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News, data, & insights about workers' comp billing

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Late Bill Payment? Collect Penalty and Interest.

February 14, 2017 by Catherine Montgomery

billing deadline penalty and interestThe passage of Senate Bill 1175 last autumn placed a lot of emphasis on the timely filing of California workers’ comp bills. But what about timely payment? Claims administrators must also meet billing deadlines. And if they miss those deadlines, they owe providers self-executing penalty and interest.¹ Claims administrators often ignore this requirement altogether, but providers do have a recourse.

Penalty and interest rules and deadlines vary for different bill types.

Medical Treatment Bills

A claims administrator incurs 15% penalty and 10% accrued interest per annum if payment is remitted untimely for medical treatment bills and services. For nongovernment employers, payment is untimely if a provider receives payment after 45 days from the claims administrator receipt of the the bill. For government employers, payment is untimely if a provider receives payment after 60 days from the claims administrator's receipt of the bill.²  

According to the California Division of Workers’ Compensation Medical Billing and Payment Guide, the penalty and interest are to be self-executing. This means the claims administrator should automatically include the penalty and interest when sending a late payment. The provider should not have to ask for this payment.

Of course, the provider often does have to ask for the payment. The best way to do this is by filing a lien.

Per the California Code of Regulations § 10451.2, providers who are owed penalty and interest for an untimely bill payment should file a lien citing a breach of duty on the part of the claims administrator. Labor Code § 4603.2 – as well as the related Rule of the Administrative Director – prescribe this very course of action.

We also recommend filing an Audit Complaint. They’re a simple way to hold claims administrators accountable, and you can file anonymously, so reporting improper behavior poses no risk to your relationship with the claims administrator in question.

Medical-Legal Bills

Claims administrators incur a 10% penalty and 7% accrued interest per annum if they remit untimely payment for medical-legal bills.³ Payment is untimely if it is received more than 60 days after the claims administrator received the original med-legal bill. No distinction is made between government and nongovernment employers.

Per the California Code of Regulations § 10451.1, med-legal providers who are owed penalty and interest for an untimely bill payment should file a Petition for Determination with the Workers’ Compensation Appeal Board (WCAB), citing that the claims administrator in question breached a duty as defined by Labor Code § 4622(a).

Once again, we also recommend filing an Audit Complaint. We provide a free online library of suggested Audit Complaint language. A few minutes of copying and pasting could lead to the DWC intervening and correcting a claims administrator’s non-compliance. Each time you file, you improve California workers’ comp billing for the entire community.

Takeaway

If a claims administrator fails to remit timely payment, providers are entitled to penalty and interest payments. Though claims administrators are supposed to self-regulate and pay penalty and interest automatically, it’s important to keep track of any untimely payments and hold the claims administrator accountable by filing a lien or petition for determination, as well as an audit complaint. DaisyBill Billing Software clients can track accrued penalty and interest payments using the Bill History page.


¹ This is set forth in Section 7.2 of the California Division of Workers’ Compensation Medical Billing and Payment Guide.

² Full rules and regulations for medical treatment bills are available in the Medical Billing and Payment Guide and California Labor Code § 4603.2.

³ Full rules and regulations for med-legal bills are available in California Labor Code § 4622.


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DaisyBill is a trusted authority on workers’ comp billing. Thousands of work comp professionals attend our webinars and state agencies and professional organizations turn to us for our expertise. We created this blog to help everyone involved in workers’ compensation; sharing news, tips, and data of interest to the community.

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