[Editor’s note.  As noted earlier, due to the high direct and indirect costs of unfocused and overly broad discovery, I have decided to examine in depth the various issues that most contribute to unnecessary and excessive discovery costs.  First up is medical records acquisition and review costs.  Below is the second piece on this issue by my colleague, Don Douglass.  Don is an experienced reviewer/auditor of legal bills and is a former insurance defense lawyer with over 30 years of experience.   John Conlon]

  Controlling Medical Records Acquisition & Review Costs

Part II

By

Donald D. Douglass

In a previous blog piece, I generally discussed the importance of controlling the litigation expense of obtaining medical records.  I identified three things to consider for effective financial management:  the necessity of records being ordered, the appropriate billing practices for the process of obtaining the records and the proper staffing for the review, summary and evaluation of the records.

In my prior blog piece, I addressed the first consideration: managing the necessity of records ordered.  This blog piece addresses the second consideration: overbilling for the work done to acquire medical records.

Fortunately, litigation billing guidelines used by most insurers usually provide the basis for limiting excessive fees for medical records acquisition.  These guidelines normally contain language about using lower billing staff when possible, reusing previously drafted documents, and limiting billing amounts for preparation of form documents.

Even if there are no litigation billing guidelines in place, the ethics of the legal profession operate to prevent attorneys (and their paralegals) from charging more time than it actually takes to complete a task, such as to fill out a simple form document.  See, e.g., Comments to RPC 1.5, ABA Annotated Model Rules of Professional Conduct (6th ed. 2006) at p. 70, citing In re Disciplinary Proceeding against Vanderbeek, 101 P.3d 88 (Wash. 2004)(disbarment for habitually inflating client bills, charging excessive fees for preparing simple form pleadings, withdrawal notices, etc.).

In considering this issue, it is important to remember that for most firms the process of ordering medical documents is routine and the documents generally needed are usually form documents that require only the addition of basic information (usually downloaded from other previously prepared form documents).  There is rarely a need for drafting of original documents and the form documents needed to be prepared can be easily prepared by a paralegal at a paralegal rate. See Wheeler v. Coss & City of Reno (D. Nev. 2010)(court agreeing “that the drafting of subpoenas and notices are classically paralegal work”).

Because the ordering of medical records does usually involve the “routine” preparation of “form” documents that can be prepared in a few minutes time, the billing should be for the minimum incremental amount agreed upon, usually .1 hour.  Billing entries for .2 hour or .3 hour for preparing the documents necessary for a records subpoena is excessive as it should not take 12 minutes or 18 minutes to prepare these very basic form documents.  In fact, an experienced legal support staff member should be able to prepare most, if not all, of the documents required (notice, authorization, subpoena, cover letter) for ordering records from one provider within a few minutes of time.

Similarly, follow-up phone calls, letters and emails should also be billed at the minimum increment amount unless shown to have required additional time.  Again, it should be done by a paralegal at a paralegal rate and it should not take 12 to 18 minutes to draft a short reminder letter or e-mail (also likely a form document) that is likely less than a few sentences in length.  Also, it is unethical for an attorney (or the attorney’s paralegal) to bill a set minimum amount of time to prepare or read short documents if it results in excessive charges. See In re Zirkle, 911 N.E.2d 572 (Ind. 2009)(two year suspension for, inter alia, charging a minimum of .25 hour for any work – including tasks such as preparing or reading a short e-mail).

In summary, while ordering (or subpoenaing) of third party medical records from a provider is often a multi-step and multi-document process, it is a process that usually involves the use of short form documents that can be easily done by lower billing support staff in a few minutes. Nevertheless, if not properly controlled, the fees associated with this process can easily add hundreds of dollars or more in excessive legal costs to a file.

The next blog piece in this series discusses the third consideration for controlling the litigation associated with medical records: the proper use of staffing for summarizing and managing medical records.