Late-payment penalties: what you are owed and how to count it

Two regimes, two clocks

California charges a self-executing increase on late payment of a properly documented bill. Which rule applies depends on what was billed: medical treatment falls under Labor Code §4603.2; medical-legal evaluations and reports under §4622.

Medical treatment — §4603.2

Payment is due “within 45 days after receipt of each separate itemization of medical services provided, together with any required reports and any written authorization” (Lab. Code §4603.2(b)(2)).

If an itemization is contested, denied or incomplete, the employer must say so in the explanation of review within 30 days of receipt, and must state all additional information required (§4603.2(b)(2)).

A properly documented bill not paid within the 45 days “shall be paid at the rates then in effect and increased by 15 percent, together with interest at the same rate as judgments in civil actions retroactive to the date of receipt of the itemization” — unless the employer both pays the uncontested amount in time and explains in the EOR why the rest is contested and what remedies the provider has (§4603.2(b)(2)).

Medical-legal — §4622

Payment is due within 60 days after the employer receives each separate written billing and report. If not paid, the unreasonably unpaid portion “shall be increased by 10 percent, together with interest thereon at the rate of 7 percent per annum retroactive to the date of receipt of the bill and report by the employer” (Lab. Code §4622(a)(1)).

The increase does not apply where the employer timely pays the portion it deems reasonable and then prevails (§4622(a)(2)).

What you need to collect it

Everything turns on the date of receipt. Keep proof of when each bill and report was received; both statutes count from it, and interest runs back to it.

If you dispute the amount paid, second review must be requested within 90 days of service of the explanation of review (8 CCR §9792.5.5(b); Lab. Code §4622(b)(1)) — the step before independent bill review.

How ChironAI™ OM helps

OM computes the statutory penalty and interest on a late-paid bill under the right regime, reads EORs into proposed postings that a biller confirms, and tracks appeals as the ladder to second review and IBR. Try the late-payment calculator for a single bill.