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Appellate Court Concludes that New Jersey Medical Providers Cannot Bring Claim Before New Jersey Workers' Compensation Court for Out-Of-State Injuries

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One of the most contentious areas of New Jersey Workers’ Compensation today is where a medical provider seeks reimbursement of payments in connection with claims where patients’ treat in New Jersey but otherwise has no employment connection to New Jersey.

The New Jersey providers do this because the reimbursement rates in New Jersey tend to result in a much higher payment to the provider than what is allowable in the surrounding states, particularly New York and Pennsylvania.

On October 7, 2020, the Appellate Court concluded that a New Jersey medical provider cannot maintain an action under the New Jersey Workers’ Compensation Act to recover payment for their services from their patients’ employers, where the patients lived and worked outside of New Jersey, were injured outside of New Jersey and filed workers’ compensation claims in their home states.

The appeal was taken up by two medical providers on two separate claims in which the Workers’ Compensation Judges issued Orders dismissing the claims for lack of jurisdiction. The providers argued that the New Jersey Workers’ Compensation Act grants the Division with broad exclusive jurisdiction over medical provider claims, even if there is no claim for compensation by an injured employee pending in New Jersey. Additionally, the medical providers argued that their claims are separate causes of action, rooted in breach of contract over which the state of New Jersey has jurisdiction through the Workers’ Compensation Act. The Appellate Court found no merit in these arguments.

The facts of each case are important here – in the first case brought by Anesthesia Associates of Morristown (AAM), the employee suffered a compensable work-related accident in Pennsylvania; the injured worker was a Pennsylvania resident; and the employer was based in Pennsylvania. The injured worker had an established workers’ compensation claim in Pennsylvania as well. The injured worker presented to AAM for surgery in New Jersey for one day. AAM received payment pursuant to Pennsylvania laws in the amount of $1,070.30. AAM brought its claim before the New Jersey Division seeking the balance of its charges in the amount of $12,992.00.

In the second case brought by Surgicare of Jersey City (SJC), the injured employee was a resident of New York, who had been hired in New York and suffered a compensable, work-related accident in New York. The injured employee also had an established workers’ compensation case in New York. The employee was directed by his New York doctor to undergo a one-day surgery in a New Jersey facility. The surgery was completed by the New York doctor using equipment and devices ordered by the New York doctor. SJC received $20,085.28 pursuant to New York Law. SJC brought its claim seeking the balance of the overall charges which were $252,900.00.

The court concluded that unless the Workers’ Compensation Division has jurisdiction over the underlying claim for a compensable work-related injury, it does not have jurisdiction over a medical provider claim for payment.

What is interesting in these cases is that the treatment in New Jersey was limited to a one-day, single visit. Additionally, the injured workers resided outside of New Jersey. We see many claims where the injured worker lives in New Jersey and presents for more than a single visit of treatment in New Jersey given the location of their residence, but all other employment contacts are outside of the state. While we know that residency alone is not enough to confer jurisdiction in New Jersey, I question whether these facts would affect the Courts’ decision. Additionally, it is also important to note that this case is not binding as it is unreported.

Nevertheless, this is a great win for the employers in New Jersey and will eliminate a significant amount of litigation over claims being brought for higher reimbursement pursuant to New Jersey law.