California workers' comp liens: filing rules, fees and deadlines for applicant firms

A lien is a claim against the workers' comp case by someone other than the injured worker: a medical provider, an interpreter, a copy service, EDD, even the applicant's own attorney for fees. Liens are filed by the lien claimant, but they land in the applicant firm's case, they can hold up a settlement, and some reduce what the client takes home. This guide covers the rules that decide whether a lien is valid. It is general information, not legal advice.

Who can file a lien

Labor Code 4903 lists the claims the WCAB may allow as liens:

Most of the volume, and most of the disputes, are 4903(b) medical liens.

The filing fee and declarations

Under Labor Code 4903.05(d), a lien for medical treatment or medical-legal expenses, or a claim for costs, filed on or after January 1, 2013 must be accompanied by a $150 filing fee, paid electronically before filing. A lien filed without it is invalid, doesn't toll any deadline, and the fee isn't refunded if the lien is later dismissed.

Some filers are exempt by statute, including health care service plans, group disability insurers, self-insured employee welfare benefit plans, Taft-Hartley funds and publicly funded nonindustrial medical programs. Non-medical liens, such as attorney fees, living expenses, burial, support, EDD and Victims of Crime, don't carry the fee, according to the DWC's lien FAQ.

Two declarations also apply:

• Labor Code 4903.05(c): for 4903(b) liens filed on or after January 1, 2017, the lien claimant must file a declaration under penalty of perjury that the dispute isn't subject to IBR or IMR and that it fits one of the listed categories, such as treatment by an MPN physician, an AME or QME, treatment authorized under UR, or emergency care. A lien without the declaration is dismissed with prejudice by operation of law.
• Labor Code 4903.8(d): liens filed on or after January 1, 2013 need a supporting declaration from a person with knowledge that the services were actually provided and the bill is accurate.

Filing deadlines

A lien not filed in time can't be collected from the worker either (Labor Code 4903.5(c)). Liens must be filed electronically, by e-form or JET File, and the DWC takes the fee through its public information case search. Our guide to EAMS and JET filing explains both methods.

Assignments and stays

Under Labor Code 4903.8(a), lien payments generally go only to the original provider, unless it has stopped doing business and assigned all its receivables. A noncompliant assignment on a lien filed after January 1, 2017 is invalid.

Under Labor Code 4615, liens of a provider charged with specified crimes are stayed automatically until the criminal case is resolved, and interest stops accruing. The DIR posts a list of providers whose liens are stayed and a separate list of providers suspended from the system under Labor Code 139.21. Check both lists when liens arrive on a case.

How liens get resolved

Under Labor Code 4903.5(c), a lien claimant generally can't file a declaration of readiness until the injured worker's case-in-chief is resolved. The WCAB's lien rules then take over:

• 8 CCR 10862: filing and service of liens; different providers' claims can't be combined in one lien.
• 8 CCR 10873: a lien conference is set on a lien claimant's declaration of readiness, and every unresolved lien is heard there.
• 8 CCR 10875: defendants and lien claimants must attend with full settlement authority; a lien claimant who doesn't appear risks dismissal.
• 8 CCR 10888: a lien may be dismissed if no declaration of readiness is filed within 180 days after the case-in-chief is resolved, after a notice of intention and 10 days to object.

The applicant firm's part

Most liens are between the provider and the defendant. The applicant firm still has work to do:

• Track every lien filed on the case, with the lien claimant, amount, date of service and filing date.
• Check each medical lien's dates against the 18-month and 3-year limits.
• Check for the filing fee and the 4903.05(c) and 4903.8(d) declarations.
• Check the provider against the DIR stayed and suspended lists.
• Serve settlement documents on lien claimants (8 CCR 10702).
• Reconcile EDD liens against TD periods, since the same weeks may already be owed by the carrier.
• Record the attorney fee lien and any fee disclosure under Labor Code 4906.
• Tell the client which liens may affect what they receive, and why, before the settlement conference.

Reading a lien when it arrives

When a lien is served on your case, a short review catches most problems:

1. Who filed it, and under which subdivision of Labor Code 4903?
2. What are the dates of service, and was the lien filed within 18 months (or three years for services before July 1, 2013)?
3. Was the $150 fee paid, if it applies?
4. Is the 4903.05(c) declaration attached, and which category does it claim?
5. Is the 4903.8 supporting declaration attached?
6. Was the lien assigned, and if so, was the assignment filed and served?
7. Is the provider on the DIR stayed or suspended lists?
8. Did the treatment go through the medical provider network, or is there a reason it didn't?
9. Does any of it overlap with treatment the claims administrator already paid?

Note what you find on the case. Most defenses belong to the defendant, but a lien that survives to the end of the case can still slow the settlement, and some liens, such as EDD's, come out of benefits owed to the client.

How a firm can track this

A lien list on each case, with dates, amounts and status, saves the scramble before a settlement conference. In PlaintiffStack, workers' comp cases have a Liens page, and Finances records each lien, the reduction negotiated and the amount paid, and totals asserted liens across the firm. It doesn't file liens or pay lien fees in EAMS.