The Insurance Journal reports that the S.B. 863 lien provisions seem to be reducing costs. EMPLOYERS Insurance, a monoline workers’ comp carrier that conducts more than 60 percent of its business in California, where it also sees more than half of its claims, is reporting that the lien fees are already easing the company’s losses. “It will save us on medical costs, and it will save us on defense costs,” said Christina Ozuna, vice president of claims for the Western Region for EMPLOYERS. Ozuna said it’s too soon to provide estimates on how much cost savings there will be, but she said they will be worth noting. “We believe we’re going to have significant cost savings,” she said.

Those savings should continue due to the January en banc decision in the case of Figueroa v. B.C. Doering Co., in which the WCAB detailed the process for lien activation and the consequences for not activating a lien prior to a lien conference set after 2013. The WCAB ruled the lien activation fee must be paid prior to the commencement of a lien conference, and if the lien claimant fails to pay, its lien must be dismissed with prejudice. In Figueroa WCAB ruled the judge was required to dismiss the case and that the failure to enter into negotiation or provide a proper notice is not excuse from paying the fee.

Operationally, carriers like EMPLOYERS will still be required to negotiate, Ozuna said, adding, “but going forward we’ll see many liens fall out of the system.” She added, “We’re seeing many, many dismissals of liens out of the system.” The dismissals are having a direct impact on EMPLOYERS by reducing the cost of defense of these liens, however some people are still poking at the loopholes in the lien filing process, she said. Instead of liens, many copy services and interpreting agencies with charges they want paid have acted to avoid the fees by instead filing petitions for costs. “Their argument is they are not medical providers and are not trying to provide claim for cost in the form of a lien,” Ozuna said. “This is their effort to sort of get outside of that.”

As far as liens go, Estelle Freeman, claims supervisor for Carl Warren and Co. in Tustin, Calif. said, while the organization has not felt the full impact of the new law, she’s noticed some changes. “I have noticed a lot more lien claimants trying to aggressively settle their liens before the case goes to a hearing to avoid paying the lien filing and/or lien activation fee,” Freeman said.

In fact, it appears that in 2012 in anticipation of the lien fees taking affect several lien filers got aggressive and made their claims as soon as possible, according to WCIRB’s Actuarial Committee. According to the committee, there was a sharp increase in lien filings in the fourth quarter of 2012 in anticipation of new lien filing and activation fees as part of SB 863. Citing Department of Workers’ Compensation data, WCIRB notes that nearly 1.2 million liens were filed in 2012 compared with less than 500,000 in 2011.

The lawmaker who originally introduced the lien filing fees before they were integrated into the workers’ comp reform bill was state Sen. Ted Lieu, D-Torrance, who had intended the bill to eliminate some of these loopholes that allow people to game the system. However, there was one thing he didn’t intend, and that was to make the fees retroactive. To fix that Lieu has authored cleanup legislation, Senate Bill 258, which clarifies that liens assigned prior to Jan. 1, 2013 can still be pursued even if the medical provider is still in business. “To do otherwise would probably be unconstitutional,” said Ray Sotero, a spokesman for Lieu.