The Special Adjudication Unit: a New Forum Within the Wcab for the Administration of Justice

• Publication year: 2019
• Author: Saro K. Kerkonian, Esq. Los Angeles, California

The Special Adjudication Unit: A New Forum Within the WCAB for the Administration of Justice

Saro K. Kerkonian, Esq. Los Angeles, California

With the reforms of late 2016 a new system of adjudication was added to the suite of services run through the Workers' Compensation Appeals Board (WCAB). The Special Adjudication Unit (SAU) was created as an anti-fraud measure. It was designed to address the reality that many providers in the workers' compensation system were able to continue to invoke the standard jurisdiction and process of the WCAB to collect for their billing, despite their being criminally charged or convicted related to their services in the workers' compensation system. This article provides an overview and update about that new adjudication system, which was tasked with addressing the anti-fraud initiative that the Legislature put in place.

Background

In August of 2016 the California Department of Industrial Relations (DIR) and its Division of Workers' Compensation (DWC) disclosed that there were

...$600 million in liens filed against injured employees' claims for workers' compensation benefits...by convicted or criminally indicted parties from 2011 to 2015.

DIR News Release No. 2016-79, August 19, 2016.

Emphasizing the scope of the crisis of lien claims brought by convicted medical practitioners and the burdens it imposes on California's workers' compensation system, the DIR revealed that

...68 businesses comprising the top one percent of lien filers filed more than 273,000 liens totaling 2.5 billion in accounts receivable on adjudicated cases between 2013-2015. Two of the business owners are indicted and three others have pled guilty.

DIR News Release No. 2016-79, August 19, 2016.

To remedy the situation, then-DIRDirector Christine Baker declared that the DIR and DWC "...are pursuing legislation to prohibit criminal and indicted providers from lining their pockets through liens and to address the assignment of liens." DIR News Release No. 2016-79, August 19, 2016.

New Legislation: SB 1160 and AB 1244

The result of the DIR and DWC's efforts was the passage of two bills: Senate Bill 1160, which enacted Labor Code section 4615, and Assembly Bill 1244, which created Labor Code section 139.21.

Defining the Prohibited Acts

Labor Code section 139.21(a)(1) sets forth the conduct that is prohibited and will trigger an automatic stay of the practitioner's lien claims:

The administrative director shall promptly suspend, pursuant to subdivision (b), any physician, practitioner, or provider from participating in the Workers' Compensation system as a physician, practitioner, or provider if the individual or entity meets any of the following criteria:

(A) The individual or entity has been convicted of any felony or misdemeanor and that crime comes within any of the following descriptions:

(i) It involves fraud or abuse of the federal Medicare or Medicaid programs, the Medi-Cal program, or the workers' compensation system, or fraud or abuse of any patient.
(ii) It relates to the conduct of the individual's medical practice as it pertains to patient care.
(iii) It is a financial crime that relates to the federal Medicare or Medicaid programs, the Medi-Cal program, or the workers' compensation system.
(iv) It is otherwise substantially related to the qualifications, functions, or duties of a provider of services.

(B) The individual or entity has been suspended, due to fraud or abuse, from the federal Medicare or Medicaid programs or the Medi-Cal program.
(C) The individual's license, certificate, or approval to provide health care has been surrendered or revoked.
(D)

...