Sean Callagy - Attorney and Entrepreneur: medical provider claims

The Effect of the 2012 Amendment

The following article was written by Callagy Law’s Legal Team, and will focus on many common questions and concerns surrounding new developments, legal matters, and other procedures within the field of healthcare law Medical Revenue Recovery, PIP, Workers Compensation, and Commercial Insurance. Our mission is to answer any questions and give knowledge to many different aspects of these matters.

The New Jersey Workers’ Compensation courts provide a forum for healthcare providers to challenge inadequate reimbursements from workers’ compensation insurance carriers where the underlying claim is for a patient injured within the course of their employment. It was not until 2012 that the New Jersey Workers’ Compensation courts gained exclusive jurisdiction over these types of claims. The majority of cases that are filed in the Workers’ Compensation courts involve the injured worker’s (i.e. Petitioner) claim against his/her employer’s workers’ compensation insurance carrier (Respondent).

The 2012 Amendment to N.J.S.A. 34:15-15 effected a significant change in the rights of medical providers who have provided authorized treatment to injured workers in New Jersey. As a recent addition to the Workers’ Compensation Act, however, the language of the Amendment has not been interpreted in any prior decision in New Jersey. The full text of the Amendment provides:

Fees for treatments or medical services that have been authorized by the employer or its carrier or its third party administrator or determined by the Division of Workers’ Compensation to be the responsibility of the employer, its carrier or third party administrator, or have been paid by the employer, its carrier or third party administrator pursuant to the workers’ compensation law, R.S.34:15-1 et seq., shall not be charged against or collectible from the injured worker. Exclusive jurisdiction for any disputed medical charge arising from any claim for compensation for a work-related injury or illness shall be vested in the division. The treatment of an injured worker or the payment of workers’ compensation to an injured worker or dependent of an injured or deceased worker shall not be delayed because of a claim by a medical provider.

N.J.S.A. 34:15-15.

Prior to this Amendment, the state of the law in New Jersey with respect to medical provider claims in workers compensation matters was extensively reviewed by the New Jersey Supreme Court in Univ. of Mass. Mem’l Med. Ctr., Inc. v. Christodoulou, 180 N.J. 334 (2004). As discussed in Christodoulou, while the Workers Compensation Act with limited exceptions provides an exclusive remedy to employees injured the course of their employment, the Act “does not purport to establish an exclusive remedy for a hospital or physician that, pursuant to a contract, has provided medical services to a patient who may or may not have suffered a job-related injury.” Id. at 346. Thus, medical providers asserting claims arising from treatment provided to injured workers previously had the option to pursue their claims either in the Division of Workers Compensation, as authorized by N.J.S.A. 34:15-15, or in a common law collection action in Superior Court. Id. at 353. If a claim by a medical provider was asserted in Superior Court while a related claim by an injured worker was pending in the Division, the medical provider action was to be transferred to the Division to facilitate the resolution of all claims in a single forum. Id. at 352.

The 2012 Amendment to N.J.S.A. 34:15-15 changed existing law by vesting exclusive jurisdiction for any disputed medical charge arising from any claim for compensation in the Division, thus eliminating the option to pursue a common law collection action in Superior Court. The 2012 Amendment also changed existing law by providing that fees for treatments authorized by a workers’ compensation carrier shall not be charged against or collectible from the injured worker. Prior to the 2012 amendment, there was no statutory prohibition against a medical provider asserting its common law contractual right to payment for services provided. In the event the workers compensation carrier failed to make payment, or as is more common, made only a partial payment, and the petitioner settled its compensation claim without providing for payment of outstanding medical bills, the petitioner was exposed to potential liability for the balance. The 2012 amendment eliminated the practice of “balance billing” by requiring the medical provider to seek payment exclusively from the workers compensation carrier, with no contribution from the employee. With respect to medical provider claims covered by the 2012 Amendment, the statute thus significantly altered the medical provider’s rights by making a claim against the employer and its workers compensation carrier in the Division pursuant to N.J.S.A. 34:15-15 the exclusive remedy of the medical provider, supplanting its right to pursue its common law remedies in Superior Court.

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In 2012, N.J.S.A. 34:15-15 was amended to give the Workers Compensation Court exclusive jurisdiction over medical provider claims. Prior to 2012, it was clear that the statute of limitations for a medical provider’s claim was the six-year statute set forth in N.J.S.A. 2A:14-1, which applies to all actions of a contractual nature, express or implied, and all actions to recover on an account. Although it is unclear whether a two-year statute of limitation applies to medical provider claims filed after 2012, medical provider claims arising from events prior to the establishment of exclusive jurisdiction should carry a six-year period. The Appellate Division clearly held that the six-year period applied to the medical provider’s claim in Medical Diagnostic Assocs. v. Hawryluk, 317 N.J. Super. 338, 349 (App. Div. 1998), certif. denied, 160 N.J. 89 (1999), stating:

Finally, we deem it appropriate to discuss the statute of limitations issue in the event the Division determines that the employee’s claim is not compensable. Plaintiff asserts that if medical providers are not allowed to bring suit in the Law Division, there is the potential that their claims will be barred by the statute of limitations. The statute of limitations is six years. See N.J.S.A. 2A:14-1. We note that there is no statutory provision tolling the statute of limitations on the medical provider’s claim while an employee’s claim is pending in the Division. We are satisfied, however, that if a medical provider’s suit is transferred to the Division, as we hold today, the complaint will have been timely filed. In future cases in which the medical provider proceeds directly in the Division the statute of limitations will be tolled during the period that the matter is pending in the Division. Ibid. (emphasis added)

In Hawryluk, the Appellate Division transferred the medical provider’s claim to the Division and held that the statute of limitations for the claim was six years. In Univ. of Mass. Mem’l Med. Ctr. v. Christodoulou, 180 N.J. 334, 345 (2004), the Supreme Court overruled Hawryluk on the necessity of transferring the medical provider’s claim to the Division for a judgment of non-compensability before a Superior Court action could be filed, but did not alter its holding with respect to the statute of limitations. Although the Legislature subsequently amended N.J.S.A 34:15-15 to give exclusive jurisdiction to the Division for medical provider claims, eliminating the Superior Court option, there is no reason to suggest that the Legislature also intended to change the statute of limitations. The statute remains six years, as it does in all collection cases of a contractual or quasi-contractual nature.

A two-year statute would unfairly prejudice medical providers who rendered services to injured employees and were entitled to rely on the six-year statute in managing collection activity on their unpaid accounts. It would deprive medical providers of their property interests without any basis in a duly enacted statute. It would also unjustly enrich insurance carriers who collected premiums to pay for patients’ medical bills, then deliberately underpay for services rendered to those patients.

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 Callagy Law has some great reviews and is working hard to be a leader in multiple fields of the legal profession.