In a notable development within New Jersey’s legal landscape in the last few years, healthcare providers seeking reimbursement for medical treatments cannot directly sue workers’ compensation carriers due to the exclusivity in handling medical disputes provided by New Jersey law. An overwhelming increase in medical claim petitions has been observed in New Jersey’s workers’ compensation claims. A notable case has brought attention to jurisdictional complications, particularly when cases from neighboring states like New York or Pennsylvania are brought into New Jersey solely for specific medical treatments.

A specific case, Hudson Regional Hospital v. New Hampshire Insurance Co., decided by the Appellate Division on November 16, 2023, sheds light on this complex area. Hudson Regional Hospital, located in Secaucus, New Jersey, sought compensation for medical services provided to five New York residents injured in New York during their employment. These claims were initially submitted to the New York State Workers’ Compensation Board, which reimbursed Hudson Regional based on the New York Workers’ Compensation Medical Fee Schedule, albeit at a lesser amount than the hospital’s charges. The hospital elected not to dispute these awards through New York’s arbitration process.

Instead, Hudson Regional pursued compensation under the New Jersey Workers’ Compensation Act, arguing that since the medical procedures were performed in New Jersey, they should be reimbursed according to New Jersey’s guidelines. These guidelines do not implement a fee schedule and allow for reimbursement based on “reasonable” community-standard charges (UCR). Hudson Regional aimed to recover the difference between the New York compensation and their full charges.

However, the New Jersey Division of Workers’ Compensation dismissed these claims due to lack of jurisdiction, pointing out that these were New York workers’ compensation cases since the injuries and employment were rooted in New York. Hudson Regional did not challenge these dismissals further.

Taking an unconventional step, Hudson Regional then filed a lawsuit in the New Jersey Law Division against New Hampshire Insurance Company. The hospital argued that the patients were third-party beneficiaries under the insurance policies issued by New Hampshire to the New York employers, thus entitled to higher benefits under New Jersey law than the New York schedule permitted. Their suit framed this as a case of breach of contract, breach of the implied covenant of good faith and fair dealing in its policies, unjust enrichment, and unfair practices, seeking $386,961.32 in damages.

The court, however, sided with New Hampshire Insurance, asserting that the New Jersey Division of Workers’ Compensation holds exclusive jurisdiction over such medical reimbursement disputes, thereby negating the legal basis for Hudson Regional’s civil complaint. The Appellate Court upheld this decision, emphasizing that unsatisfactory outcomes from the Division cannot be bypassed through breach of contract suits in Superior Court against workers’ compensation carriers.

In juxtaposition, the court also revisited D’Ascoli v. Stieh. In this case, a New Jersey medical provider was allowed to pursue payment through the Superior Court from an out-of-state patient for services provided in New Jersey, notwithstanding that the patient had received workers’ compensation benefits in their home state. This highlights a nuanced interpretation of the jurisdiction and rights surrounding medical reimbursement in workers’ compensation scenarios involving cross-state elements.