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(c) 2018 Jon L Gelman, All Rights Reserved.

Monday, April 30, 2018

NJ Mandates Reporting of Medicare Conditional Payments

The NJ Division of Workers’ Compensation has now mandated the reporting of pending workers’ compensation claims possibly eligible for reimbursement of conditional medical payments to the US Centers for Medicare and Medicare Services  (CMS) as a condition precedent to the settlement of a pending claim for benefits.  The directive was outlined in a memorandum issued by Russell Wojtenko, Jr., Director and Chief Judge of Compensation on April 18, 2018.
Russell Wojtenko, Jr.,
NJ Director and Chief Judge
 of Compensation

The memorandum stated: “Before a N.J. Judge of Compensation can consider a proposed Order Approving Settlement or Order Approving Settlement under N.J.S.A. 34:15-20 (Section 20 settlement) involving a petitioner who is a Medicare beneficiary, the parties shall first report the required workers' compensation claim information to CMS as set forth by Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007. The parties shall also begin CMS' process of obtaining conditional payment information.”

The parties were reminded of their responsibilities to resolve CMS Secondary Payer Act (MSP) claim issues. “In accordance with the Division's memorandum of March 28, 2016, if conditional payments have been made, it is best left to the parties to decide how they will resolve their remaining Medicare issues. The parties are strongly encouraged to reach specific agreements delineating how their remaining Medicare issues 'Will be resolved, thus protecting the injured Medicare beneficiaries, employers, and workers' compensation insurers, as well as honoring the rights and interests of Medicare. If an agreement is reached, it shall be placed on the record at the time of settlement and memorialized in the settlement Order. The petitioners' attorneys shall also inform their clients, on the record, of the Centers for Medicare & Medicaid Services' requirements and their compliance options."

“Please note that if the parties settle by way of N.J.S.A. 34:15-20, N.J. Division of Workers' Compensation shall not retain jurisdiction of any remaining CMS issues, as a Section 20 settlement has the effect of a dismissal with prejudice, being final as to all rights and benefits of the petitioner and is a complete and absolute surrender and release of all rights arising out of the specific workers' compensation claim petition.

“The Social Security Act specifically precludes Medicare from providing payment for services to the extent that the payment in question has been made or can be reasonably expected to be made promptly under the Workers' Compensation Act. 42 U.S.C.A. § 1395y(b)(2)(A)(ii). The exclusion of benefits provision in a workers' compensation statute did not operate to reduce an employer's liability for medical bills paid by Medicare since Medicare had subrogation rights against the injured employee for amounts recovered in a lawsuit against the employer. Kimberly–Clark Corp. v. Golden, 486 So.2d 435 (Ala.Civ.App.1986). A workers' compensation claimant brought a suit against a workers' compensation insurer and employer for fraud and violation of the Medicare Secondary Payer Act (MSP) in refusing to resume payment of benefits following the exhaustion of the third party recovery. The Federal court permitted the claimant to replead the cause of action for bad faith denial of benefits. Manning v. Utilities Mut. Insurance Co., 254 F.3d 387 (2d Cir.2001).”  Gelman, Jon L, Workers’ Compensation Law, 38 NJPRAC 18.8  (Thomson-Reuters 2018). 

The legislative intent of the US Congress in enacting the MSP Act, effective November 5, 1980, was to eliminate cost shifting of occupationally related medical expenses from the workers’ compensation insurance system to the US taxpayers. CMS has become stricter on enforcement of conditional medical benefits and anticipated future medical costs.

The NJ directive recognizes the statutory responsibility of employers and insurance carriers under Federal law.


Jon L. Gelman of Wayne NJ is the author of NJ Workers’ Compensation Law (West-Thomson-Reuters) and co-author of the national treatise, Modern Workers’ Compensation Law (West-Thomson-Reuters).