When a worker sustains a work-related injury, he or she is entitled to seek medical treatment for the initial injury as well as an on-going basis. Workers’ compensation is meant to cover the costs of the treatment, including equipment, therapy, surgery, prescription medication, and a number of other costs. A provider who has supplied services, products, or medicines to an injured worker in a workers’ compensation case can file a lien against the workers’ compensation benefits of the worker. This allows the provider to make sure he or she gets paid. In 2012, a bill came into effect that required lien holders to pay an “activation fee.” The purpose of this fee was an attempt to clear the large backlog of small liens that were bogging down the system, as well as discouraging providers from filing small claims by making the fee large enough as to render the lien worthless. A case called Angelotti Chiropractic v. Baker challenged the constitutionality of the activation fee. The case claimed that the activation fee was a violation of the Equal Protection clause of the United States Constitution because large institutional lien holders such as union trusts and health care plans were exempt from having to pay the activation fee. The plaintiffs alleged that this was unfair, and either all or no lien holders should have to pay the fee. The court ultimately agreed.
In November 2013, the court approved the request for a preliminary injunction, which prevented the DWC from collecting the activation fee for the liens from before 2013 as well as preventing enforcement of a provision of the new law that would have allowed for dismissal of liens by December 31, 2013 if the activation fee had not been paid.
The Ninth Circuit United States Court later determined that the activation fees were, in fact constitutional. The court dismissed the injunction put in place by the trial court. The court determined that any affected lien claimant who filed a declaration of readiness or attended a lien conference between November 9, 2015 and December 31, 2015 must pay the activation fee. It also determined that pursuant to labor code 4903.06(a)(5). After December 31, 2015, activation fees were no longer accepted by the DWC. Providers should note that the fee for filing liens was completely unaffected by this case.
If you have questions about how workers’ compensation claims are paid, you need an experienced attorney to discuss it with you. Contact us today at (714) 516-8188 for a consultation to discuss your business and how workers’ compensation will impact your business.