Medical-Legal Expenses

Division 4, Part 2, Chapter 2, Article 2.5 of the Labor Code deals with medical-legal expenses and compensation schedules under the workers’ compensation laws.

Section 4620 defines the term “medical-legal expense.” A contested claim exists when the employer knows or reasonably should know that the employee is claiming entitlement to any benefit arising out of a claimed industrial injury and one of the three specified conditions exists.

Costs of medical evaluations, diagnostic tests, and interpreters incidental to the production of a medical report do not constitute medical-legal expenses unless the medical report is capable of proving or disproving a disputed medical fact, the determination of which is essential to an adjudication of the employee’s claim for benefits. In determining whether a report meets the requirements of this subdivision, a judge is required to give full consideration to the substance as well as the form of the report, as required by applicable statutes and regulations.

Section 4621 explains that, in accordance with the rules of practice and procedure of the appeals board, the employee, or the dependents of a deceased employee, is to be reimbursed for his or her medical-legal expenses and reasonably, actually, and necessarily incurred, except as specified. The reasonableness of, and necessity for, incurring these expenses has to be determined with respect to the time when the expenses were actually incurred.

Costs for medical evaluations, diagnostic tests, and interpreters’ services incidental to the production of a medical report cannot be incurred earlier than the date of receipt by the employer, the employer’s insurance carrier, or, if represented, the attorney of record, of all reports and documents required by the administrative director incidental to the services.

Section 4622 requires all medical-legal expenses for which the employer is liable, upon receipt by the employer of all reports and documents required by the administrative director incident to the services, be paid to whom the funds and expenses are due, as specified.

Section 4625 provides that all bills for medical-legal evaluation or medical-legal expense are to be submitted to the employer within 12 months of the date of service in the manner prescribed by the administrative director. The administrative director adopted rules to define circumstances that constitute good cause for an exception to the 12-month period. Bills for medical-legal charges are barred unless timely submitted.

All charges for medical-legal expenses for which the employer is liable that are not in excess of those set forth in the official medical-legal fee schedule adopted must be paid promptly. If the employer contests the reasonableness of the charges it has paid, the employer may file a petition with the appeals board to obtain reimbursement of the charges from the physician that are considered to be unreasonable.

Section 4626 states that all charges for X-rays, laboratory services, and other diagnostic tests provided in connection with an industrial medical-legal evaluation are billed in accordance with the official medical fee schedule adopted by the administrative director and be itemized separately in accordance with rules promulgated by the administrative director.

Section 4627 allows the board and the administrative director to promulgate reasonable rules and regulations as may be necessary to interpret this article and compel compliance with its provisions.

Section 4628 explains that no person, other than the physician who signs the medical-legal report, except a nurse performing those functions routinely performed by a nurse, is permitted to examine the injured employee or participate in the nonclerical preparation of the report, including all of the specified activities. The report must contain specified information.

If the initial outline of a patient’s history or excerpting of prior medical records is not done by the physician, the physician is required to review the excerpts and the entire outline and make additional inquiries and examinations as are necessary and appropriate to identify and determine the relevant medical issues.

No amount may be charged in excess of the direct charges for the physician’s professional services and the reasonable costs of laboratory examinations, diagnostic studies, and other medical tests, and reasonable costs of clerical expense necessary to producing the report. Direct charges for the physician’s professional services include reasonable overhead expense. Failure to comply with the requirements of this section make the report inadmissible as evidence and eliminate any liability for payment of any medical-legal expense incurred in connection with the report.