concludes that the medical reports Mr. Christoff relied on, although hearsay, are evidence of a substantial character from which it can be deduced that Dr. Williams performed the medical procedures described in those reports. The reports were declared to be true and correct by Dr. Williams under penalty of perjury.

Additionally, the panel found that Mr. Christoff’s testimony as to his familiarity with the billing procedures and CPT codes used by COSC and TSS, his years of experience negotiating and collecting liens on behalf of COSC and TSS, and his review of thousands of operative and medical reports demonstrated a firm understanding of the medical procedures that were performed in this case. All of these factors taken together make Mr. Christoff a competent section 4903.8(d) declarant in this matter.

The conclusions reached by the panel in this case will, no doubt, become the standard by which judges and litigants evaluate the competency of a section 4903.8(d) declarant. The 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. Such factors as the declarant’s training, work history, and extensive knowledge of the medical provider’s billing and coding practices can be presented through the declarant’s testimony. When taken together, such evidence can demonstrate the competency of the declarant.

Practitioners should check the subsequent history of any cases before citing to them.

Any information or opinions contained in this commentary are not necessarily endorsed by LexisNexis® or its affiliates.

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