New PIP Rules in Effect After New Jersey Court Denies Stay Request

New Jersey’s Superior Court has denied a medical group’s request for a stay of the new motor vehicle personal injury protection (PIP) regulations. The court’s decision means the state’s insurance department can implement the new PIP regulations beginning Friday, Jan. 4., as had been originally scheduled.

Back in November, the New Jersey Association of Ambulatory Surgery Centers filed for an injunction request for a stay of the new regulations in the Superior Court, Appellate Division. Previously, the state’s Department of Banking and Insurance had denied the group’s request for a stay of the regulations.

These new regulations were first proposed by the state’s insurance 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 the 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.” New Jersey’s insurance regulators are required to evaluate the state’s PIP system every two years.

The department said that in recent years, increases in premiums requested by auto insurers were connected to PIP premiums rising. The department said additional regulations were needed to help create a downward pressure on auto insurance rates to try to rein in those PIP premiums somewhat, to close the loopholes, and to provide some PIP premium relief.

New Jersey offers one of the most generous PIP coverages in the country. 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.

The new regulations include adding more procedures to the physicians’ fee schedule in a bid to slow rising auto insurance costs. The last time an additional fee schedule was implemented was two years ago. The rules aim to close loopholes that are being exploited by some providers, and cap PIP expenses and control the rising medical costs that insurers pay for auto accident victims.

But 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.

Additionally, under new regulations, claims that are less than $1,000 will now not receive an in-person hearing. Also, under the new rules, arbitration panels will be asked to ensure that lawyers’ fees are commensurate with the amount of the arbitration award and guard against outsized attorney fees.