Section 40 Liens | Callagy Law

The purpose of this post is to help assist healthcare providers and owners with questions they have concerning their business or relevant knowledge in the field. The Callagy Law team is knowledgeable in many law practice areas and will frequently post topics ranging from Medical Revenue Recovery, PIP, Workers Compensation, and Commercial Insurance. We hope to have this blog shed a light on many common questions.

Section 40 Liens

Under Section 40, a petitioner is obligated to reimburse the workers’ compensation insurance company two-thirds of whatever they paid you (temporary benefits, medical benefits and Perm benefits) less $750.00. The general theory is that an injured worker is not allowed to a “double recovery.” In Workers’ Compensation, when someone is injured on the job, the employer pays temporary disability benefits, provides medical care, and also provides permanent disability benefits based on the nature and extent of the injured worker’s permanent injuries. The employer pays this regardless of fault.  However, when there is a liable third party, the law allows the employer to seek reimbursement of a portion of the benefits that they paid out from that third party.

Specifically, Section 40 (N.J.S.A. 34:15-40) provides in pertinent part: “Where a third person is liable to the employee or his dependents for an injury or death, the existence of a right of compensation from the employer or insurance carrier under this statute shall not operate as a bar to the action of the employee or his dependents, nor be regarded as establishing a measure of damage therein. In the event that the employee or his dependents shall recover and be paid from the said third person or his insurance carrier, any sum in release or in judgment on account of his or its liability to the injured employee or his dependents, the liability of the employer under this statute thereupon shall be only such as is hereinafter in this section provided.”

In Greene v. AIG Casualty Company, A-6287-11T4 (App.Div. October 16, 2013), the only published case on this issue, the Appellate Division provided that is does not matter that the compensation case is ultimately found non-compensable: the employer still can enforce its lien rights as to prior payments made. The Court went on to state that its holding is consistent with the remedial purpose of the Act by “making benefits readily and broadly available to injured workers through a non-complicated process.” Tlumac v. High Bridge Stone, 187 N.J. 567 (2006).  The court said that this policy encourages employers to make prompt voluntary payments because it provides much needed medical and wage loss benefits to claimants while their claim is being investigated.  In addition, the court said that its decision is consistent with the policy in New Jersey against double recoveries.

Parties should be aware of the availability of Section 40 liens when defending/pursuing workers’ compensation claims as an option to avoid protracted litigation.

 We hope you found the information provided in this article helpful to various questions you may have had concerning the healthcare industry. For information pertaining to our services for medical providers, please click here. Please note, Callagy Law has recovered over $175,000,000 for medical providers, and that number grows daily. Please free to reach out to Sean Callagy of Callagy Law at any time for questions you may have concerning personal and business matters. Callagy Law offices are located conveniently in Paramus, NJ. Beyond the scope of information, Sean Callagy has developed multiple areas of our healthcare legal practice and business coaching. Feel free to connect with us on Facebook, Twitter or LinkedIn! Additionally you can subscribe to our daily videos on YouTube.

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Uber-Important: Employee Contracts! | Callagy Law

The Difference between an Employee and an Independent Contractor and its Legal Ramifications

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The following article was written by Samuel S. Saltman from Callagy Law’s Legal Team, and will focus on many common questions and concerns surrounding new developments, legal matters, and other procedures within the business and commercial litigation. Our mission is to answer any questions and give knowledge to many different aspects of these matters.

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Uber is finding out the hard way that formal written employment contracts are … uber important.

The booming ridesharing company has lost recent legal battles over the classification of its drivers as either employees or independent contractors. The drivers sued for, among other things, unemployment benefits and outstanding business expenses. In these cases, whether Uber drivers are classified as employees or independent contractors makes all the difference: If the former, they are entitled to the compensation they seek; if the latter, nothing.

Clearly, the law treats employees much better than it treats independent contractors. Unlike independent contractors, employees are covered by a multitude of state and federal laws, including minimum wage, overtime, antidiscrimination, workers’ compensation benefits, and, of course, business expenses and  unemployment benefits. There are also significant tax withholding differences between the two.

So what distinguishes an employee from an independent contractor? While there is no bright-line rule, courts focus on a variety of factors, including:

• whether the worker can earn a profit or suffer a loss from the work (if so, more likely an independent contractor);


• whether the worker earns a wage or is paid per job/project (if the former, more likely an employee; if the latter, independent contractor);


• whether the worker invests in equipment (if so, more likely an independent contractor); and


• whether the worker provides services that are integral to the company’s day-to-day operations (if so, more likely an employee).

From a company’s perspective, both classifications have pros and cons. For Uber, having to pay, for example, overtime and worker’s compensation benefits to its thousands of drivers across the country is clearly an expense inimical to its business model – or so it thinks. But Uber does exert significant control over its drivers in the form of sole discretion over fares, the right to charge drivers a cancellation fee if they reject a passenger, prohibitions against picking up passengers without using the Uber app, and the right to suspend or deactivate drivers’ accounts. Uber drivers appear to be telling their “employer” – you can’t have our cars and drive them too.

Despite the recent Uber driver victories, states across the nation are split on the issue of their classification. Georgia, Pennsylvania, Colorado, Indiana, Texas, New York, Illinois, and California have found them to be independent contractors, although a recent case in California is challenging that. The lesson to be learned here is that whatever classification you decide is right for your business model, it’s best to put the terms of employment into a formal written agreement signed by the worker.

Even written agreements, however, are not fail-proof. The actual circumstances of the relationship matters more. Of course, a carefully worded written employment agreement should dictate those circumstances and will strongly support the company’s position in court. At Callagy Law, we have years of experience drafting such agreements and enforcing them in court, and can advise you every step of the way to ensure that you and your workers have an uber-clear understanding of your relationship.

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We hope you found the information provided in this article helpful to your everyday life and business. Please free to reach out to Sean Callagy or the Callagy Law team at any time for questions you may have concerning personal and business matters. Callagy Law’s headquarters is located conveniently in Paramus, NJ. Beyond the scope of information, Sean Callagy has developed multiple areas of business legal practice and business coaching, if you need help with anything, please reach out to us by calling 201-261-1700 or by emailing us here. Feel free to connect with us on Facebook, Twitter or LinkedIn! Additionally you can subscribe to our daily videos on YouTube by clicking here.

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PPO Contracts and PIP Arbitration | Callagy Law

The purpose of this post is to help assist healthcare providers and owners with questions they have concerning their business or relevant knowledge in the field. The Callagy Law team is knowledgeable in many law practice areas and will frequently post topics ranging from Medical Revenue Recovery, PIP, Workers Compensation, and Commercial Insurance. We hope to have this blog shed a light on many common questions.

N.J.A.C. 11:3-29.1(b) “. . . establish(s) medical fee schedules on a regional basis for the reimbursement of health care providers providing services or equipment for medical expense benefits for which payment is required to be made by automobile insurers under PIP coverage and by motor bus insurers under medical expense benefits coverage.”

 

However, medical providers often participate in a preferred provider organization, commonly referred to as a “PPO” agreement.  Simply, medical providers participate in PPO agreements and accept discounted payments in exchange for certain benefits outlined in the contract.

 

Payment disputes often arise when an insurance carrier pays PIP coverage benefits in according to the PIP Fee Schedule Rates instead of according to the PPO discount rates.  When an insurance carrier and a medical provider cannot settle such disputes, the medical provider may elect to have the matter resolved in binding arbitration, a forum administered by the New Jersey Department of Banking and Insurance (DOBI).  Such matters are decided by a Dispute Resolution Professional (DRP).

 

Often, claimant medical providers argue that any improper PIP coverage payments constitute a violation of the PPO payment terms, resulting in a loss of the PPO discount.  Suppose the PPO contract allows the insurance carrier to take a 20% discount of the billed charges, but payment was made per the PIP Fee Schedule.  If DOBI regulations provide for payment to be made according to billed charges, then the claimant was entitled to payment at 80% of the billed charges, as outlined by the PPO contract in this scenario.  In arbitration, the medical provider may seek the full amount of the billed charges, if the PPO contract allows for such redress.

 

Recently, a DRP agreed with this position in the matter Meadowlands Hospital a/s/o Walter Martinez v. GEICO (NJ-1540551).  The DRP made the following finding:

 

Based upon a review of the record evidence, claimant’s argument is meritorious.  . . . respondent did not pay claimant at 65% of the charges but rather inexplicably paid this facility at the New Jersey Physician’s Fee Schedule for CPT code 62310 and 62311.  Clearly, this action was in violation of the terms of the PPO agreements and respondent loses the benefit of the PPO contract reduced payment rate.  Claimant is awarded the balance sought for CPT codes 62310 and 62311 . . .

 

Similarly, in Raritan Bay Medical Center a/s/o D.H. v. GEICO (NJ-1596762), the DRP decided that the respondent insurance carrier had “failed to issue proper reimbursement . . . [, and] that the PPO Agreement states that Respondent is not permitted to apply any discount and Claimant is entitled to receive 100% of billed charges.  Claimant is awarded $11,777.45 for codes 70450, 70486 and 72125.”

 

In NJ-1596762, the DRP construed the PPO contract as requiring the insurance carrier to issue payments within 30 days of receipt, per the contract’s payment terms.  Because the insurance carrier issued payment per the PIP Fee Schedule instead of the PPO discounted rate, the DRP found contact payment terms were violated, resulting in the discount being forfeited.

 

Careful review of a PPO contract payment terms is essential for any medical provider participating in an binding arbitration.

 

We hope you have found this information helpful and interesting. Please reach out to us here with any questions or comments regarding healthcare legal matters, or if you are a medical provider that has questions regarding Medical Revenue Recovery, PIP, Workers Compensation, and Commercial Insurance.. Feel free to search us on Facebook, Twitter or LinkedIn!

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