KUNZ EXPLAINED - Lien Claims may be Resolved with Less Litigation

Ever since the WCAB’s en banc decision in Kunz v. Patterson Floor Coverings, Inc. and Golden Eagle Insurance Co. 67 Cal. Comp. Cas. 1588 on December 5, 2002 [W/D 68 Cal. Comp. Cas. 985], issues discussed in Kunz have led to numerous, sometimes conflicting, panel decisions and petitions for writ of review.

The main question in Kunz concerned how much providers of medical goods and services could recover in a workers’ compensation case when there was no relevant Official Medical Fee Schedule in effect on the date of the provision of the goods and/or services. The amount was a "reasonable amount". How was a "reasonable amount" to be determined?

Who had the burden of proof of reasonableness? Who had the burden of establishing the "amount usually accepted"? Is the "amount usually accepted" a reasonable amount in all cases? What evidence could be used to establish a reasonable amount?

Perhaps these questions have been answered, for the moment, by a recent unanimous en banc decision in Maria Tapia v. Skill Master Staffing and Liberty Mutual Insurance Company which issued September 17, 2008. 73 CCC 1338; Writ Denied 74 CCC 800.In that case, the lien claimant, SB Surgery Center, was an outpatient surgery center. The date of service was April 9, 2002. The OMFS covering outpatient surgery centers (8 CCR 9789.33) became effective July 1, 2004.

SB charged $23,529.00 for services provided April 9, 2002. Liberty Mutual paid $1,667.66, leaving $21,861.34 in dispute. The case with the injured worker was resolved by C&R approved July 10, 2006, with the lien unresolved.

Following a lien trial on October 30, 2007, an award issued November 30, 2007. The trial judge awarded a total of $4,700.00 as the reasonable fee for services provided. The lien claimant sought reconsideration.

The Board, en banc, held:

" (1) an outpatient surgery center lien claimant (or any medical lien claimant) has the burden of proving that its charges are reasonable;

(2) the outpatient surgery center lien claimant’s billing, by itself, does not establish that the claimed fee is "reasonable", therefore, even in the absence of rebuttal evidence, the lien need not be allowed in full if it is unreasonable on its face; and

(3) Any evidence relevant to reasonableness may be offered to support or rebutt the lien, therefore, evidence is not limited to the fees accepted by other outpatient surgery centers in the same geographic area for the services provided. "

In further explanation, the Board stated:

"Although Kunz states that a defendant’s rebuttal evidence may consist of what other inpatient or outpatient providers "accept" for the same or similar services (citation), this statement does not limit what rebuttal evidence may be presented. To the contrary, Kunz expressly declares that in determining the reasonableness of an outpatient surgery center fee, "the Board may take into consideration a number of factors, including but not limited to" (emphasis original) the fee usually accepted by the lien claimant and other inpatient or outpatient provider (citation). Therefore, in litigating the question of a reasonable outpatient surgery center fee, a defendant or lien claimant may present any (emphasis original) relevant evidence concerning that issue."

With this clarifying opinion, hopefully lien claims may be resolved with less litigation in the future.