Pezzano Mickey & Bornstein, LLP - February 2020

FEB 2020

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Perspectives PMB

NEW LAW PROTECTS CREDIT RATINGS OF INJURED WORKERS Stopping Harassment by Collection Agencies for Work-Related Medical Bills

Last month, Governor Murphy signed bipartisan legislation that seeks to protect the credit scores of injured workers. The new law, which amends Section 15 of the Workers’ Compensation Act, protects those who are hurt at work from damaging their credit if work- related medical bills are not promptly paid by an insurance carrier. Employees who are injured at work are entitled to receive 100% coverage of their medical bills, with no deductible or co-payments. Seems like a straightforward benefit, right? In practice, insurance coverage for medical bills is not so simple. First, a workers’ compensation carrier is only responsible for paying 100% of the “authorized”medical treatment. If the patient receives treatment with an unauthorized physician, the workers’ compensation carrier will not pay that medical bill. In addition, even physicians who are authorized by the insurance carrier sometimes dispute the level of reimbursement they receive on a particular medical bill. New Jersey law has long provided that physicians cannot “balance bill” injured workers for treatment following a work accident. Physicians may bring a direct claim against the insurance carrier in the Division of Workers’ Compensation seeking payment of their medical bills or a higher reimbursement rate. If a physician or hospital sues a patient in Superior Court seeking collection of an arguably work-related medical bill, the patient’s attorney may transfer that claim to the Division of Workers’ Compensation. However, medical providers were not previously forbidden from sending the bill to collections and reporting it to the credit agencies.

As a result, employees injured at work could be subjected to harassing phone calls from collection agencies and may be shocked to discover that their credit was harmed because of unpaid hospital bills that should have been covered through workers’ compensation. Just one negative report from a debt collector can cause your credit rating to plummet 50–100 points. You may not notice any harm to your credit immediately. However, the damage will be readily apparent the next time you attempt to take out a car loan or a mortgage, causing you to be hit with exorbitant interest rates since you are now considered a “bad risk” by lenders. It is adding insult to injury for an employee to be forced to endure not only lost wages and a disability but also a loss of credit. The New Jersey Council on Safety and Health (COSH), a nonprofit group of workers’ compensation attorneys, of which I am a member, sought a legislative fix for this injustice. Members of COSH drafted the original collections bill and worked with Assemblyman Ron Dancer (R) and Assemblywoman Joann Downey (D), the legislators who sponsored the bill, to help get it passed into law. Lobbyists from both the insurance industry and large medical groups attempted to persuade Dancer to withdraw his support for the bill. My mother and I had the pleasure of meeting Dancer previously in his lovely Monmouth County District. Rather than caving to their demands, Dancer reached out to me, as a representative of COSH, to analyze the objections to the bill. I was so pleased and honored that he would take my opinion as an attorney on the “front lines” into consideration when evaluating the legislation. He listened and agreed that no changes were necessary

to the bill as written, which was ultimately passed by the Senate with few changes and subsequently signed by the governor. Thank you, Assemblyman Dancer! The new law prohibits physicians and hospitals from reporting work-related medical bills to collections until a workers’ compensation judge has ruled on whether the treatment was necessary and related to a work injury or a settlement is reached in the Division of Workers’ Compensation. If a medical provider violates the law and does report the unpaid bill to the credit agencies, the judge may order the provider to retract the reported charges, impose a fine of up to $5000, and take the necessary steps to rehabilitate the credit rating of a claimant damaged by the inappropriate reporting. I’m proud to have played a small part in furthering this important piece of legislation. Employees injured at work in New Jersey may now sleep a bit sounder knowing that their credit ratings will not be damaged by work- related medical bills.


–Lisa Pezzano Mickey | 1

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