The New Jersey state government is considering major changes to rules governing the personal injury protection component - commonly referred to as PIP coverage - in state residents' automobile insurance policies.
PIP coverage pays for medical bills which arise out of injuries sustained in a motor vehicle accident, regardless of who was at fault. Under New Jersey law, every driver must carry a minimum of $15,000 in PIP coverage. However, most choose to carry the maximum coverage limits of $250,000. Regardless of the coverage limits chosen, all insured drivers are entitled to $250,000 in PIP coverage if they experience very severe injuries such as significant brain injury, spinal cord injury or disfigurement.
Proposed Changes Aimed to Help Insurance Companies
New Jersey's $250,000 maximum coverage limit is the second highest in the nation. Unfortunately, although this generous coverage is often a financial lifesaver for the injured, it is being blamed for declining insurance company profits - insurers claim that medical providers are abusing the system by overcharging and overtreating. As a result, New Jersey is one of the least profitable states in the country for auto insurance companies.
Under the proposed changes, all outpatient care reimbursement rates would be capped to match the fee schedule for same-day surgery centers, regardless of where the procedure is performed. Further, doctors would only have five days to appeal an insurance company's denial of a claim.
In what is perhaps the most drastic proposed change, patients who have been denied treatment would be required to plead their case before an internal review panel before they would be allowed to pursue arbitration.
What Do These Changes Mean for the Injured?
A recent committee hearing at the New Jersey legislature clearly demonstrated that what these changes mean for accident victims depends principally on who you ask.
Representatives from insurance companies say the changes will lower premiums and weed out unscrupulous medical professionals
However, New Jersey personal injury lawyers and accident victims' advocates tell a different story. They say that it is already difficult to get insurance companies to pay for treatment, and worry that the changes will add further delays to an already laborious process. They are also upset that the changes do nothing to address the insurance industry abuses that deny injured patients the care they need. Putting hurdles in front of arbitration - which is often the only way accident victims can get their insurers to pay for care - will only make the problems worse.
New Jersey's banking and insurance commissioner, Thomas Considine, has final authority over whether or how to change the rules. The public comment period on the changes closed in mid-October, and the commissioner's decision is expected in the coming months.
