California: DWC Holds Hearing on Notice of Intent to Consolidate Liens for Compound Pharmaceuticals and Topical Medications

California: DWC Holds Hearing on Notice of Intent to Consolidate Liens for Compound Pharmaceuticals and Topical Medications

Presiding Judge Jorja Frank Holds Hearing on Los Angeles WCAB District Office’s Notice of Intent to Consolidate Liens for Compound Pharmaceuticals and Topical Medications

On October 6, 2010 Judge Frank, with the assistance of DWC Associate Chief Judge Mark Kahn, held a hearing at the WCAB in Los Angeles in connection with her notice of intent to consolidate liens involving compound pharmaceuticals and topical medications.

At the outset Judge Kahn made it clear that the rationale for taking this action was simply judicial economy and nothing else.  Although comments made by some of the lien claim representatives who attended the hearing suggested that they felt they were being treated like the "red-headed stepsister", Judge Frank told the audience that the plethora of liens for compound pharmaceuticals and topical medications was overwhelming the capacity of the Board to handle.  She made it clear that neither she nor the Board had any preconceived notions as to the validity of such liens.

Judge Frank and Judge Kahn were seeking input from the audience identifying common issues of law and fact that would create the basis for consolidation of such liens.  A number of suggestions were made but the obvious common issues are pricing, efficacy of treatment (reasonableness and necessity), coding and licensing.

It was also noted that the Board prefers that defendants or lien claimants be the parties to file the petitions for consolidation but that the Board would probably take action on its own motion if no such petitions were filed.  Judge Frank noted that in her informal review of the hundreds of liens received weekly there were approximately 15 different compound pharmaceutical or topical medications that are repeatedly observed in the invoices submitted by lien claimants.   The Board is looking for a way to post that information on the DWC website but no promises were made.

Mark Kahn also informed the audience that alternative dispute resolution methods would be considered.  He indicated that the Board would upon written request allow and schedule settlement conferences between individual carriers or self-insurers and lien claimants to assist in negotiations and global settlements in lieu of a defendant or lien claimant pursuing a consolidation action.

Ultimately no decision was made with respect to whether the Board would order a consolidation of these liens.  It was also made clear that there is no stay order in effect with respect to currently filed liens.  However, each individual WCALJ has authority to decide whether or how to proceed on a case-by-case basis, including ordering the lien issues off calendar pending a decision by the Board as to whether it would proceed with a consolidation.

The next meeting on this topic is scheduled for November 4, 2010 at 10:00 am at the WCAB in Los Angeles.  Judge Kahn has asked that any party wishing to file a petition for consolidation do so prior to November 1, 2010 so that they might be reviewed by him and Judge Frank prior to the next meeting.

What This Means for You

It is too early to know precisely what the effect will be of the Board's eventual action or inaction on the subject. However each defendant and lien claimant is free to take whatever action it perceives as in its best interest regardless of the ultimate decision by the Board whether to go forward with a consolidation on its own motion.

GMK believes that it is premature to file a petition for consolidation concerning such liens, skeletal or otherwise, in the next three weeks. Since the Board seems to be seeking information more than anything else at this point. GMK would recommend that defendants instead submit a Position Statement to Judge Frank and DWC Assistant Chief Mark Kahn concerning the issues that it believes should be addressed in a consolidation that might be later filed or that might be undertaken on the Board’s motion. Addressing the subject in this manner will give information to the Board that it is seeking and at the same time will avoid any party being locked into a position that has not been adequately investigated or researched.

© Copyright 2010 Goldman, Magdalin & Krikes, LLP. All rights reserved. Reprinted with permission.