State News : New Jersey

Just six years ago, former Governor Chris Christie signed into law a bill which vested exclusive jurisdiction within the Division of Workers’ Compensation over any disputed medical charge arising from any claim for compensation for a work-related injury or illness.  That was the beginning of what we now call “Medical Claim Petitions” or MCPs filed by providers and medical facilities.  In the early years following the passage of the bill, perhaps one or two percent of all workers’ compensation claims were MCP cases.

Fast forward to 2018:  20% of all formal claim petitions filed in the Division this year are MCP cases!  You read that right: one out of every five formal claim petitions filed in 2018 in the Division of Workers’ Compensation is a petition filed by a medical provider or medical facility disputing a payment. Already through November 2018, over 6,300 MCPs have been filed in the Division in the first eleven months.

The Judges of Compensation have learned a great deal over the years about how to deal with provider disputes. They ably manage not only a high volume of formal claim petitions filed by petitioners but an ever escalating volume of MCP cases.   If the current rate of growth of MCP cases continues, one can project that in a few years one in three formal claim petitions will be an MCP case.

Why are there so many MCP cases in New Jersey when New Jersey employers have control over medical care?   That is the question this practitioner put to Kelly Royce, Senior Vice President of Managed Care Operations for First MCO, a leading managed care and medical repricing company in New Jersey.  Royce said that the key for New Jersey employers and carriers is to have robust physician and facility networks.  In that case, MCPs do not generally get filed. “You look at the contract, and that ends almost all such disputes,” she said.

But Royce pointed out that there are many situations where emergency care is provided, and the doctor and facility would not likely be in network.  When the employer or carrier receives the bills, they may be repriced based on reasonable and customary charges in the geographic area, but the provider or facility often disagree on the determination of reasonable and customary, leading to the filing of an MCP.  The amounts in dispute are often tens or even hundreds of thousands of dollars.

Royce also pointed out that even if the physician is in network, the medical facility where the procedure or surgery takes place is often not in network.  That means that the physician’s charge will be covered by the network agreement, but the facility charge may not be.  She recommends that employers spend time trying to determine where network physicians operate and making sure that these facilities are in network.

Linda Woods, VP of Bill Review Operations for First MCO, added that the determination of reasonable and customary is not uniform.  There are many different data bases such as Fair Pay and Wasserman which may have different criteria on what is reasonable and customary.  She added that Medicare has its own schedule, and PIP has its own schedule, and sometimes these schedules are also considered.  The determination of reasonable and customary may vary significantly depending on the resource that is used.

There are a number of cases that have been decided on what constitutes reasonable and customary charges.  The leading case at the Division level remains Burn Surgeons of St. Barnabas v. Shoprite, C.P. # 2009-16548, 2011 N.J. Wrk. Comp. LEXIS 10 (August 26, 2011).  In that case the physicians who were contesting the level of reimbursement by the carrier were co-surgeons, and they testified in court in support of their charges.  Each surgeon felt that he should have been paid 87.5% of usual and customary charges.  The amount in dispute was very significant.

Attorney Ann DeBellis, Director/Supervising Attorney for New Jersey Manufacturers, successfully represented NJM and argued that her company was correct in paying each co-surgeon 73.6 percent of the charged amount in this case, which was a percentage in line with payments made by other commercial carriers and well above payments from government programs.  The late Honorable Virginia Dietrich, Administrative Supervising Judge of Compensation, rejected the argument by the burn surgeons that additional monies should be paid to account for the difficulty of the procedures, the severe illness of the patient and the expertise required.  The judge ruled that all of these considerations were taken into account when the codes were prepared.

When MCP cases do get filed, the data relied on by the parties are often complicated to understand, requiring defense counsel to master obscure terminology.   On the claimant side, there are several law firms which specialize in this area of law and generally work on contingent fees.  Because of the contingent nature of the representation, the providers and facilities incur no cost in filing MCPs.  They only pay counsel if there is a recovery.

Capehart Scatchard decided several years ago to create an MCP team headed by partner Claire Ringel, Esq., to oversee these increasingly complicated claims which often involve hundreds of thousands of dollars in dispute.  One claim petition that Ms. Ringel resolved this year involved a charge by a New Jersey medical provider for $960,000 for a complex surgery.  She resolved this claim for less than 10% of the charge.  Ms. Ringel has also filed more than 50 motions to dismiss MCP cases this year where all contacts are in the State of New York (hiring, injury and work), but the MCP cases were filed in New Jersey simply because the medical procedure occurred in New Jersey and the provider was unsatisfied with the New York fee schedule.

The reality is that MCP cases are here to stay and the volume is sharply rising.  There are complicated issues of appropriate levels of payment as well as many claims with jurisdiction as the principal issue.  Defense firms need to develop the expertise to successfully represent employers, and employers need to work with companies that have great networks and repricing skills.

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John H. Geaney, Esq., is an Executive Committee Member and a Shareholder in Capehart Scatchard's Workers’ Compensation Group.  Mr. Geaney concentrates his practice in the representation of employers, self-insured companies, third-party administrators, and insurance carriers in workers’ compensation, the Americans with Disabilities Act and Family and Medical Leave Act. Should you have any questions or would like more information, please contact Mr. Geaney at 856.914.2063 or by e‑mail at jgeaney@capehart.com.