Two landmark decisions from the New Jersey Appellate Court may change the state’s longstanding status as a target for medical provider claims from out-of-state workers’ compensation claimants.
For years, employers and insurance carriers have frustratingly seen an influx of medical provider claims in New Jersey when often times the only connection to New Jersey is a single medical service performed for out-of-state claimants. The motivation for filing New Jersey medical provider claims was obvious—New Jersey does not have a fee schedule, which would allow out-of-state medical providers to bypass the fee schedule in their respective states to demand a larger payment from the employers and insurance carriers.
For example, a medical provider in New York would render almost all treatment in New York, and then perform a surgery in a New Jersey facility to bypass the fee schedule in New York. If the employers and carriers refuse to pay at New Jersey’s customary rates (which are often higher rates), the medical provider would file a New Jersey Medical Provider Claim (MPC) to pursue payment above the New York fee schedule in New Jersey. With the most recent pair of decisions from New Jersey’s Appellate Court, this issue is now closer to being resolved in employers’ and carriers’ favor.
On October 7, 2020, the New Jersey Appellate Court issued landmark decisions regarding jurisdiction over medical provider claims where the underlying claim is outside of New Jersey. In two separate cases, Anesthesia Associates of Morristown, P.A. v. Weinstein Supply Corp., Nos. A-5033-18T4, A-5718-18T4, the Appellate Division determined that New Jersey lacks jurisdiction over medical provider claims where the only connection to New Jersey is the location of the medical treatment provided. The Appellate Court decided two cases, one in which the underlying workers’ compensation claim is from Pennsylvania and another in which the underlying workers’ compensation claim is from New York. The court noted the employer and the claimant resided in New York and Pennsylvania respectively, the accidents occurred in New York and Pennsylvania, and the only connection to New Jersey was the medical service provided in New Jersey.
The court strongly rejected the medical providers’ arguments that New Jersey had jurisdiction over these claims based upon contract law. The court agreed with employers’ and carriers’ position all along that there is no basis for finding New Jersey has jurisdiction over extraterrestrial claims, especially where everything else occurred in a different state, and with the only connection to New Jersey being the location of the medical provider.
Notably, the opinion cites the Marconi decision, which held that residency alone is insufficient to find jurisdiction exists over a claim. Therefore, in extraterrestrial claims where the claimant is a New Jersey resident, there must be another connection to New Jersey for there to be jurisdiction in New Jersey Workers’ Compensation court.
The court emphatically slammed the final nail into the coffin with this statement: “[u]nless the Division has jurisdiction over the underlying claim for a compensable work-related injury, it does not have jurisdiction over a MPC for payment.” In essence, the court affirmed that if New Jersey could not exercise jurisdiction over the underlying claim, then New Jersey could not exercise jurisdiction over a medical bill dispute related to the underlying claim.
The firm that represented the medical providers has signaled that it will be asking the New Jersey Supreme Court to weigh in. In the coming weeks to months, the Supreme Court will decide whether it wishes to weigh in on the issue.
Goldberg Segalla will continue to monitor the cases. For now, this is a significant win for employers and carriers and a giant step closer to resolution of this frustrating medical provider issue. Goldberg Segalla intends to press immediately for a full dismissal of all claims where a jurisdictional defense is viable under the recent Appellate Division decisions. It remains to be seen whether workers’ compensation judges will begin granting dismissals immediately, or whether they will wait until the Supreme Court has weighed in on the issue.
For more information on this decision or for immediate guidance, contact: