SB 1160: A Few Rotten Apples in Workers’ Comp

by Andrea Macon

One rotten apple always ruins the bunch, so changes are on the horizon again for the California workers’ comp system.

Senate Bill 1160 is moving forward and will be in Governor Jerry Brown’s hands for his signature very soon. When signed, California is hoping to weed out potentially fraudulent liens.

In the Department of Industrial Relations August 19, 2016 Issue Brief the state claimed that in the four-year period between 2011 and 2015, 17% of all liens filed in the state came from indicted or convicted parties. These liens represent a combined value of nearly 600 million dollars, though the brief fails to elaborate on how many of those liens are currently active with paid lien filing fees.

With this part of the data puzzle missing it’s hard to know how problematic those liens truly are.

SB 1160 also addresses those liens filed as a result of purchased AR and the difficulty in recognizing the correct payee. Multiple liens, filed on one case, for the same treatment, by multiple collectors has always been an issue, even outside of purchased AR. Electronic filing, and consistent UAN listings were significant steps towards correctly recognizing parties. However, only recently has the DWC started to crack down on authenticating UAN requests – ensuring that the addresses and contact information, as well as the authorizing signatures, were for the actual lien claimant, not the collection company.

Probably the most controversial aspect of SB 1160 is the retroactive requirement that existing liens have a declaration filed stating why they are exempt from IBR and IMR. Our understanding is that this only affects liens filed after January 1, 2013 through December 31, 2016, but that is still a significant amount of work for most lien claimants.

To limit the hardship to the good-apple lien claimants, EDEXIS will provide free filing of the required declaration into EAMS, using a batch process designed to ease recognition and submittal of lien issues. More information will be made available on our web site as we follow this new legislation.

As always, if you have any questions or need assistance in any way please call us toll-free at (866) 438-3339 and our customer support team will be happy to help.