Limits Imposed on Medical Provider Applications In New Jersey Worker’s Compensation

The Appellate Courts have issued guidance on jurisdictional issues raised by medical provider applications.

The New Jersey Workers Compensation balances injured workers’ entitlement to treatment with the cost of that treatment by permitting medical providers to charge the “usual and customary” rate for procedures. Costs are controlled by permitting employers to direct the injured worker to its choice or medical providers for treatment.   New Jersey’s sister states of New York and Pennsylvania have different methods of balancing the interests of employee and employers; injured workers may treat with whomever will have them[1], but providers may only bill under a medical fee schedule.

When an injured worker with a compensable Pennsylvania or New York workers’ compensation claim opts to cross the Delaware or Hudson, and treat with a New Jersey provider the medical providers have been accepting reimbursement for treatment under the much lower Pennsylvania or New York fee schedule, and then filing Medical Provider Applications in New Jersey, seeking additional reimbursement under New Jersey’s much more generous usual and customary rates.  The recent expansion or providers rights has encouraged this practice.

The practice was challenged on jurisdictional grounds.   In Anesthesia Associates v. Weinstein and Suricare v. Waldbaums, decided together on October 7, 2020 the Appellate Division agreed with the Workers Compensation Judges, who found that the medical providers can only pursue payment in New Jersey if the underlying workers’ compensation claim would have been subject to New Jersey jurisdiction.  To quote the Court;  Unless the Division has jurisdiction over the underlying claim for a compensable work-related injury, it does not have jurisdiction over a provider claim for payment.”   Medical treatment rendered in NJ does not, by itself, confer jurisdiction.

This Court held the factors required to establish jurisdiction for a worker’s compensation claim in New Jersey claim are the same factors needed to establish jurisdiction for a provider payment application.  The six (6) factors to consider when deciding jurisdictional issues in either cause of action, following Willams v. Port Authority of NY and NJ, 175 NJ 82 (2003), are:

  • Place where the injury occurred;
  • Place of the making the employment contract;
  • Place where the employment relation exists or is carried out;
  • Place where the industry is localized;
  • Place where the employee resides; or
  • Place whose statute the parties expressly adopted by contract.

The uniform application of jurisdictional requirements amongst all litigants is a welcome development and furthers the important public policy of the consistent and equal application of the Workers Compensation Act in NJ.

Note, the Court did not delve into the other – and much more Constitutionally significant reason – to prevent NJ providers from circumventing the delicate statutory framework under which NY, NJ, and PA’s Compensation systems operate. Permitting a healthcare provider which opted to treat an injured worker receiving foreign workers’ compensation benefits to receive reimbursement for that treatment under both local and foreign law would frustrate the purposes of both states’ law, increasing the cost of workers’ compensation in all jurisdictions involved. For your dose of constitutional law on this issue, see Bowers v. Am. Bridge Co., 43 N.J. Super. 48, holding that an underlying purpose of the Full Faith and Credit Clause 28 U.S.C.A. § 1738 is to assure the operation of the principle of Res Judicata, as between states, and that states are not required to enforce the laws of their sister states, which are “obnoxious” to their own public policy.

The case is unreported, and there is time for the medical providers to appeal to New Jersey’s Supreme Court.  Call on the attorneys at Brown and Connery with any questions on this or any other New Jersey or Pennsylvania Workers’ compensation issue.

By: William T. Freeman, Partner and Travis K. Jablonski, Associate at Brown & Connery, LLP

[1] In Pennsylvania, employers control treatment only for the first 90 days following a workplace accident.