New Jersey, Balance Billing and Fee Schedules

New Jersey is finally getting around to addressing the problems inherent in "balance billing."

To the uninitiated, balance billing is the practice where the medical vendor goes after the injured worker for any balance deemed not satisfactorily resolved by the workers' compensation insurance carrier or employer.

I could be wrong, but I believe that most states prohibit balance billing and absolve the injured worker of any liability for industrially related medical treatment. Some states make balance billing a criminal act.

There are three bills pending in the Garden State that work together to accomplish the goals of a) prohibiting medical vendors from going after injured workers and, b) consolidating the adjudication of medical bills.

Some jurisdictional issues need to be resolved in the New Jersey legislature.

Presently there seems to be dual jurisdiction with some medical bills being adjudicated in the workers' compensation system and some in the civil court system.

Senate Bill 2022, filed by Senate Labor Committee Chairman Fred Madden Jr., D-Turnersville, leaves the resolution of medical disputes up to DWC but provides no new system for dispute resolution.

Assembly 2652, filed by Tim Eustace, D-Maywood, was amended by the Assembly last spring to remove a requirement that all medical disputes go to binding arbitration.

And S 1936, filed by Sen. Linda Greenstein, D-Monroe also prohibits balance billing but requires that DWC develop procedures, "including a system of binding arbitration," to resolve medical disputes.

A key issue is ensuring that medical billing disputes do not slow down the provision of benefits to injured workers, and the state's claimant lawyers seem to be in favor of some binding arbitration system.

Part of the problem may be that the state lacks a medical fee schedule, thus any amount in dispute is fair game.

The New Jersey Division of Workers' Compensation's (DWC) Task Force on Medical Provider Claims reported in November 2010 that disputes over medical bills were clogging the workers' compensation system and delaying the resolution of claims. The task force noted that New Jersey law requires carriers and employers to pay bills according to "usual and customary" charges.

New Jersey could take a lesson from other, bigger, states that have already dealt with this issue. Texas long ago adopted not only a medical fee schedule, but an out of court, nearly binding medical bill dispute resolution process separate and apart from the claimant's case in chief.

California took a lesson from Texas' playbook and recently passed a law requiring an independent medical bill dispute resolution process that is binding on the parties.

And California long ago outlawed balance billing. Both Texas and California have had fee schedules for quite some time.

New Jersey is a bit behind in workers' compensation management. These proposed laws will go a long ways towards making that state's system more efficient for everyone. If the state would also adopt a fee schedule the amount of medical billing litigation would drop dramatically.