On July 20, 2023, New Jersey Governor Phil Murphy signed Senate Bill, No. 3309 (A-4832) into law. The law, effective immediately, raises the maximum allowable fees for workers’ compensation evaluating physicians and expands the providers entitled to fees.
The maximum fee paid to an evaluating physician who provides a written opinion regarding the need for medical treatment or for an estimation of permanent disability is increased to $1,000. This does not necessarily mean that all evaluating physicians will charge the maximum fee or that all judges will award the maximum fee, but this does represent an increase of $400 over the previous maximum of $600.
The bill also establishes that certain providers of psychological treatment, including psychologists, nurse practitioners, and licensed clinical social workers, may be paid a provider fee for reports or testimony regarding the recommended course of treatment. That fee is to be equivalent to the fees paid to physician providers of such reports or testimony as set forth in the new legislation.
There are two types of New Jersey workers’ compensation settlements – Orders Approving Settlements and Section 20 settlements – both impacted by this new legislation. Workers’ compensation claims without significant issues of causation, liability, jurisdiction, or dependency resolve under N.J.S.A. 34:15-22, otherwise known as an Order Approving Settlement. In such cases, a specific disability percentage is assigned, and the injured worker maintains the right to file a Reopener Application and seek additional benefits within two years of the final payment of benefits.
Cases with causation, liability, jurisdiction, or dependency issues can resolve on a full and final Section 20 basis under N.J.S.A. 34:15-20. Once settled on a Section 20 basis, the injured worker’s reopener rights are extinguished, and the injured worker cannot seek additional benefits related to the work accident.
For resolutions on an Order Approving Settlement basis, respondents pay their own exam fees, which are not subject to the statutory maximum, and the parties split the petitioners’ exam fees, which are subject to the statutory maximum, 50-50. Both petitioners and respondents will be impacted in Order Approving Settlement cases; each party will now be responsible for up to $500.00 per petitioner exam, increased from $300.00. In cases where petitioners require multiple needs for treatment and/or permanency exams, the increased maximum may result in a significant rise in costs.
For full and final resolutions on a Section 20 basis, petitioners are responsible for 100% of their own exam fees as well as 100% of their attorneys’ fees. While petitioners are technically responsible for these costs and fees, in practice, they oftentimes come out of respondents’ pockets because the common practice for Section 20 cases is including these costs and fees in the overall valuation.
For example, an Order Approving Settlement case with a single permanency exam on petitioner’s side resolving for 5% of partial total disability at the maximum 2023 rate would result in an award of 30 weeks at $293.00/week for a total of $8,790.00. The 20% attorney fee of $1,758.00 for petitioner’s counsel would be split 60-40 between the respondent and the petitioner with respondent paying 60%, or $1,054.80. The $1,000.00 permanency exam/report fee would be split 50-50. This would result in the respondent paying a total of $10,344.80. If that same case were instead resolved on a Section 20 basis, the case would likely be resolved for closer to $12,500.00 because, while they may be 100% petitioner’s responsibility, in practice, the entire attorney fee and the entire exam/report fee are instead calculated into the Section 20 valuation.
With the new law increasing the maximum amount allowable for petitioner’s exams, despite the fact that petitioner’s exam costs come out of their own awards, additional costs in Section 20 cases may end up being shouldered by respondents (particularly where multiple written reports or estimations may be required). In other words, the practical impact of the increase in petitioners’ doctors’ fees will likely be increased exposure for respondents on both Order Approving Settlement and Section 20 cases.
To lessen the impact of these increased costs, particularly in cases ripe for Section 20 resolutions, practitioners should, when permitted by the judge, consider attempting to resolve claims without the need for permanency exams. Otherwise, the brunt of the increase is likely to fall upon respondents.