Fighting Back Non-Industrial Lien Claims

By
Nicholas O. Webber

An employee receives extensive private (non-industrial) treatment before he or she elects to pursue a workers’ compensation claim in more than a few instances. A prime example is the carpal tunnel patient who treats with her family practitioner before she discovers that her condition may be industrial. In this case, the employee accumulates large medical costs that can become the burden of the employer if and when the employee pursues a workers’ compensation claim. Fortunately, the California Labor Code, starting in 2002, provides employers a little known, little discussed statute of limitation, which may shield the employer from liability in these instances.

California Labor Code Section 4903.5 (b) essentially states that providers of non-industrial treatment have 6 months from the date on which health care providers, health care service plans, group disability insurer or other entity possesses knowledge that an industrial injury is being claimed, to file their lien. Failure to file a lien in the 6 month time period may time bar the provider in question from pursuing a lien.

This sub-section may potentially help defendants avoid a lion share of the liens they may face in cases like the one mentioned above. The problem, however, becomes: how does a defendant prove "date of knowledge" on the part of the providers from which the 6 month time period is to toll? The problem becomes tricky in that serving written notice of a claim to a provider may not only establish a date of knowledge; it may very well trigger a filing of the unwanted lien claim within the 6 month time period.

A skilled attorney, through the use of discovery such as subpoenas, depositions and/or written discovery demands may be able to prove up “date of knowledge” on the part of provider, without “tipping the hat,” so-to-speak. In cases where non-industrial treatment is rendered, a defense attorney should specifically question the employee, through deposition, as to the nature and extent of non-industrial treatment rendered, as well as what notice the employee may have given the provider as to the status of a workers’ compensation claim.

Use of the subpoena tool may also prove invaluable. A thorough review of medical records relating to the non-industrial treatment may demonstrate awareness on a part of the provider, or the employee’s private insurance, that a workers’ compensation claim is implicated.

If it becomes clear, through the course of discovery, that a non-industrial medical provider had knowledge of a workers’ compensation claim, and 6 months has elapsed since their initial date of knowledge, Labor Code section 4903.5 (b) serves to time bar their future lien claims.

A necessary caveat is that Labor Code section 4903.5 (b) is largely an untested sub-section of the labor code. Very little, if any, case law defines “date of knowledge”, or what’s more, the evidence which would be required to prove up date of knowledge. That said, section 4903.5 (b) is a powerful tool in the hands of the defense. One that can markdown the value of many an expensive lien during negotiations at MSC, or, perhaps, defeat the lien all together at trial.