November 25, 2009
/24-7PressRelease/ --
2007 PIP Fee Schedule Finally Approved by New Jersey Court
Article provided by The Law Offices of Thomas J. Mallon
Visit us at
www.tmallonlaw.com
On August 10, 2009, a New Jersey appellate court finally approved the measures adopted by the Department of Banking and Insurance (DOBI) back in 2007, putting an end to the debate over whether the new personal injury protection (PIP) fee schedule would ever go into effect across the state.
The PIP fee schedule sets the reimbursement rates for medical care provided after a person has been involved in a car accident. Since New Jersey is a no-fault insurance state, an individual can seek to have any medical care provided after a car accident paid by his or her insurance carrier under the PIP portion of the policy.
Under the prompt payment rule (NJSA 39:6A-5), insurance companies generally have 60 days to pay for a policyholder's medical expenses after they have received written notice that an accident occurred and medical services have been provided. If the insurance company does not pay for the medical services in this time frame, they are in violation and interest begins to accrue on the unpaid amount.
The reimbursement amount set in the PIP fee schedule is non-negotiable, meaning that medical care providers do not have the option of disagreeing with the amount or disputing it through the court system. This, however, is not true with procedures not covered by the PIP fee schedule. The previous PIP fee schedule only covered 92 different medical procedures - as compared with the 1400 procedures covered by the new one.
The limited number of services covered by the old fee schedule led to a high rate of reimbursement disputes between the insurance companies and health care providers.
For services not covered by the schedule, auto insurers are required to pay the "usual, customary and reasonable" cost of the medical services. However, what is usual, customary and reasonable is not defined under state law. With no legal definition, it has been left to the insurance companies and medical community to fight it out. More often than not, this has resulted in the two sides facing off in court in expensive, protracted litigation. Consequently, these litigation expenses have been passed off on New Jersey motorists, who pay the most expensive car insurance rates in the country.
In 2007, DOBI decided to take action to offer relief by expanding the current PIP fee schedule. The Department hoped that by increasing the number of procedures covered by the schedule, it would decrease the number of fee disputes handled by the courts, thereby decreasing the overall cost of auto insurance in New Jersey.
Not surprisingly, those who would lose the most by increasing the number of set rates for medical services fought back against the changes in court. Hospitals, physicians and others in the medical community argued that the proposed changes to the fee schedule would deny them adequate compensation for their services.
As a result of the organized resistance put up by the medical community, the 2007 changes to the PIP fee schedule were put on hold until a court could finish reviewing them and determining whether they were fair. It took nearly two years for the courts to rule that DOBI had been thorough in its research and made "considered and informed" judgments when creating the new fee schedule.
The court, however, did not make its ruling retroactive, meaning that the new fee schedule only applies to medical services provided on or after August 10, 2009. Any services that occurred before this date are still paid in accordance with the 2001 fee schedule.
The new PIP fee schedule now covers the following types of medical services:
-Physician services
-Dental services
-Home care services
-Ambulance services
-Durable medical equipment (like catheters, crutches and other medical supplies)
-Ambulatory surgical center services
Even though it is good news that the PIP fee schedule is now out of the courts and into effect, it still may be awhile before New Jersey drivers see a meaningful decrease in car insurance premiums.
Conclusion
After being in a car accident and suffering serious injury, the last thing you want to worry about is trying to collect the money you are owed under your insurance policy. If you are having problems getting your insurance company to pay out your claim or even return your calls, contact an experienced attorney. Your insurance company owes you important duties, including the duty to act in good faith in settling your claim. For more information on your legal options following an accident, speak with a knowledgeable attorney today.
Article provided by The Law Offices of Thomas J. Mallon
Visit us at
www.tmallonlaw.com---
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