LET'S REGULATE

It’s time for stakeholders to give serious consideration to regulating “signing services” in California workers’ comp.

That’s been my opinion for some time, and it was reinforced by reading a recent article (March 1, 2016) by Workcompcentral’s Greg Jones.

The article deals with litigation over alleged hacking into the computer of a LA area applicant workers’ comp firm. In court papers a law firm representing an insurer alleged that the applicant firm was paying for referrals through an illegal referral network.

Jones notes that the applicant attorney firm apparently used a signing service vendor to gather “declarations from injured workers, descriptions of the facts surrounding the claimed accident and injured body parts, venue authorizations and fee disclosures.”

One of the allegations in the litigation was that the signing service had an arrangement with another entity that determined and arranged the workers’ medical treatment.

My purpose here is not to delve deeply into the facts of that particular case, which may involve some of the individuals involved in a recent federal workers’ comp indictment. Jones indicates that the signing service arrangements are under scrutiny by prosecutors in both Northern and Southern California.

Rather, the point here is to suggest that signing services be regulated.

It may well be that there are some signing services which serve a legitimate role and have no cross-referral arrangements with medical providers, interpreters, equipment vendors or other workers’ comp providers.

I can see that there might be some circumstances where a busy attorney might wish to have a signing service vendor meet with a prospective client, particularly if the prospective client has moved far away, is hospitalized, or there are other extenuating circumstances.

But this would be the rare exception, not the rule.

It would not seem particularly difficult to craft a bill that would do some or all of the following:

1. Require signing services to register with the DWC and report to the DWC

2. Disclose ownership and financial interests

3. Certify under penalty of perjury that the signing service is not referring workers for treatment or provision of medical or other services and is not providing any renumeration to the attorney

4. Amend the DWC-1 , DWC-3 and 4906(g) forms to add requirement that signing service indicate whether they helped worker sign or were present at signing

5. Require disclosure of any arrangements between the signing service and any toll free telephone number, internet referral service or any other kind of lawyer referral or advertising arrangement.

While it is possible that some of these measures may be redundant insofar as cross referrals are prohibited under Labor Code sections 139.3 ,139.32 , 139.43 and/or Rule 9820 et seq., it would seem proper to regulate the signing services themselves.

The continuing saga of high profile arrests and indictments of Califonia workers’ comp providers makes it critical that the system be cleaned up to the extent possible. The peculiar nature of signing services may well be inviting abuses.

A bill could be drafted in such a way as to not prohibit the occasional use of a signing service vendor where there is a legitimate rare need for such a measure.

This should be a no brainer. Perhaps key stakeholders could come together quickly to get this done in 2016.

Stay tuned.

Julius Young