DIR Stays 200,000 Liens Valued at $1 Billion, Posts Suspended Provider List

Last year, state lawmakers enacted two bills, SB 1160 (Mendoza) and AB 1244 (Gray), designed to crack down on workers’ compensation medical fraud. Both bills took effect this month.  

SB 1160 lien provisions include:

• DIR must automatically stay liens owned by providers who have been indicted or charged with crimes until the disposition of criminal proceedings;
• Lien claimants must submit a declaration under penalty of perjury stating that they are eligible to file a lien. Failure to file a declaration is grounds for lien dismissal;
• Liens filed after 1/1/17 must specify the basis upon which the lien is authorized and, effective 7/1/17, that same standard will be applied to all existing liens; and
• New restrictions have been adopted to limit the assignment of liens to third parties.

AB 1244 (Gray) requires that:

• The AD suspend workers’ comp medical providers who are convicted of any fraud or abuse of Medicare, Medi-Cal, or workers’ comp, or who have been suspended from Medicare or Medi-Cal due to fraud or abuse;
• The DWC promptly update its QME and MPN lists to reflect those suspensions;
• The Division conduct special lien proceedings in which all of a suspended provider’s liens are to be consolidated for a single hearing at a WCAB office, at which there will be a rebuttable presumption that the provider’s liens are based on fraudulent conduct; and
• No attorney fee be payable prior to the filing of a disclosure form signed by the applicant attorney under penalty of perjury that notes the WCAB district office selected. Note: the new attorney fee disclosure form is here.

To meet the statutory deadline for implementation, shortly after the governor signed these measures in September, DWC developed emergency regulations detailing the provider suspension process (CCR §§9788.1–9788.4, click here). On December 21, 2016, the Division submitted those regs to the Office of Administrative Law (OAL) for approval. On January 6, 2017, OAL approved the emergency regs and filed them with the Secretary of State, at which point they took effect.

Last week, the DWC posted a news release to announce that it has begun issuing notices of suspension to convicted providers and that it has now placed stays on more than 200,000 liens worth more than $1 billion associated with 75 medical providers who have been charged with workers’ comp fraud. To access the list of suspended providers go to www.dir.ca.gov/fraud_prevention/, scroll down to the section “How does DIR combat workers’ compensation fraud?” and click the button labeled “View list of indicted medical providers.”  That list currently contains the names of the 75 suspended providers, but DWC plans to update it regularly so claims administrators should continue to monitor it closely.

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