ADJ11998519 · June 27, 2022

Defendant did not act in bad faith or sanctionable conduct; promptly corrected billing error and paid full amount plus penalties and interest; no pattern or intent to delay or harass found; attorney fees denied as no bad faith found.

From the decision · page 3I issued a Findings and Order dated April 8, 2022, and found, once again, that Defendant did not act in bad faith, and that no sanctions were warranted, and so no attorney's fees were awarded either per former CCR Sections 10451.l(g)(l)(A)&(B) and 10561 (now 10421) and LC Section 5813. I originally found that cost petitioner should receive some attorney fees for the work done to effectuate the settlement with Defendant of Dr. Konstat's billing in mid-2019 when the petition for non-IBR Determination was filed on 3/5/2019. This is what triggered Defendant to discover the unit error of 7 vs. 74 for the first time, as the original request for secondary bill review the year before indicated the billing was erroneously down-coded from an ML104 to an ML101. That's why when the secondary bill review was requested, the bill review results of 4/24/18 indicated that Dr. Konstat's billing was duplicative and no further monies were owed, even though this second bill review showed 74 units. It was because the secondary bill review only requested an analysis under ML104, not ML101. It was not until the March 2019 non-IBR petition was served that Defendant discovered the 7 vs. 74 unit discrepancy issue.

Defendant did not know of the billing underpayment until mid-March 2019 and promptly settled the entire bill within 30 days

Favours Defendant prevailed

Shows no bad faith or intent to delay, harass, or increase litigation costs; supports denial of attorney fees

From the decision · page 4The point is that Defendant, while it underpaid originally, did not know it had underpaid until mid-March 2019. Then it settled the entire bill with the provider a month later, well within the 60 days to make a payment, if they were to re-run the billing using the 74 unit codes instead of the 7. It was never about a billing of ML 104 versus an ML 101. Neither party knew or discovered this, including Dr. Konstat apparently, until about March 2019. In fact, in the secondary bill review request and IBR request (which was denied because it was deemed untimely and not based on the merits), the issue of 7 vs. 74 was not raised.

Defendant paid the medical-legal provider in full plus penalties and interest shortly after discovering the error

Favours Defendant prevailed

Indicates good faith and no sanctionable conduct warranting attorney fees

From the decision · page 4Another factor to consider on the lack of finding of bad faith or sanctionable conduct here was that when Defendant resolved the bill of the medical-legal provider in April 2019, it was paid in full plus penalties and interest. If Defendant intended to harass, delay, underpay, or avoid the provider in any way, they would not have voluntarily and so easily have paid it in full within 30 days, plus the requested penalties and interest, unless Defendant recognized immediately that it had made such a mistake. Most Defendants (at least in the Los Angeles area) would attempt to reduce and negotiate this bill, even in the face of such a mistake, but this Defendant did not.

Labor Code Section 5813

Labor Code Section 5813

Sanctions and attorney fees require a finding of bad faith conduct by the defendant

From the decision · page 1Section 5813(a) states, in pertinent part: The workers' compensation referee or appeals board may order a party, the party's attorney, or both, to pay any reasonable expenses, including attorney's fees and costs, incurred by another party as a result of bad-faith actions or tactics that are frivolous or solely intended to cause unnecessary delay. (Lab. Code, § 5813(a).)

former CCR Sections 10451.1(g)(1)(A)&(B) and 10561 (now 10421)

Defines bad faith actions and sanctions criteria relevant to attorney fees

From the decision · page 3I found that when Defendant resolved the Dr. Konstat bill in April 2019, it was acting in good faith. Part of former CCR Section 10451.1(g)(1) is that due to bad faith actions or tactics, or if a defendant fails to comply with timeliness

Defendant promptly corrected billing error and paid full amount plus penalties and interest within 30 days of discovery