California’s workers’ compensation reforms took hold in January of 2013 with Senate Bill 863, and part of that bill included sections to reduce both lien claims and lien litigations. Lien filing fees were put in place to try and deter excessive lien filings, the Independent Bill Review was supposed to help resolve billing problems before they made it to litigation, and third parties were restricted in collecting assigned lien claims.

Recently, the California Department of Industrial Relations (DIR) and the Division of Workers’ Comp (DWC) announced that between 2011 and 2015, $600 million in liens were filed against workers’ compensation claims by criminally indicted or convicted parties. The department said there were 68 businesses who accounted for 273,000 liens during this time, totaling $2.5 billion in accounts receivable. Several of these business owners have pled guilty, and there is a push to stay the liens of providers who have been charged with fraud, either workers’ compensation fraud, billing fraud, insurance fraud of Medicare and Medi-Cal fraud.

In California, there are certain claims for the payment of services provided to the injured worker that can be filed as a lien against the employer. The filer and the defendant (typically the employer or the insurer) can settle on the amount of services provided, or take the dispute to a lien trial to have it settled by the Workers’ Compensation Appeals Board.

In a press release, the DIR says providers assign liens to people who then go file and collect on the liens, and that can easily lead to fraud. They equate it to “buying and selling injured workers’ treatments”.  Lien claimants tend to file after the primary case is settled.

The DIR hopes to improve their anti-fraud efforts, and the department is preparing a report that will be presented this fall with strategies to identify and fight fraud, along with other recommendations to improve the workers’ comp system in the state.