How To Keep Copy Services In The System

INTRODUCTION

Attorney Copy Services, and especially “applicant” side services that are regulated under the DWC’s new Fee Schedule, are worried they won’t survive long because of the escalating use of Release Of Information (ROI) companies by California medical providers, and the excessive fees these companies often charge.

An ROI company is a form of copy service that is hired by the Custodian at a record location to help the location respond to a subpoena that was served by an attorney’s copy service. Many medical providers appreciate using an ROI company because they only have to deal with ONE copy shop in their office. I’ll provide more details about what an ROI company does in a minute, but the problem for applicant-side copy services is they are now responsible under the DWC’s Fee Schedule for providing records for a FLAT fee of $180 INCLUDING all witness fees and ROI fees. This element of the new Fee Schedule creates a risk to the applicant copy service of losing much of the profit on a given transaction – or even getting “upside down” on that transaction – because medical providers across the state are increasingly hiring Release Of Information (ROI) companies to manage all their copying in-house, and forcing the attorney copy services to pay excessive fees. 

Applicant attorneys should be paying attention to this situation, unless they are satisfied with having only one or two choices when it comes time to order records. The biggest copy services have the people and money to fight the excessive fees being charged by unscrupulous ROI companies, or force a compromise deal with them on their fees. The big applicant copy services with deep pockets view this situation as a competitive advantage that will drive most of their competition right out of the industry. The smaller copy shops will need some support and patience from their applicant attorney customers while they work through this situation.

The reality is that copy services are NOT at the mercy of the ROI companies, as many of them believe, and they should not feel so threatened and scared about this situation. This blog post is meant to help everybody in the system understand what an ROI company is, why they are used, how their fees are governed, but MOST IMPORTANT, how to keep them on the right side of things. If a copy service cannot get the ROI company to agree on reasonable fees for their services, then the copy service – and the APPLICANT ATTORNEYS THEY WORK FOR – should simply force the ROI companies out of the process. It really isn’t that difficult or costly to execute. In fact, I will explain below how this could become a profitable “cottage industry” (at the medical-provider’s expense) for attorneys that want to help

ROI PHOTOCOPIER DEFINED

ROI: The term “Release Of Information” (ROI) comes from a company that helps medical and other businesses manage the process of releasing their RECORDS to a requesting attorney or other case party. An ROI company historically appears on the scene after a Subpoena or Authorization has been served on a medical facility, and the attorney has requested that the records custodian make their own copies and mail them to the requestor or the clerk of the court. In such a situation, many record custodians across the nation hire an ROI Photocopier to review all the records, pull out any records that don’t belong in that file (mis-files), and makes copies of ONLY the records that MATCH the request language in the Subpoena (or authorization). Nothing more and nothing less. This is a big help to the witness (records custodian) who is the subject of the subpoena. The ROI Photocopier is a professional ¹ at responding to requests for information, whereas the actual Records Custodian is merely an expert at managing their own business records. When an ROI company is employed by the witness, the attorney who served the subpoena (or authorization) may not even be aware that an ROI company was involved in the process.  The ROI company represents the records custodian responding to the Subpoena or authorization.

ATTORNEY COPY SERVICE (ACS) DEFINED

What was just described above as the ROI process is an entirely different process from what most work comp attorneys and claims adjusters think of when they hire a “copy service” to gather records. Normally, a work comp attorney or claims adjuster will hire a copy company and instruct them to copy records at various locations, and that copy service handles the entire process of gathering those records. This process includes: typing up the subpoenas, serving the typed-up paperwork on all case parties, personally serving the request paperwork on the witness records custodian, paying the witness fees to the custodian, following up with the custodian to get the records released for copying, driving on-site to the record custodian’s place of business with portable scanning equipment and scanning the records, and finally printing and distributing the copies to the ordering party and any other party who requested a copy.

DIFFERENCES BETWEEN AN ROI PHOTOCOPIER AND AN ATTORNEY COPY SERVICE

The difference between an ROI Photocopier and an Attorney Copy Service is the ROI Photocopier represents the Records Custodian at the location with original records…. whereas the Attorney Copy Service represents the attorney or claims adjuster that is making the request for copies of the Custodian’s business records.

Regulation of ROI: An ROI Photocopier is regulated under Business & Professions Code Section 22450 et. seq. and Evidence Code Section 1560(b), (c) and (d) when a subpoena has been served.

Regulation of ACS: An Attorney Copy Service is excluded from B&P Code 22450 et. seq.  ², and the Attorney Copy Service is specifically incorporated into Evidence Code Section 1560(e) when they serve a subpoena and DIRECT the Custodian to make the original records available for copying.

The distinction should be clear by now: ROI Photocopiers represent witnesses, whereas Attorney Copy Services represent attorneys and claims adjusters.

HOW THE FEES ARE REGULATED: ROI PHOTOCOPIER vs ATTORNEY COPY SERVICE

ROI: The fees that may be charged by a witness (records custodian) and their hired ROI company are clearly regulated under Evidence Code 1563(b), which is basically 10-cents per page for each copy, plus $24 per hour for the time spent making the copies. The hourly rate has to be rounded to the nearest quarter-hour. There is also a provision for passing through third party retrieval fees if the records have been archived to an off-site storage facility. ³

Attorney Copy Service: As we have detailed above, an attorney copy service (ACS) does not represent the witness as an ROI company, and is NOT subject to the fees and limitations of EC 1563(b). The Attorney Copy Service is the Deposition Officer who has been hired by the attorney as described in CCP Section 2020.420, CCP 2020.430(c)(1) and Evidence Code 1560(e). ⁴

The DWC’s Fee Schedule: There is no defined fee schedule in the Evidence Code or Code of Civil Procedure for an attorney copy service (ACS). In workers compensation, the regulated fees of an Attorney Copy Service that has been hired by the Injured Worker’s attorney is found in California Code of Regulations Section 9983, which went into effect in July of 2015. When records are copied, the only charges allowed under this fee schedule are $180 for the first copy, plus 10-cents per page for each copy over 500.  Period. The ACS cannot pass on the fees charged to them for ROI services, as they routinely did before the fee schedule. See CCR 9983(e).

HOW ROI FEES CAN EASILY OVERCOME THE DWC’S FLAT-RATE FEE SCHEDULE

The Fee Schedule for witnesses and their hired ROI companies in EC 1563 are based mostly on an HOURLY RATE of $24/hour, and have NO CAP. The problem is there are also no limits on what the Custodian or ROI can charge as far as the claimed hours spent collecting the records and copying them. There is very little that can be done to stop an ROI company from claiming several hours of time necessary to prepare the records, and presenting an invoice of $200+ for xxx pages of records that were copied. I’ve also heard rumors of kick-backs the ROI companies pay to the medical providers.

On the other hand, an applicant attorney copy service is capped at $180 by CCR 9983(a) for anything less than 500 pages produced ⁵. This cap includes the witness fees, paid ROI fees, typing up the subpoena paperwork, serving copies of the paperwork on the parties, personally serving the subpoena paperwork on the witness custodian, following up to get the records released, processing the records to their customer’s preferences, and shipping the records to the customer.

The bottom line here is that the DWC’s Fee Schedule puts pressure on applicant copy services to either keep ROI companies out of the process, or control their fees. More on that below…

ROI COMPANIES ARE PROLIFERATING

Up to about the year 2012, the big ROI companies mostly avoided California because the fees allowed by Evidence Code 1563 are too limited. The profit margins these companies enjoy in other states simply haven’t been available in California. Thus, the Attorney Copy Service (ACS) companies have historically been the way records are procured in California, and particularly in workers compensation.

That started changing in 2012 and 2013 when the big national ROI companies lead by Healthport targeted California and tried to get the fees allowable under Evidence Code 1563 dramatically increased, legislatively. This was known as the SB 588 – Emerson Bill, and the sponsors spent two years trying unsuccessfully to get the bill passed before it (temporarily) faded. Upon sponsoring the bill, these same ROI companies immediately started marketing California medical providers aggressively, trying to build market share in anticipation of the bill passing.

EXCESSIVE ROI FEES – THE ROOT OF THIS DISPUTE

The only way an ROI company can profitably operate in California is to either over-state the hours spent preparing the records, or charge a trumped-up “third party off-site storage fee.” Simply following the mandated ROI fees as provided in EC 1563(b) would net less than $25 per transaction on the average file. The sweet spot for a national ROI company, as found by the CHSWC/BRG copy service study, is around $100 per transaction. That might seem pretty fair considering the DWC’s fee schedule for applicant copy services provides $180 per transaction, but remember an ROI company doesn’t provide anywhere near the level of service, or carry the financial risk, that an applicant Attorney Copy Service has to manage… an ROI company types up no subpoena, has no mailing costs related to serving parties, doesn’t have to drive to the location and personally serve the subpoena, doesn’t have to pay the witness fees, doesn’t have to follow up to enforce compliance by the witness, and certainly doesn’t have to participate in the medical-legal and lien systems to enforce payment of their fees.

The point here is that ROI companies have proliferated in California from historic levels and are still accelerating in anticipation of some sort of legislative increase in the allowable fees under Evidence Code 1563. Until those fees are changed legislatively the ROI companies usually “fudge” either the time spent or the off-site fee, the result being skyrocketing ROI fees and ROI companies that are REFUSING to allow Attorney Copy Services to perform their historical role of on-site copying of original records at Custodian locations as provided under Evidence Code 1560(e).

AVERAGE ROI FEES ARE LIKELY HIGHER THAN THE DWC EXPECTED

One copy service CEO was quoted in the DWC’s Public Comments for the 2015 fee schedule as saying the “overall average” ROI fees his company experienced only amounted to $6 ⁶. The theory he was apparently expressing was that while ROI fees may be excessive on SOME transactions, the fees don’t appear on a very large percentage of his total transactions, which brings the net affect of ROI costs for his company down to only $6 per transaction. I don’t know how he came up with such a low figure, but the bigger concern is the acceleration of the use of ROI companies and their penchant for charging fees in excess of the fee schedule in EC 1563. The information the DWC really needed in development of their fee schedule wasn’t so much the average HISTORICAL cost of ROI, but the projected average ROI cost per transaction given the proliferation in ROI involvement happening at the time. I bet if that same CEO would have reviewed a graph of all ROI costs (total witness and ROI fees) on his transactions from say 2010, it would would have told a different story.

If allowed to continue un-checked, the result of this ROI proliferation in both cost and volume will be that many applicant copy services likely will not survive under the DWC’s fee schedule. The GOOD NEWS (yes, I have some good news for a change) is that Attorney Copy Services have ample power in the law to keep the ROI companies from infringing on their territory, and gouging them on their fees.

DIRECTING THE CUSTODIAN TO SEND COPIES (ROI) VERSUS RELEASING RECORDS TO A REPRESENTATIVE OF THE ATTORNEY FOR COPYING (ACS)

Attorneys and other case parties that want records produced as discovery or to trial have three options under the scheme provided in the California Code Of Civil Procedure and California Evidence Code:

1. Request that the Custodian of Records copy their own business records and deliver the copies to the attorney or the court on a given date and time. See Evidence Code Section 1560(b). This will likely attract an ROI company.
2. Appear at a date and time for a deposition and bring the original records with them… whereby those originals are usually copied by the deposition officer. See Evidence Code Section 1560(c).
3. Request that the Custodian of Records make the original business records available for copying at their place of business by the attorney’s REPRESENTATIVE. See Evidence Code Section 1560(e). This is where the Attorney Copy Service should control all the copying.

With numbers 1 and 2 above, the Custodian is asked to copy the records themselves and deliver or appear with said records to some address. This is typically where an ROI company would be employed by the Records Custodian. The ROI company will help the Custodian manage the process of identifying the documents to be produced, making the copies, and deliver them to the right address. Nobody should have a problem with an ROI company filling this role.

In number 3 above, the deposition notice and subpoena must be carefully crafted to avoid ROI intervention and additional fees, and allow enforcement of the copying by the serving Copy Service on-site.  Below, I’ve detailed my position on how to “thread the needle” of avoiding ROI fees altogether, and how to ENFORCE that process at the medical provider’s expense.

THE SOLUTION – FLOWCHART OF FORMS AND PROCEDURES TO PRECLUDE ROI INVOLVEMENT

See the detailed FLOWCHART (click here) which outlines the AUTHORITY, FORMS, and NOTICES that should be considered by an Attorney Copy Service when setting up the number 3 situation above. If the ACS intends to ENFORCE the release of records for copying on-site for only $15 it’s CRITICAL that they prepare and serve the paperwork PERFECTLY according to these procedures. The matter will be going before a Superior Court Judge, so everything has to be done right.

CLICK HERE for a sample Subpoena Duces Tecum form with the NOTICES that need to be typed on the face. Make SURE any Cover Letter served on the witness Custodian (if one is used) does NOT say or indicate that records can be MAILED in response to the Subpoena. All documentation must instruct/direct the Custodian to make the original records available at their place of business for copying before the deposition date, as described in Evidence Code 1560(e).

Below is an SUMMARY of what the flowchart above provides, but please review the flowchart and understand all the details and authority for this process:

SUMMARY

(1) When an attorney wants to use his/her chosen Attorney Copy Service to subpoena records from a Records Custodian that is NOT a party to the case (this process won’t work for employers or carriers), they must cause a subpoena to be served that specifically DIRECTS the Custodian to make the records available to the attorney’s representative (the copy service) under CCP 2020.430(c)(1) and EC 1560(e).  This must be written in bold-face type on the face of the subpoena and pointed out to the records custodian upon service.

(2) If the custodian or an ROI company responds to the subpoena and demands fees for making the copies, this is a direct violation of the direction contained in the subpoena, so the attorney and/or Attorney Copy Service should respond in writing and remind both the custodian and ROI company that no copying may be performed by any copy service OTHER THAN the Attorney Copy Service that served the subpoena… and demand a date the ACS can go on-site and copy the original records for the maximum fee directed by EC 1563(e) of $15.

(3) If the Custodian refuses to allow the ACS to copy, wait for the deposition date on the face of the subpoena to pass, then have an attorney file a petition with the Superior Court in the county of the local appeals board responsible for the underlying case to have the Custodian held in CONTEMPT for refusal to obey the subpoena. See Labor Code 132 for the procedure in workers compensation for doing this. The Custodian will be liable for the COSTS of this action and the ATTORNEY FEES to enforce the subpoena as provided by CCP 2020.240, CCP 2023.010(d), and CCP 1992.  Be sure to include in your Petition the requirements of CCP 2023.040.

FINDING AN ATTORNEY TO ENFORCE THE SUBPOENA AGAINST THE CUSTODIAN

Labor Code 132 allows a petition for enforcement of a subpoena to be filed EITHER with the appeals board OR Superior Court. Since this would likely be a rare occurrence, there will be few (if any) applicant attorneys OR Judges that will have experience with this type of action. Even if the Judge DOES have the experience and inclination to be involved, the enforcement STILL happens in Superior Court, so you might as well start there. I suggest the attorney or copy service look for a competent local civil attorney that will accept the challenge on the basis that he collect his fees against the Custodian refusing to obey the subpoena. This should not present a major challenge since CCP 1992 provides a $500 penalty plus damages (which should include all costs and attorney fees) that may be collected against the offending Custodian.

I am sure some local civil attorney would be happy to setup shop and build himself/herself a “cottage industry” of helping Attorney Copy Services fight off ROI companies who are charging excessive fees. As each Custodian is addressed, the court will likely provide an injunction that the Custodian stop the practice of forcing the use of ROI companies where the law specifically provides otherwise. You might even get an injunction against the ROI company, itself.

CONCLUSION

So, there you have it… Attorney Copy Services and especially those that fall under the DWC’s Fee Schedule should not be “put out of business” by ROI companies unless they simply “roll over” and fail to protect their rights.

For their part, I am sympathetic to Custodians and their ROI companies and their inability to legally charge a reasonable fee for their services. I agree that the fees in EC 1563 are too low and should be increased – BUT – I do not agree that Custodians and ROI companies should have a right to FORCE all attorneys and ACSs to exclusively use their services.

The current ROI dispute doesn’t have to include a loser; the parties just need to convince each other they aren’t going away, and then come to the table and COMPROMISE. At the moment, Attorney Copy Services feel threatened by ROI companies and are pissed off that they have to pay fees in excess of what is reasonable and payable under EC 1563. However, those same copy services would not argue with the fact that the fees provided in EC 1563 are far too low to be profitable. Therefore, both types of copy services should be able to agree on a compromise fee schedule. I believe an average fee of $25 should be considered reasonable to pay an ROI company that provides the copies to an ACS. If the ROI company refuses to agree to a reasonable fee for the copies then the ACS should employ the methods described here and in the above flowchart. Hire a competent civil attorney willing to collect his/her fees from the offending Records Custodian and convince the Custodian (and their hired ROI company) that they have to deal fairly on this issue.

FOOTNOTES