BILL NUMBER: SB 863 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 14, 2011
AMENDED IN SENATE MARCH 22, 2011
INTRODUCED BY Senator Lieu
(Principal coauthor: Assembly Member Hagman)
FEBRUARY 18, 2011
An act to amend Sections 4903.1, 4903.5, 4904, and 4905 of, and to
add Section 4903.05 to, the Labor Code, relating to workers'
compensation.
LEGISLATIVE COUNSEL'S DIGEST
SB 863, as amended, Lieu. Workers' compensation: liens.
Existing law establishes a workers' compensation system,
administered by the Administrative Director of the Division of
Workers' Compensation, to compensate an employee for injuries
sustained in the course of his or her employment.
(1) Existing law prescribes certain requirements upon the filling
of a lien by a lien claimant and requires the Workers' Compensation
Appeals Board to file liens immediately upon receipt.
This bill would recast these provisions.
(2) Existing workers' compensation law authorizes the appeals
board to determine and allow specified expenses, including, but not
limited to, certain expenses incurred by a medical provider as liens
against any sum to be paid as compensation. Existing law requires,
before issuing an award or approval of any compromise of claim, the
determination of whether any benefits have been paid or services
provided by specified entities.
This bill would remove a health care provider from among
these entities. This bill would also remove the appeals
board's authority to order specified medical liens in a proceeding
before the board without a request for the lien having been made.
(3) Existing law prohibits a lien claim for reasonable expenses
incurred by or on behalf of the injured employee and medical-legal
expenses from being filed after 6 months from the date on which the
appeals board or a workers' compensation administrative law judge
issues a final decision, findings, order, including an order
approving compromise and release, or award, on the merits of the
claim, after 5 years from the date of the injury for which the
services were provided, or after one year from the date the services
were provided, whichever is later.
This bill would instead prohibit a lien claim from being filed
after 3 years from the date the services were provided, or more than
18 months after the date the services were provided if the services
were provided on or after July 1, 2012. This bill would also
authorize a health care service plan, group disability insurer,
self-insured employee welfare benefit plan, or publicly funded
program providing medical benefits on a nonindustrial basis to file a
lien claim for medical expenses within 6 months after the entity has
notice that an industrial injury is being claimed but in no event
later than 3 years from the date the services were provided to the
employee. This bill would require the appeals board to adopt
prescribed rules of practice and procedure. This bill would state
that these provisions apply to any liens that are filed with the
appeals board on or after the operative date of this act regardless
of the date services were provided, except as expressly provided.
(4) Existing law allows the Employment Development Department
(EDD) to file a lien for unemployment compensation benefits and
unemployment disability benefits.
This bill would provide that for a claim allowable as a lien in
favor of EDD, the claim is a lien against any amount thereafter
payable as temporary or permanent disability compensation. This bill
would state that this provision is declarative of existing law and
shall not constitute good cause to reopen, rescind, or amend any
final order, decision, or award of the appeals board.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 4903.05 is added to the Labor Code, to read:
4903.05. (a) Any lien claimant under Section 4903 shall file its
lien with the appeals board in writing upon a form approved by the
appeals board. The lien shall be accompanied by a full statement or
itemized voucher supporting the lien and justifying the right to
reimbursement and proof of service upon the injured worker, or if
deceased, upon the worker's dependents, the employer, the insurer,
and the respective attorneys or other agents of record.
(b) The appeals board shall file liens pursuant to Section 4903
immediately upon receipt. Numbers shall be assigned pursuant to
subdivision (c) of Section 5500.
SEC. 2. Section 4903.1 of the Labor Code is amended to read:
4903.1. The appeals board, arbitrator, or settlement conference
referee, before issuing an award or approval of any compromise of
claim, shall determine, on the basis of liens filed with it pursuant
to Section 4903.05, whether any benefits have been paid or services
provided by a health care provider, a health care service
plan, a group disability policy, including a loss of income policy, a
self-insured employee welfare benefit plan, or a hospital service
contract, and its award or approval shall provide for reimbursement
for benefits paid or services provided under these plans as follows:
(a) When the referee issues an award finding that an injury or
illness arises out of and in the course of employment, but denies the
applicant reimbursement for self-procured medical costs solely
because of lack of notice to the applicant's employer of his need for
hospital, surgical, or medical care, the appeals board shall
nevertheless award a lien against the employee's recovery, to the
extent of benefits paid or services provided, for the effects of the
industrial injury or illness, by a health care provider, a
health care service plan, a group disability policy, a self-insured
employee welfare benefit plan, or a hospital service contract.
(b) When the referee issues an award finding that an injury or
illness arises out of and in the course of employment, and makes an
award for reimbursement for self-procured medical costs, the appeals
board shall allow a lien, to the extent of benefits paid or services
provided, for the effects of the industrial injury or illness, by
a health care provider, a health care service plan, a
group disability policy, a self-insured employee welfare benefit
plan, or a hospital service contract.
(c) When the referee issues an award finding that an injury or
illness arises out of and in the course of employment and makes an
award for temporary disability indemnity, the appeals board shall
allow a lien as living expense under Section 4903, for benefits paid
by a group disability policy providing loss of time benefits. The
lien shall be allowed to the extent that benefits have been paid for
the same day or days for which temporary disability indemnity is
awarded and shall not exceed the award for temporary disability
indemnity. A lien shall not be allowed hereunder unless the group
disability policy provides for reduction, exclusion, or coordination
of loss of time benefits on account of workers' compensation
benefits.
(d) When the parties propose that the case be disposed of by way
of a compromise and release agreement, in the event the lien claimant
, other than a health care provider, does not agree to
the amount allocated to it, then the referee shall determine the
potential recovery and reduce the amount of the lien in the ratio of
the applicant's recovery to the potential recovery in full
satisfaction of its lien claim.
SEC. 3. Section 4903.5 of the Labor Code is amended to read:
4903.5. (a) A lien claim for expenses as provided in subdivision
(b) of Section 4903 shall not be filed after three years from the
date the services were provided, nor more than 18 months after the
date the services were provided if the services were provided on or
after July 1, 2012.
(b) Notwithstanding subdivision (a), any health care service plan
licensed pursuant to Section 1349 of the Health and Safety Code,
group disability insurer under a policy issued in this state pursuant
to the provisions of Section 10270.5 of the Insurance Code,
self-insured employee welfare benefit plan issued in this state as
defined in Section 10121 of the Insurance Code, or publicly funded
program providing medical benefits on a nonindustrial basis, may file
a lien claim for expenses as provided in subdivision (b) of Section
4903 within six months after the entity first has notice that an
industrial injury is being claimed, but in no event later than three
years from the date the services were provided to the employee.
(c) The injured worker shall not be liable for any underlying
obligation if a lien claim has not been filed and served within the
allowable period. Except when the lien claimant is the applicant as
provided in Section 5501 or as otherwise permitted by rules of
practice and procedure adopted by the appeals board, a lien claimant
shall not file a declaration of readiness to proceed in any case
until the case-in-chief has been resolved.
(d) This section shall not apply to civil actions brought under
the Cartwright Act (Chapter 2 (commencing with Section 16700) of Part
2 of Division 7 of the Business and Professions Code), the Unfair
Practices Act (Chapter 4 (commencing with Section 17000) of Part 2 of
Division 7 of the Business and Professions Code), or the federal
Racketeer Influenced and Corrupt Organization Act (Chapter 96
(commencing with Section 1961) of Title 18 of the United States Code)
based on concerted action with other insurers that are not parties
to the case in which the lien or claim is filed.
SEC. 4. Section 4904 of the Labor Code is amended to read:
4904. (a) If notice is given in writing to the insurer, or to the
employer if uninsured, setting forth the nature and extent of any
claim that is allowable as a lien in favor of the Employment
Development Department, the claim is a lien against any amount
thereafter payable as temporary or permanent disability compensation,
subject to the determination of the amount and approval of the lien
by the appeals board. When the Employment Development Department has
served an insurer or employer with a lien claim, the insurer or
employer shall notify the Employment Development Department, in
writing, as soon as possible, but in no event later than 15 working
days after commencing disability indemnity payments. When a lien has
been served on an insurer or an employer by the Employment
Development Department, the insurer or employer shall notify the
Employment Development Department, in writing, within 10 working days
of filing an application for adjudication, a stipulated award, or a
compromise and release with the appeals board.
(b) (1) In determining the amount of lien to be allowed for
unemployment compensation disability benefits under subdivision (f)
of Section 4903, the appeals board shall allow the lien in the amount
of benefits which it finds were paid for the same day or days of
disability for which an award of compensation for any permanent
disability indemnity resulting solely from the same injury or illness
or temporary disability indemnity, or both, is made and for which
the employer has not reimbursed the Employment Development Department
pursuant to Section 2629.1 of the Unemployment Insurance Code.
(2) In determining the amount of lien to be allowed for
unemployment compensation benefits and extended duration benefits
under subdivision (g) of Section 4903, the appeals board shall allow
the lien in the amount of benefits which it finds were paid for the
same day or days for which an award of compensation for temporary
total disability is made.
(3) In determining the amount of lien to be allowed for family
temporary disability insurance benefits under subdivision (h) of
Section 4903, the appeals board shall allow the lien in the amount of
benefits that it finds were paid for the same day or days for which
an award of compensation for temporary total disability is made and
for which the employer has not reimbursed the Employment Development
Department pursuant to Section 2629.1 of the Unemployment Insurance
Code.
(c) In the case of agreements for the compromise and release of a
disputed claim for compensation, the applicant and defendant may
propose to the appeals board, as part of the compromise and release
agreement, an amount out of the settlement to be paid to any lien
claimant claiming under subdivision (f), (g), or (h) of Section 4903.
If the lien claimant objects to the amount proposed for payment of
its lien under a compromise and release settlement or stipulation,
the appeals board shall determine the extent of the lien claimant's
entitlement to reimbursement on its lien and make and file findings
on all facts involved in the controversy over this issue in
accordance with Section 5313. The appeals board may approve a
compromise and release agreement or stipulation which proposes the
disallowance of a lien, in whole or in part, only where there is
proof of service upon the lien claimant by the defendant, not less
than 15 days prior to the appeals board action, of all medical and
rehabilitation documents and a copy of the proposed compromise and
release agreement or stipulation. The determination of the appeals
board, subject to petition for reconsideration and to the right of
judicial review, as to the amount of lien allowed under subdivision
(f), (g), or (h) of Section 4903, whether in connection with an award
of compensation or the approval of a compromise and release
agreement, shall be binding on the lien claimant, the applicant, and
the defendant, insofar as the right to benefits paid under the
Unemployment Insurance Code for which the lien was claimed. The
appeals board may order the amount of any lien claim, as determined
and allowed by it, to be paid directly to the person entitled, either
in a lump sum or in installments.
(d) Where unemployment compensation disability benefits, including
family temporary disability insurance benefits, have been paid
pursuant to the Unemployment Insurance Code while reconsideration of
an order, decision, or award is pending, or has been granted, the
appeals board shall determine and allow a final amount on the lien as
of the date the board is ready to issue its decision denying a
petition for reconsideration or affirming, rescinding, altering or
amending the original findings, order, decision, or award.
(e) The appeals board may not be prohibited from approving a
compromise and release agreement on all other issues and deferring to
subsequent proceedings the determination of a lien claimant's
entitlement to reimbursement if the defendant in any of these
proceedings agrees to pay the amount subsequently determined to be
due under the lien claim.
SEC. 5. Section 4905 of the Labor Code is amended to read:
4905. Except with regard to liens as permitted in subdivision (b)
of Section 4903, where it appears in any proceeding pending before
the appeals board that a lien should be allowed if it had been duly
requested by the party entitled thereto, the appeals board may,
without any request for such lien having been made, order the payment
of the claim to be made directly to the person entitled, in the same
manner and with the same effect as though the lien had been
regularly requested, and the award to such person shall constitute a
lien against unpaid compensation due at the time of service of the
award.
SEC. 6. The amendments to Section 4903.5 made by this act apply to
any liens that are filed with the appeals board on or after the
operative date of this act regardless of the date services were
provided except as otherwise expressly provided by that section.
SEC. 7. The amendments to Section 4904 made by this act are
declarative of existing law and shall not constitute good cause to
reopen, rescind, or amend any final order, decision, or award of the
appeals board.