Interest On Medical Bills Begins 60 Days After Receipt

A recent appellate case answered the question as to when interest is due to a medical provider on a compensable work related injury.

The applicant had a pre-existing mass that was compressing his spine. The medical provider alleged that the alleged industrial injury aggravated this pre-existing condition. The medical care providers submitted numerous bills for surgeries and other treatment. The workers’ compensation insurance carrier denied liability for the surgeries and the treatment.

The applicant settled the main issues with the workers’ compensation carrier. The carrier did not resolve the liens at the time of the settlement with the applicant. Boehm & Associates submitted a lien of $280,050.54 on behalf of several providers.  Apparently a trial was held and the workers’ compensation judge ruled that the carrier was not responsible for the pre-existing condition. A Petition for Reconsideration was filed by the lien claimant. The Workers’ Compensation Appeals Board ruled that the work related injury caused the aggravation of the pre-existing condition and therefore the preexisting condition was covered under workers’ compensation.

The carrier then paid for treatment and paid interest only from the date of the appeals board decision Boehm sought payment of interest pursuant to Labor Code section 4603.2, subdivision (b).  They were seeking payment from the time of the actual billing. Another hearing was held on this issue and the workers’ compensation judge ruled 4603.2 did not apply. A petition for reconsideration was filed and the appeals board denied reconsideration.

The appellate court looked at the section 4603.2, subdivision (b), and analogized this section with the prejudgment interest in a civil action.  The carrier argued that section 5800 was applicable. This section states that interest is due from the date of the award. The appellate court intimated that the carrier was making interest on the money they had in reserves during the pendency of the litigation therefore they should not complain about having to pay interest once it was found to be liable for treatment.

The parties never cited 9792.5 of title 8 of the California Code of Regulations, but the appellate court relied on this rule. This section deals with the rule of payment 60 days after the employer accepts liability for the injury. The appellate court found that interest is due from the due date and the due date is 60 days after the employer receives the bill.

The carrier could have avoided this appellate decision by negotiating settlement with the lien claimant.

Case: Boehm & Associates V. W.C.A.B. (Moore)

Harvey Brown
3501 Jamboree Rd. Suite 602
Newport Beach, CA 92660

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