NJ PIP Regulations Upheld by New Jersey Court of Appeals
On march 31st, the New Jersey Appellate Division ruled against a coalition of healthcare providers and representatives of injured plaintiffs who had been challenging a set of regulations issued by the New Jersey Department of Banking and Insurance (DOBI) in 2012. The challenge to the regulations complained that DOBI exceeded its authority in issuing the regulations, but getting a court to rule that a state agency abused its discretion is a heavy burden to meet, and the court refused to do so here.
When the regulations were established in 2012, they were said to have the dual purpose of “reining in” the amounts insurance carriers would have to pay to doctors for providing treatment and also bringing down the cost of personal injury protection (PIP) insurance premiums drivers are required to pay. One controversial aspect of the regulations is providing for regional rates and a fee schedule based on how much the carrier pays rather than what the provider actually charges. Under the regulations, rates are based on the prevailing fees of 75% of the practitioners in a given region, with PIP reimbursement rates set based on how much the carrier pays and not how much was actually billed.
There have been at least six challenges to various PIP regulations issued by DOBI since 2007; all the challenges thus far have been rejected, and the court in New Jersey Healthcare Coalition v. New Jersey Department of Banking and Insurance did not stray from that course in affirming the Department’s adoption of the 2012 regulations. As Judge Reisner stated in her opinion for the court, “From the beginning, we have made clear that it is not our role to second-guess the Department’s policy choices concerning the implementation of the legislative scheme aimed at reducing insurance costs while expediting medical treatment for accident victims. We find no basis to do so here, and we affirm the Department’s adoption of the challenged regulations.”
