In N.J., Opponents File Appeal to Stop New PIP Regulations

In New Jersey, some medical provider groups and trial lawyers are continuing to mount a legal challenge to new motor vehicle personal injury protection (PIP) regulations.

On Jan. 3, New Jersey’s Superior Court denied an earlier stay request by the N.J. Association of Ambulatory Surgery Centers, but the appeal is now moving forward even as the state’s Department of Banking and Insurance implements new regulations.

The appeal is currently scheduled to be heard in March.

The new rules were proposed by state regulators some 17 months ago. Since then, the proposals have gone through two rounds of public comment periods and regulators have made a number of changes to their original proposals – including deleting over 100 price codes for spinal and neurosurgical procedures from the proposed fee schedules.

Marshall McKnight, spokesperson for the Department of Banking and Insurance, told Insurance Journal, “This is all about exerting downward pressure on auto insurance premiums for New Jersey drivers, by giving them more medial service access to the same premium dollars.”

Critics say the new physicians’ fee schedule limits the types of procedures that could be reimbursed at ambulatory surgery centers (ASCs), and sets hospital outpatient surgical facility fees higher than ASC fees for certain services.

The new regulations nearly double the number of Current Procedural Terminology (CPT) codes that are on the the physicians’ fee schedule – adding about 1,000 new codes for a total of about 2,000 – in an attempt to slow rising auto insurance costs. New Jersey’s insurance regulators are required to evaluate the state’s PIP system every two years.

New Jersey offers one of the most generous PIP coverages in the nation. New Jersey drivers can buy as much as $250,000 of PIP benefits, the second highest in the country behind Michigan which has unlimited PIP.

“In general, we think it’s a small step in the right direction. We think more needs to be done to control PIP costs. They are the biggest cost driver for auto insurance right now in New Jersey,” Chuck Leitgeb, vice president at the Insurance Council of New Jersey, told Insurance Journal.

Commenting on new regulations, Leitgeb said there was an increase in most of the CPT codes that were on the fee schedule: “We think it’s a very generous fee schedule. We don’t think it will do a great deal to hold the cost on PIP.”

But he said it does give the industry more cost certainty, by putting more codes on the fee schedule. “It does help to reduce arbitration cases,” Leitgeb said.

The more CPT codes that regulators put on the fee schedule, the less opportunity there is for disputes between doctors and companies regarding the treatments because those codes will be on the fee schedule and there is a cost certainty. They don’t have to go through the arbitration process, he said.

In the future, more will have to be done to address the PIP problem, Leitgeb said.

“We are trying to push an anti-fraud bill, which would take aim at PIP fraud,” he said.

“And if we were to adopt a tighter medical fee schedule with more codes on there, that holds the line a little bit more on costs, I think it will be better for the industry as a whole. These regulations are a small step. There is a lot more to be done.”