On February 7, 2018, Steven Brow, sustained industrial injury to his left thumb while employed as a machinist by Sepragen Corporation, insured by The Hartford.

Mr. Brow’s case-in-chief was never the subject of a Stipulated Award or Compromise and Release, and the case was administratively closed by The Hartford.

Medical treatment and a surgery was provided by the United States Department of Veterans Affairs. The hearing was initiated by the V.A. for reimbursement of treatment provided for the injured employee’s left thumb injury, including for an outpatient nerve repair procedure.

The defendant partially reimbursed the V.A., the V.A. claimed additional reimbursement.

The WCJ found that an extensive body of federal or state case law, and statutory law, supports preemption of Labor Code section 5307.1 and the California Official Medical Fee Schedule (OMFS) with respect to the V.A.’s billings. And that section 5307.1 and the OMFS are preempted by federal law, and that the applicable federal billing schedules, and not the OMFS, apply to the V.A.’s billings in this case.

The Hartford petition for reconsideration of the Findings, Award and Order. Reconsideration was denied in the panel decision of Brow v. Sepragen Corporation (Feb 2022 – ADJ12210104).

Defendant contends, in substance, that there is nothing to trigger federal preemption of state law because there is no conflict between state and federal law, which both hold that a standard of reasonableness applies to the medical treatment charges incurred by the V.A.

The panel noted that “although defendant states it does not contend that the California OMFS applies to the V.A.’s billings for medical treatment, defendant nevertheless contends that the V.A.’s billings are subject to a standard of reasonableness under California state law.” ….”As such, defendant’s contention indirectly attacks part of the WCJ’s seventh Finding, wherein the WCJ found that ‘applicable federal billing schedules’ apply to the V.A.’s billings in this case.”

The WCJ stated on page five of his Opinion on Decision that federal law expressly preempts state law on the question of the extent of the V.A.’s entitlement to reasonable reimbursement. That is, there are various kinds of preemption, but here defendant erroneously relies upon conflict preemption, which is not on point given the facts of this case. (See People v. Hamilton (2018) 30 Cal.App.5th 673 [The four species of preemption include express, conflict, obstacle, and field preemption].)

The V.A. still has the burden of establishing the reasonableness of its charges in accordance with the billing applicable to V.A. cases, as well as establishing all other applicable elements justifying the payment sought.

In conclusion the panel “affirm[ed] the WCJ’s finding that the V.A.’s medical treatment charges are not governed by California state law, but rather are subject to the ‘applicable federal billing schedules.’ ”