The purpose of this post is to help assist those with questions they have concerning their business or medical practice. The Callagy Law team is knowledgeable in many law practice areas and will frequently post topics ranging from Medical Revenue Recovery, PIP, Workers Compensation, and Commercial Insurance. We hope to have this blog shed a light on many common questions.
In New Jersey, the Department of Labor and Workforce Development oversees Workers’ Compensation. Petitioner medical providers may file a claim to recover payments denied by the insurance carrier, a self-insured corporation, or a third party administrator.
Pursuant to N.J.S.A. 34:15-15, Medical and hospital service, “… All fees and other charges for such physicians’ and surgeons’ treatment and hospital treatment shall be reasonable and based upon the usual fees and charges which prevail in the same community for similar physicians’, surgeons’ and hospital services.” Because there is no workers’ compensation fee schedule in New Jersey, establishing usual, customary and reasonable fees are central to seeking additional reimbursement in a workers’ compensation claim.
Under New Jersey law, a medical provider, not an insurance carrier, “establishes [the provider’s] own customary rate.” Cobo v. Market Transition Facility, 293 N.J.Super. 374, 389 (App. Div. 1996). While an insurance carrier may review the medical provider’s fee to ensure that it has billed at its usual and customary rate, the provider is entitled to its billed rate so long as it is reasonable. (See: Id. at 386). (emphasis added) In determining the reasonableness of a medical provider’s fee, courts look to a number of factors, including the following: 1) the subject provider’s billing history, 2) disparity in charges to different insurance carriers, 3) what other providers are charging for the service. (See: Id. at 387).
The Court in Cobo, citing 24 NJR 1348 further stated, “The provider, in submitting the billings, makes the initial determination as to what his or her usual, customary and reasonable fee is….thus, the scheme envisions that the health care provider will set its own customary fee, not the insurer or the insurer’s auditor.”
One way for a medical provider to establish usual, customary and reasonable fees is with exemplar Explanation of Benefit forms from insurance carriers and third party administrators indicating the usual and customary rate billed by the petitioner medical provider (and other medical providers) for the appropriate CPT Codes which had been reimbursed at 100%. Specifically, the Explanations of Benefit forms demonstrate the consistency of a petitioner medical provider’s billing practices by documenting, regardless of insurance carrier or third party administrator, the usual and customary rates charged for the CPT Codes at issue. Providing such Explanation of Benefit forms may expedite settlement negotiations.
We hope you found the information provided in this article helpful to various questions you may have had concerning the healthcare industry. For information pertaining to our services for medical providers, please click here. Please note, Callagy Law has recovered over $185,000,000 for medical providers, and that number grows daily. Please free to reach out to Sean Callagy of Callagy Law at any time for questions you may have concerning personal and business matters. Callagy Law offices are located conveniently in Paramus, NJ. Beyond the scope of information, Sean Callagy has developed multiple areas of our healthcare legal practice and business coaching. Feel free to connect with us on Facebook, Twitter or LinkedIn! Additionally you can subscribe to our daily videos on YouTube.
Learn More About Callagy Law Here:
Establishing Usual/Customary Rates in Workers Compensation
