California Second Appellate District Issues Published Opinion That Provides Some Standards for Calculation of Home Healthcare Lien Claims by Family Members

California Second Appellate District Issues Published Opinion That Provides Some Standards for Calculation of Home Healthcare Lien Claims by Family Members

On January 26, 2011 the California Second Appellate District issued an opinion setting forth important factors to be considered for reimbursement of family members who claim a lien for "medical treatment" under Labor Code §4600 for providing home healthcare assistance to disabled family members.  The decision was certified for publication with the exception of a small portion of the opinion dealing with procedural issues.

Labor Code §4600 provides that the employer is obliged to provide all medical treatment reasonably required to cure or relieve from the effects of the industrial injury. Subsection (a) of Labor Code §4600 further provides that in the case of neglect or refusal reasonably to do so, the employer is liable for the reasonable expense incurred by or on behalf of the employee in providing treatment.

In State Farm Insurance v. WCAB (Civil B221431 (2011)) (Apparicio) applicant Francisca Apparicio had previously been awarded 100% permanent disability as the result of industrial injuries.  Her husband, Carl Pearson, was involved in providing attendant home healthcare.  Mr. Pearson filed a lien requesting reimbursement for providing “medical treatment" to his wife in the form of attendant home healthcare.  Defendant disputed the lien and the matter went to trial.  The WCJ requested further development of the record and appointed a physician to evaluate the home health care needs of the applicant.

Contrary to the requirements of Alvarez v. WCAB (2010), regarding ex parte communications, Mr. Pearson contacted the appointed evaluating physician ex parte and provided additional documentation and medical reports in support of his lien claim, without providing notice to the defendant.  The evaluating physician was later deposed and offered the opinion that the applicant should be monitored and assisted 24 hours a day.  Defendant objected to the report on the grounds that the applicant was not receiving assistance in the form of "medical treatment" during the entire 24 hours; in fact the evidence supported the contention that the applicant was receiving assistance in the form of medical treatment only 2.75 hours per day.

During further proceedings the WCJ awarded the lien claimant/husband approximately $1.5 million as reimbursement for 24-hour home healthcare between 2003 and 2009 at the rate of $30.00 per hour, based on an upper range of evidence regarding LVN rates.

Defendant appealed, and the WCAB denied reconsideration.  Defendant then sought a writ.

The Second Appellate District concluded that the rate of $30.00 per hour seven days per week was not justified and was an act in excess of the powers of the Appeals Board.  Moreover, the calculation of $30.00 per hour at an LVN rate was not reasonable.  The matter was remanded to the WCAB to identify which caregiver services being provided by the applicant's husband were "medical treatment" within the meaning of Labor Code §4600.

Finally, because of the ex parte communication with the evaluating physician appointed by the WCAB, the appellate court affirmed the Alvarez standard that ex parte communication with an evaluating physician is strictly prohibited, ordered the report be stricken and that a new physician be appointed in order to evaluate the appropriate caregiver needs of the applicant.

What this means for you

Lien claims by family members for providing attendant care are becoming increasingly common.  The appellate court in this case provides useful guidance in dealing with these liens.

First, the time spent by the caregiver must be broken down into activities which can reasonably be considered medical treatment, from those which are incidental to maintenance of the household.

Second, a family member as a caregiver is not entitled to receive reimbursement of their lien claim at LVN rates, although the specific rate of reimbursement is an open issue.

Finally, identification of the need for home healthcare requires expert medical opinion.  The expert must be given all relevant documentation and care must be taken that all parties heed the rule in Alvarez and do not engage in any ex parte communication with the physician evaluating the issue.

These lien claims are typically prosecuted by applicant attorneys with or without a waiver of conflict between the applicant and the family member caregiver.  Applicant attorneys have a potential for earning a substantial contingent fee on representing the lien claimant family member for retroactive care which they have provided to their disabled clients.  This provides little incentive not to litigate the issue as the facts in this case demonstrate.

Goldman Magdalin & Krikes is prepared to take the lead in home healthcare issues, and welcomes the opportunity to develop the record and work on your behalf to reduce and defeat these lien claims wherever possible.

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