Rudy Gallardo’s claim of industrial injury to his low back and right shoulder while employed by Southern California Edison was settled by compromise and release. Before the settlement he received two back surgeries performed at Huntington Hospital. What remained to be adjudicated was a dispute concerning the lien claim of Huntington Hospital in the amount of $43,870 pursuant to the Official Medical Fee Schedule (OMFS) in addition to the $18,050 already paid by Edison. Huntington initially billed $130,610.59 for the services it provided, but was paid $18,050.00 by Blue Cross of California on behalf of Edison. Huntington filed a workers’ compensation lien for the $112,560.59 balance it claimed was due, but it was subsequently stipulated that the total fee allowed by the OMFS is $61,920.00, and Huntington amended its claim to $43,870.00, which is the difference between the $18,050.00 paid by BCC and the $61,920.00 allowed by the OMFS.

The fee dispute was presented at a lien trial. Two contracts were received into the record. The first was a 23 page January 1, 2002 “Comprehensive Contracting Hospital Agreement” (CCHA) made between Blue Cross of California and Huntington. The second was a seven page August 1, 2006 “Workers’ Compensation Network Access Agreement” made between Edison and “BC Life and Health Insurance Company,” which is a Blue Cross of California subsidiary.

The WCJ issued her December 23, 2013 decision finding that defendant was obligated to pay the additional $43,870.00 to Huntington pursuant to the OMFS. Edison Petitioned for Reconsideration which was granted in the panel decision of Rudy Gallardo v Southern California Edison and Huntington Hospital.

Defendant contended that the WCAB lacks jurisdiction over the fee dispute and that it is not liable to Huntington for the additional amount because it earlier paid $18,050 to Huntington in accordance with the express agreement between Huntington and Blue Cross of California (BCC), which established the amount to be paid consistent with Labor Code sections 4906 and 5304.1.The WCAB panel agreed and reversed.

Labor Code Section 5304 provides as follows: “The appeals board has jurisdiction over any controversy relating to or arising out of Sections 4600 to 4605 inclusive, unless an express agreement fixing the amounts to be paid for medical, surgical or hospital treatment as such treatment is described in those sections has been made between the persons or institutions rendering such treatment and the employer or insurer.”

In prior decisions the WCAB held that the language in the Blue Cross ‘Comprehensive Contracting Hospital Agreement,’ expressly provides for Blue Cross to contract with ‘Other Payors’ to provide access to a hospital’s medical services. Such ‘Other Payors’ are noted to consist of other insurers, including workers’ compensation insurers. (See e.g., Recovery Resources, Inc. v. Workers’ Comp. Appeals. Bd (Gordon) (2009) 74 Cal. Comp. Cases 881 [writ denied]; See Ferguson v. Handee Market (2005 Cal. Wrk. Comp. P.D. Lexis 22[)]; Waters v. Los Angeles Clippers (2005 Cal. Wrk. Comp. P.D. Lexis 15.)

“The $18,050 fee paid by defendant to Huntington by way of the chain of contracts was pursuant to an “express agreement fixing the amounts to be paid” as described in section 5304, and under that section the WCAB does not have jurisdiction over the fee dispute. Huntington’s contention that BCC did not follow the terms of their contract in accordance with section 4906 does not change the fact that the WCAB is without jurisdiction because there is an express agreement fixing the amounts to be paid. A different forum must be used by Huntington to adjudicate its breach of contract claims.”