Managing Costs and Outcomes for Workplace Accidents

Workers’ compensation can be a complex topic. While it’s in place to protect workers injured in workplace accidents, it’s not perfect. There are so many elements involved and it’s important that companies and injured employees know what to expect.

When compared to other states, New Jersey’s workers’ compensation medical costs are higher than average. Studies show that the medical payments per claim in New Jersey are much higher than in other states. This highlights the need for cost containment strategies to align the state’s expenses with national benchmarks.

So what is causing these high costs? In 2024, New Jersey’s workers’ compensation system was influenced by several key medical trends. Here’s a look at these trends in more detail.

Rising Medical Costs

Costs are always rising, but the problem is especially prevalent in New Jersey. There are several factors causing medical expenses to rise in the state: 

• No medical fee schedule. New Jersey lacks a standardized medical fee schedule for workers’ compensation, unlike most other states. Instead, it uses a “usual and customary” charge system. This has led to New Jersey having some of the highest workers’ compensation premiums across the country.
• Medical inflation. Medical care costs have outpaced general inflation. This is due to labor shortages and higher wages for healthcare workers, which increases the costs.
• Surgical costs. New Jersey reports some of the highest surgical costs in the country. It averages 115% more than other states. This is primarily due to the lack of fee schedules.
• Medical claim petitions. Many providers have a practice of accepting payments and then filing petitions for additional compensation. This leads to increased payouts and administrative burdens.

 Legislative Changes

Legislative changes in New Jersey have increased workers’ compensation costs for employers/insurers. In August 2024, the attorney fee cap in workers’ compensation cases was increased from 20% to 25%.  However, the Division of Workers’ Compensation typically requires employers and insurers to cover 60% of the injured workers’ attorney fees. With the new 25% cap, costs for employers and insurers have increased.

Also, in response to increased medical costs, New Jersey has implemented legislative measures aimed at regulating expenses within the workers’ compensation system.  One notable change was increasing the maximum allowable fee for evaluating physicians from $600 to $1,000.

Evolving Treatment Protocols

The use of advanced medical treatments and technologies has also influenced workers’ compensation medical trends in New Jersey. The challenge lies in balancing the adoption of these advanced treatments with the need to manage expenses. The increase in workplace-related mental injuries has prompted discussions about appropriate treatment protocols. Addressing mental health issues requires counseling, therapy, and other comprehensive approaches, which can contribute to higher overall medical costs.

 Contact a New Jersey Personal Injury Lawyer Today  

While workers’ compensation is a no-fault type of insurance, victims do not always get the compensation they need. The system is facing challenges due to high costs.

A Morristown workers’ compensation attorney from The Law Offices of Michael P. Burakoff can help you recover damages for a workplace accident. To schedule a consultation, fill out the online form or call (973) 455-1567.