NJ CAR INSURANCE-
NJ CAR INSURANCE Consumers will also have new choices
with regard to their personal injury protection or PIP
benefits coverage. New Jersey law previously mandated
that all policyholders purchase $250,000 of PIP
benefits. PIP pays for injuries to you and your
passengers, no matter who is at fault in an accident.
- Under the AICRA reform law,
individuals purchasing a 'standard' policy have the option
of choosing various levels of coverage, $250,000, $150,000,
$75,000, $50,000 or $15,000. All the options include
catastrophic-type injury coverage of up to $250,000. If you
do not choose among these options, you will automatically be
given the standard $250,000
- The reform law also encouraged
insurance companies to develop various deductible,
co-payment and pre-certification plans to combat fraud and
abuse of auto insurance medical benefits. Consumers should
carefully review these plans.
Insurance PIP Overview
"PIP" is an acronym for the PERSONAL
INJURY PROTECTION BENEFITS contained within an
automobile insurance policy.
With the enactment of the AUTOMOBILE INSURANCE
COST REDUCTION ACT ("AICRA") , NJ medical
providers were imposed with a complete new set of
rules to follow in order to obtain compensation for
reasonable and necessary medical expenses rendered
to a covered person when the medical expenses were
causally related to a motor vehicle accident.
Failure to comply completely with the new set of
rules would result in the reduction and/or
elimination of compensation due the medical provider
from the respective automobile insurance carrier.
Furthermore, failure to comply completely with the
new set of rules would also result in the medical
provider being prohibited from collecting the
compensation due directly from the patient.
Given the above, it is obvious that the medical
provider and the supporting office staff must have
complete familiarity with the new set of rules and
terminology ushered in with AICRA. If this
complete familiarity is accomplished, the medical
provider will still be able to enjoy the financial
rewards of a successful practice with PIP.
However, if the medical provider and the supporting
office staff fails to become completely familiar
with the new set of rules and terminology ushered in
with AICRA, financial detriments will certainly
Prior to AICRA, the treating medical provider
basically controlled the treatment plan of the
patient and the diagnostic testing utilized in the
furtherance of the treatment plan of the patient.
However, AICRA has now delegated the COMMISSIONER of
the DEPARTMENT OF BANKING AND INSURANCE ("DOBI") to
be an important factor in the aforementioned
treatment plan of the patient and the diagnostic
testing utilized in the furthermore of the treatment
plan of the patient. This was accomplished by
the passing of regulations by NJDOBI
that established and/or continued the following:
APPLICABILITY OF PIP MEDICAL BENEFITS;
STATUTORY EXCLUSIONS OF PIP MEDICAL BENEFITS;
BASIC POLICY PIP MEDICAL BENEFITS;
STANDARD POLICY PIP MEDICAL BENEFITS;
PRIMARY HEALTH INSURANCE OPTION;
DEDUCTIBLE AND CO-PAYMENT REQUIREMENTS;
PIP FEE SCHEDULE;
MEDICAL PROTOCOLS (CARE PATHS);
DIAGNOSTIC TESTING DETERMINED TO YIELD NO DATA OF
ANY SIGNIFICANT VALUE IN THE DEVELOPMENT, EVALUATION AND
IMPLEMENTATION OF AN APPROPRIATE PLAN OF TREATMENT FOR
INJURIES SUSTAINED IN MOTOR VEHICLE ACCIDENTS;
DIAGNOSTIC TESTING DETERMINED TO HAVE VALUE IN
THE EVALUATION OF INJURIES, THE DIAGNOSIS AND
DEVELOPMENT OF A TREATMENT PLAN FOR PERSONS INJURED IN
MOTOR VEHICLE ACCIDENTS;
TWENTY ONE DAY NOTIFICATION UPON COMMENCEMENT OF
DECISION POINT REVIEW PLAN;
ADDITIONAL CO-PAYMENT PENALTY;
TEN DAY PERIOD;
ADDITIONAL CO-PAYMENT PENALTY;
COMPENSATION FOR DURABLE MEDICAL GOODS;
PIP DISPUTE RESOLUTION (FORMERLY "PIP
DISPUTE RESOLUTION PROFESSIONAL ("DRP" AND
FORMERLY "PIP ARBITRATOR");
ASSIGNMENT OF BENEFITS;
MEDICAL REVIEW ORGANIZATION REVIEW;
APPLICATION FOR DISMISSAL and
APPLICABILITY OF PIP MEDICAL BENEFITS
A person is eligible for PIP medical benefits pursuant
to N.J.S. 39:6A-4 if that person sustains "bodily injury
as a result of an accident while occupying, entering
into, alighting from or using an automobile, or as a
pedestrian, caused by an automobile or by an object
propelled by or from an automobile, to other persons
sustaining bodily injury while occupying, entering into,
alighting from or using the automobile of the named
insured, with permission of the named insured, and to
pedestrians sustaining bodily injury caused by the named
insured's automobile or struck by an automobile or
struck by an object propelled by or from that
As before AICRA, the payment of PIP medical benefits is
made without regard to negligence, liability or fault
and covers the named insured and family members that
reside with the named insured. If the person is
not a named insured and does not reside with a family
member that is a named insured, then the coverage
follows the automobile. As also before AICRA, there must
be an automobile involved as put forth in the language
of N.J.S. 39:6A-4 above for applicability of PIP medical
benefits. TAXICABS, BUSES and MOTORCYCLES are the
prime examples of motorized vehicles that are not
STATUTORY EXCLUSIONS OF PIP MEDICAL BENEFITS
Once the applicability of PIP medical benefits has been
established, there are still certain statutory
exclusions that can eliminate PIP medical benefits due
to the actions of the person. These statutory
exclusions are contained in N.J.S. 39:6A-7 and are
COMMITTING A CRIMINAL ACT OR ATTEMPTING TO AVOID
LAWFUL APPREHENSION BY A POLICE OFFICER; (N.J.S.
COMMITTING AN INTENTIONAL ACT TO CAUSE INJURY OR
DAMAGE TO ONESELF OR OTHERS;
OWNING AN UNINSURED MOTOR VEHICLE;
- UTILIZING A
MOTOR VEHICLE WITHOUT OWNER'S CONSENT;
NJ AUTOMOBILE-BASIC POLICY PIP MEDICAL
Assuming that there is no statutory exclusion of PIP medical
benefits as outlined above, a new limitation of PIP medical
benefits was ushered in under AICRA depending upon the type
of automobile policy that is chosen by the insured.
Specifically, if an insured elected the BASIC POLICY, the
PIP medical benefits are limited to $15,000.00. (N.J.A.C.11:
The only exception would be additional monetary coverage not
to exceed $250,000.00 for "all medically necessary treatment
of permanent or significant brain injury, spinal cord injury
or disfigurement or medically necessary treatment of other
permanent or significant injuries rendered at a trauma
center or acute care hospital immediately following the
accident and until the patient is stable, no longer
requiring critical care and can be safely discharged or
transferred to another facility in the judgment of the
attending physician. (N.J.A.C. 11:3-4(a)(1)).
STANDARD POLICY PIP MEDICAL
If the BASIC POLICY was not elected, then the monetary
coverage that was applicable prior to AICRA remains in
effect and the insured has what is now known as the STANDARD
POLICY. Specifically, this policy provides monetary
coverage for PIP medical benefits to an amount not to exceed
$250,000.00. (N.J.S. 39:6A-4(a)).
Notwithstanding the aforementioned monetary coverage limits
of PIP medical benefits under the BASIC or STANDARD POLICY,
the type of treatment and type of diagnostic testing
utilized in the furtherance of the treatment plan for the
patient have been altered under AICRA. This is further
described later on in this overview.
PRIMARY HEALTH INSURANCE OPTION
As before AICRA, a PRIMARY HEALTH INSURANCE OPTION is made
available to insured's that would make PIP medical benefits
under an automobile insurance policy a secondary coverage
for a reduced premium. (N.J.S. 39: 6A-4.3(d)).
However, under AICRA, the PRIMARY HEALTH INSURANCE OPTION
applies only to a STANDARD POLICY. It is specifically
prohibited as a coverage option under a BASIC POLICY.
However, if a named insured does not actually have health
insurance at the time of the accident, then the automobile
insurance carrier automatically becomes the primary.
But, an additional $750.00 deductible is applied to the
medical benefit payments. (N.J.S. 39:6A-4.3(f)).
In addition to the above, it must be noted that the election
of a PRIMARY HEALTH INSURANCE OPTION applies only to a named
insured and residing family members. As such, an
individual who is not a named insured and does not reside
with a family member who is a named insured automatically
but is properly applying for PIP medical benefits under the
policy has the automobile insurance carrier as primary.
DEDUCTIBLE AND CO-PAYMENT
Prior to AICRA, a standard $250.00 deductible requirement
and 20% co-payment requirement on the next $4750.00 in
medical expenses was applied. However, under AICRA,
deductibles can now be offered to insured's under a BASIC
POLICY or a STANDARD POLICY in amounts of $500.00, $1000.00,
$2000.00 and $2500.00. (N.J.A.C. 11:3-4.4(b)). The
only exception is for a private passenger automobile insured
under a commercial automobile insurance policy where no
natural person is a named insured. In that situation,
only the minimum $250.00 deductible can be offered.
(N.J.A.C. 11:3-4.4(e)). Furthermore, the elected
deductible requirement applies on a per accident basis, not
a per person basis. (N.J.A.C. 11:3-4.4(c)).
Notwithstanding the aforementioned, it must be noted that
the elected deductible applies only to a named insured and
residing family members. As such, an individual who is
not a named insured and does not reside with a family member
who is a named insured automatically but is properly
applying for PIP medical benefits under the policy has the
minimum $250.00 deductible. (N.J.A.C. 11:3-4.4(b)(1)).
MEDICAL PROTOCOLS (CARE PATHS)
One of the most significant changes with the enactment of
AICRA is the established by DOBI of MEDICAL PROTOCOLS (CARE
PATHS) for the treatment of identified injuries, including
the utilization of diagnostic tests. Specifically, the
treatment of accidental injury to the spine and neck and set
forth in N.J.A.C. 11:3-4.6.
In the aforementioned regulation, there were SIX CARE PATHS
CARE PATH ONE
(CERVICAL SPINE: SOFT TISSUE INJURY);
CARE PATH TWO
(CERVICAL SPINE: HERNIATED DISC/RADICULOPATHY);
CARE PATH THREE
(THORACIC SPINE: SOFT TISSUE INJURY);
CARE PATH FOUR
(THORACIC SPINE: HERNIATED DISC/RADICULOPATHY);
CARE PATH FIVE
(LUMBAR-SACRAL SPINE: SOFT TISSUE INJURY); and
CARE PATH SIX
(LUMBAR-SACRAL SPINE: HERNIATED DISC/RADIUCULOPATHY).
As can be easily seen by the above list, the CARE PATHS
addressed three anatomical areas of the spine.
Specially, the CERVICAL SPINE, the THORACIC SPINE and the
Thereafter, each of the aforementioned three anatomical
areas was subdivided depending upon the injuries present.
Specifically, SOFT TISSUE INJURY and HERNIATED
Each of the CARE PATHS is attached hereto and a brief
perusal of these documents show the attempt by DOBI to make
the treatment of accidental injury to the spine and back,
including diagnostic testing, into a flow chart.
Furthermore, where the CARE PATH indicates a DECISION POINT
either by a HEXAGON or by reference in the text to a second
opinion, referral for a second independent consultative
medical opinion, development of a treatment plan or
mandatory CASE MANAGEMENT, a DECISION POINT REVIEW is
required. (N.J.A.C. 11:3-4.6(b)). The
aforementioned is further described later in this overview.
In addition, it must be noted that each CARE PATH
specifically notes the following:
"NOTE: These CARE PATHS identify typical courses of
intervention. There may be patients who require more
or less treatment. However, cases that deviate from
the CARE PATHS may be subject to more careful scrutiny and
may require documentation of the special circumstances.
Treatments must be based on patient need and professional
judgment. Deviations may be justified by individual
circumstances, such as pre-existing conditions and/or other
The aforementioned NOTE is extremely important to the
medical provider and the supporting office staff since
treatments that vary from the CARE PATHS shall be
reimbursable ONLY when warranted by reason of MEDICAL
NECESSITY. (N.J.A.C. 11:3-4.6(c)). Furthermore,
N.J.A.C. 11:3-4.2 defines MEDICAL NECESSITY as:
"The medical treatment or diagnostic test is consistent with
the clinically supported symptoms, diagnosis or indications
of the injured person, and:
The treatment is the most appropriate level of
service that is in accordance with the standards of good
practice and standard professional treatment protocols
including the CARE PATHS…
The treatment of the injury is not primarily for the
convenience of the injured person or provider; and
Does not include unnecessary testing or treatment."
Given the above, it is imperative that the
medical provider and the supporting office staff carefully
and meticulously document the symptoms present during each
visit and the treatment that was rendered. In
addition, the aforementioned documentation MUST be clearly
legible and clearly understandable to non-medical personnel.
The practical reason for the aforementioned assertion is
that any dispute over compensation of the medical services
rendered will not be finally adjudicated by medical
personnel but by a DISPUTE RESOLUTION PROFESSIONAL or a
JUDGE, either of whom is generally NOT a trained medical
person. The procedure for final adjudication will be
further discussed later in this overview.
In addition, each CARE PATH specifies the applicable
DIAGNOSTIC TESTING DETERMINED TO YIELD NO
DATA OF ANY SIGNIFICANT VALUE IN THE DEVELOPMENT, EVALUATION
AND IMPLEMENTATION OF AN APPROPRIATE PLAN OF TREATMENT FOR
INJURIES SUSTAINED IN MOTOR VEHICLE ACCIDENTS
Pursuant to N.J.A.C. 11:3-4.5 (a), and another of the major
changes ushered in with AICRA, was that the following
diagnostic tests shall not be compensated for by PIP medical
benefits since they have been determined to yield no data of
any significant value in the development, evaluation and
implementation of an appropriate plan of treatment for
injuries sustained in motor vehicle accidents:
SPINAL DIAGNOSTIC ULTRASOUND;
SURROGATE ARM MENTORING;
SURFACE ELECTROMYOGRAPHY (SURFACE EMG);
MANDIBULAR TRACKING AND STIMULATION.
In addition to the above, and pursuant to N.J.A.C.
11:3-4.5(f), the following diagnostic tests shall not be
compensated for by PIP medical benefits since they have been
identified by the NEW JERSEY STATE BOARD OF DENTISTRY as
failing to yield data of sufficient volume to alter or
influence the diagnosis or treatment plan employed to treat
VIDEO FLUOROSCOPY; and
DIAGNOSTIC TESTING DETERMINED TO HAVE
VALUE IN THE EVALUATION OF INJURIES, THE DIAGNOSIS AND
DEVELOPMENT OF A TREATMENT PLAN FOR PERSONS INJURED IN MOTOR
Pursuant to N.J.A.C. 11:3-4.5 (b), and another of the major
changes ushered in with AICRA, was that the following
diagnostic tests shall be compensated for by PIP medical
benefits since they have been determined to have value in
the evaluation of injuries, the diagnosis and development of
a treatment plan for persons injured in motor vehicle
NEEDLE ELECTROMYOGRAPHY (NEEDLE EMG) when used in
the evaluation and diagnosis of neuropathies and
radicular syndrome where clinically supported findings
reveal a loss of sensation, numbness or tingling.
A NEEDLE EMG is not indicated in the evaluation of TMJ/D
and is contraindicated in the presence of infection on
the skin or cellulitis. This test should not
normally be performed within 14 days of the traumatic
event and should not be repeated where initial results
are negative. Only one follow up exam is
SOMA SENSORY EVOKED POTENTIAL (SSEP), VISUAL
EVOKED POTENTIAL (VEP), BRAIN AUDIO EVOKED POTENTIAL
(BAEP), or BRAIN EVOKED POTENTIAL (BEP), NERVE
CONDUCTION VELOCITY (NCV) and H-REFLEX STUDY are
reimbursable when used to evaluate neuropathies and/or
signs of atrophy, but not within 21 days following the
ELECTROENCEPHALOGRAM (EEG) when used to evaluate
head injuries, where there are clinically supported
findings of an altered level of sensorium and/or a
suspicion of seizure disorder. This test, if
indicated by clinically
supported findings, can be administered immediately
following the insured event. When medically
necessary, repeat testing is not normally conducted more
than four times per year.
VIDEO FLUOROSCOPY only when used in the
evaluation of hypo mobility syndrome and wrist/carpal
hypo mobility, where there are clinically supported
findings of no range or aberrant range of motion or
dissymmetry of facets exist. This test should not
be performed within three months following the insured
event and follow up tests are not normally appropriate.
MAGNETIC RESONANCE IMAGING (MRI) when used in
accordance with the guidelines contained in the AMERICAN
COLLEGE OF RADIOLOGY, APPROPRIATENESS CRITERIA to
evaluate injuries in numerous parts of the body,
particularly the assessment of nerve root compression
and/or motor loss. MRI is not normally performed
within five days of the insured event. However,
clinically supported indication of neurological gross
motor deficits, incontinence or acute nerve root
compression with neurological symptoms may justify MRI
testing during the acute phase immediately post injury.
. In the case of TMJ/D where there are clinical signs of
internal derangement such as nonself-induced clicking,
deviation, limited opening, and pain with a history of
trauma to the lower jaw, an MRI is allowable to show
displacement of the condylar disc, such procedure
following a pantographic or Tran cranial x-ray and six
or eight weeks of conservative treatment. This TMJ/D
diagnostic test may be repeated post surgery and/or post
COMPUTER ASSISTED TOMOGRAPHY STUDIES (CT,
CAT Scan) when used to evaluate injuries in numerous
aspects of the body. With the exception of
suspected brain injuries, CAT SCAN is not normally
administered immediately post injury, but may become
appropriate within five days of the insured event.
Repeat CAT SCANS should not be undertaken unless there
is clinically supported indication of an adverse change
in the patient's condition. . In the case of TMJ/D where
there are clinical signs of degenerative joint disease
as a result of traumatic injury of the temporomandibular
joint, tomograms may not be performed sooner than 12
months following traumatic injury.
DYNATRON/CYBER STATION/CYBEX when used to
evaluate muscle deterioration or atrophy. These
tests should not be performed within 21 days of the
insured event and should not be repeated if results are
negative. Repeat tests are not appropriate at less
than six months intervals.
SONOGRAMS/ULTRASOUND when used in the acute phase
to evaluate the abdomen and pelvis for intra-abdominal
bleeding. These tests are not normally used to
assess joints (knee and elbow) because other tests are
more appropriate. Where MRI is performed,
SONOGRAM/ULTRASOUND are not necessary. However,
echocardiogram is appropriate in the evaluation of
possible cardiac injuries when clinically supported.
THERMOGRAPH/THERMOGRAMS only when used to
evaluate pain associated with reflex sympathetic
dystrophy ("RSD"), in a controlled setting by a
physician experienced in such use and properly trained.
BRAIN MAPPING when done in conjunction with
appropriate neurodiagnostic testing.
It must be noted that the terms "normal,"
"normally," "appropriate" and "indicated" as used above are
intended to recognize that no single rule can replace the
good faith educated judgment of a health care provider.
In addition, the utilization of the aforementioned terms is
intended to indicate some flexibility and avoid rigidity in
the application of these rules in the DECISION POINT REVIEW.
This is further described later in this overview.
TWENTY ONE DAY NOTIFICATION UPON COMMENCEMENT
Following the commencement of treatment, the
medical provider and the supporting staff MUST advise the
responsible PIP insurance carrier within twenty ones days of
the commencement of treatment. (N.J.A.C. 11:3-25.4)).
There are certain exceptions to the aforementioned, however,
the exceptions generally pertain to SECONDARY MEDICAL
PROVIDERS as those who only perform a medical service or
supply a care or durable medical good following receipt of a
prescription from the treating medical provider.
(N.J.A.C. 11:3-25.5(d)(1)) or if the medical condition of
the injured person made it impossible to comply with the
notice requirement ((N.J.A.C. 11:3-25.5(d)(3)).
The notification to the PIP insurance carrier can
be done by utilization of the NOTIFICATION OF COMMENCEMENT
OF MEDICAL TREATMENT FORM approved by DOBI (N.J.A.C.
11:3-25.4(a)(1)) or by a bill from the medical provider that
includes the following information:
Name, address and telephone number of the medical
Name and address of the patient;
Name and address of the insured (if different
than the patient);
Name and address of the insurance company;
Policy Number of the insured; and
Date of first treatment.
(N.J.A.C. 11:3-25.4 (a)(2)).
Furthermore, the aforementioned notification can
be done by mail, facsimile or e-mail to the PIP insurance
company. (N.J.A.C. 11:3-25.4 (c)). However, if
mail is utilized, it MUST be done by certified mail, return
receipt requested to avoid a non-receipt claim.
NOTE: The addresses and facsimile numbers of all
PIP insurance carriers can be located on the DOBI website.
Failure to comply with the aforementioned twenty
one day notice can result in the following reductions
pursuant to N.J.A.C. 11:3-25.3(b):
10% reduction for submission 22 to 30 days late;
25% reduction for submission 31 to 60 days late;
50% reduction for submission 61 to 120 days late;
75% reduction for submission 121 to 160 days
100% reduction for submission over 161 days late.
Furthermore, any applicable reduction can not
be retrieved directly from the patient (N.J.A.C. 11:3-25.7),
however, the PIP insurance carrier MUST respond to the
treating medical provider within fourteen days of receipt of
the notification. (N.J.A.C. 11:3-25.3(f)).
As can be clearly observed from aforementioned, it is
imperative that complete and accurate information regarding
the insurance information of the patient be obtained
immediately. As such, the medical provider and the
supporting office staff must be fully familiar with the
concepts of PIP medical coverage and the correct PIP
insurance carrier that is responsible for same.
DECISION POINT REVIEW PLAN
(PRIOR NOTICE, DECISION POINTS, ADDITIONAL CO-PAYMENT
PENALTY, TEN DAY PERIOD)
In addition to the promulgation of the MEDICAL PROTOCOLS
(CARE PATHS), the restriction on compensation for certain
diagnostic tests and the determination of validity for
certain diagnostic tests, another of the major changes
ushered in with AICRA was the promulgation of DECISION POINT
REVIEW PLAN and PRE-CERTIFICATION PLAN. The later will
be discussed later in this overview.
Pursuant to N.J.A.C. 11:3-4.7, all insurers must have a
DECISION POINT REVIEW PLAN that provides for a timely review
of the IDENTIFIED INJURIES (CARE PATHS) at DECISION POINTS,
(i.e.. the previously referenced “HEXAGONS” on the CARE
PATHS), and for the approval of the administration of the
DIAGNOSTIC TESTS determined to have value in the evaluation
of injuries, the diagnosis and development of a treatment
plan for persons injured in motor vehicle accidents
Furthermore, the regulation requires that each
DECISION POINT REVIEW PLAN must have:
Procedures for the injured person or his/her
designee to provide PRIOR NOTICE to the insurer or its
designee together with the appropriate CLINICALLY
SUPPORTED findings that additional treatment or the
administration of an approved DIAGNOSTIC TEST are
MEDICALLY NECESSARY. (N.J.A.C. 11:3-4.7 (b)(1));
The prompt review of the notice and supporting
materials submitted by the provider and authorization or
denial of reimbursement for further treatment or tests.
NOTE: There is no specific time period to define “prompt
review” by statute or regulation. However, DOBI
BULLETIN 99-05 asserts that all DECISION POINT REVIEW
PLANS must have the time period that the insurance
carrier must affirmatively deny the treatment or test.
Furthermore, if there is “a failure to deny in
accordance with [the] rule, [then] the treatment or test
may proceed until such time as a denial based on the
determination of a physician is communicated by the
insurer. The [DECISION POINT REVIEW PLAN] should
affirmatively state that if the insurer does not respond
within the stated time frame, the provider may proceed
with the treatment or test. In addition, the
[DECISION POINT REVIEW PLAN] should provide that if a
physical or mental examination is required, treatment
may proceed while the exam is being scheduled, and until
the results are available.”
The scheduling of a physical examination of the
injured person where the notice and the supporting
materials and other medical records are not sufficient
to authorize or deny reimbursement of further treatment
or tests. (N.J.A.C. 11:3-4.7(b)(1)(ii));
The denial of reimbursement for further treatment
or diagnostic test shall be based upon the determination
of a physician. (N.J.A.C. 11:3-4.7(b)(1)(iii)).
Furthermore, the regulation also sets forth the
requirements that the physical examination must meet.
The insurance company must notify the injured
person or his/her designee that a physical examination
is required. (N.J.A.C. 11:3-4.7(b)(2)(I));
The physical examination shall be scheduled
within seven calendar days of the receipt of the demand
for further treatment or tests UNLESS the injured person
agrees to extend the time period. (N.J.A.C.
The physical examination shall be conducted by a
provider in the same discipline as the treating
provider. (N.J.A.C. 11:3-4.7(b)(2)(iii));
The physical examination shall be conducted at a
location reasonably convenient to the injured person.
The insurance company shall notify the injured
person or his/her designee whether reimbursement for
further treatment or tests is authorized as promptly as
possible but in no case later than three days after the
examination. If the examining provider prepares a
written report concerning the examination, the injured
person or his/her designee shall be entitled to a copy
upon request. (N.J.A.C. 11:3-4.7 (b)(2)(vi)).
Furthermore, the regulation also sets forth that
an ADDITIONAL CO-PAYMENT PENALTY, not to exceed fifty
percent (50%) of the eligible charge for medically necessary
treatment, diagnostic tests, surgery, durable medical goods
and non-medical expenses that are incurred after
notification to the insurer was required but before
authorization for continued treatment or diagnostic test is
made when the insurer is NOT notified as required
under the DECISION POINT REVIEW PLAN or if there was a
failure to provide medical records and/or there was a
failure to attend the physical examination. However,
the aforementioned does not apply if the insurer was given
PRIOR NOTICE and failed to act in accordance with the
DECISION POINT REVIEW PLAN. (N.J.A.C. 11:3-4.7(b)(3)).
Furthermore, all DECISION POINT REVIEW PLANS, including any
PRE-CERTIFICATION PLANS (to be described later in this
overview), shall contain provisions for the disclosure of
the procedures and descriptions of:
The financial responsibility of the injured
person, including co-payments and deductibles. (N.J.A.C.
The financial responsibility of the provider for
providing treatment or administering diagnostic tests
without authorization from the insurer. (N.J.A.C.
How authorization for treatment and the
administration of diagnostic tests may be obtained.
Furthermore, no DECISION POINT REVIEW
REQUIREMENTS shall apply within 10 days of the insured
event. (N.J.A.C. 11:3-4.7(e)).
As can be derived from the pertinent regulations noted
above, each insurance company can file its own DECISION
POINT REVIEW PLAN for approval by DOBI. As such, the
requirements can be different for each insurance company,
and as such, the medical provider and the supporting office
staff MUST have a copy of the pertinent DECISION POINT
REVIEW PLAN in order to fully comply with all requirements.
Although the aforementioned will obviously require
additional work to the medical provider and the supporting
office staff, the alternative is the loss of income for
medical services rendered to the patient.
In addition to the above, when a denial is rendered by the
insurance company under the DECISION POINT REVIEW PLAN, any
internal appeal procedure must be followed. As noted
in N.J.A.C. 11:3-4.7 (b)(1)(iii), any denial of
reimbursement for further treatment or tests shall be based
on the determination of a physician. As such, it is
strongly recommended that when the provider discusses the
denial with the insurance company doctor, the following
information is obtained from the insurance company reviewing
FULL NAME AND DEGREE;
STATE OF LICENSE AND LICENSE NUMBER;
EXACT RECORDS IN POSSESSION OF REVIEWER;
IF CURRENT PRACTICE OF REVIEWER ALSO CONSISTS OF
IF SO, THE PERCENTAGE THAT THE CURRENT PRACTICE
OF REVIEWER TREATS PATIENTS.
Also, many insurance carriers are utilizing
servicing agents for their DECISION POINT REVIEW PLANS.
As such, documentation may be required to be submitted to
both the insurance company and the servicing agent in order
to completely protect the interests of the medical provider.
In addition, it must be understood by the medical
provider and the supporting office staff that DECISION POINT
REVIEW and PRE-CERTIFICATION are two completely separate
topics. Furthermore, DECISION POINT REVIEW does not
mean that prior approval must be obtained for future
treatment under the CARE PATHS or for the administration of
the DIAGNOSTIC TESTS listed as having value in the
evaluation of injuries, the diagnosis and development of a
treatment plan for persons injured in motor vehicle
Instead, there will certainly be many situations where the
insurer denies authorization for the future treatment and/or
diagnostic testing. As long full compliance is made
under the DECISION POINT REVIEW PLAN and the medical
provider can document the medical necessity of the treatment
and/or diagnostic testing, compensation can be obtained for
the services rendered in the PIP DISPUTE RESOLUTION process
as described later in this overview.
Pursuant to N.J.A.C. 11:3-4.8,
insurers may file for approval with DOBI for a
PRE-CERTIFICATION PLAN that provides for pre-certification
of certain medical procedures, diagnostic tests, or other
services, non-medical expenses and durable medical equipment
that are not subject to decision point review and that may
be subject to over utilization. (N.J.A.C. 11:3-4.8(a))
However, any PRE-CERTIFICATION PLAN does not replace, or
negate, the requirement to have a DECISION POINT REVIEW PLAN
as described previously. In addition, a
PRE-CERTIFICATION PLAN can not be utilized for treatment
under the CARE PATHS or for utilization of the DIAGNOSTIC
TESTS determined to have value in the evaluation of
injuries, the diagnosis and development of a treatment plan
for persons injured in motor vehicle accidents.
Furthermore, the regulation required that any
PRE-CERTIFICATION PLAN must have:
No restrictions for medical services rendered
within ten days of the insured event. (N.J.A.C.
A licensed medical director must be designated by
the insurer and the licensed medical director must
Any utilization decision to deny reimbursement
for further treatment or testing must be made by a
physician. In the case of treatment provided or
prescribed by a dentist, the decision shall be by a
dentist. (N.J.A.C. 11:3-4.8 (e)(1));
A utilization management decision shall not
retrospectively deny payment for treatment provided when
prior approval has been obtained, unless the approval
was based upon fraudulent information submitted by the
person receiving treatment or the provider. (N.J.A.C.
The utilization management program shall
be available, at a minimum, during normal working hours
to respond to authorization requests. (N.J.A.C. 11:
In addition, PRE-CERTIFICATION PLANS may include
provisions regarding COMPENSATION FOR DURABLE MEDICAL GOODS
and other services. Specifically:
The PRE-CERTIFICATION PLAN may include a
provision that would require the injured person to
obtain the durable medical good directly from the
insurer or its designee. (N.J.A.C. 11:3-4.8(g)); and
The PRE-CERTIFICATION PLAN may include an
additional co-payment, not to exceed fifty percent (50%)
for medically necessary diagnostic tests, treatments,
surgery, durable medical equipment and non-medical
expenses that are incurred without first complying with
the PRE-CERTIFICATION PLAN. (N.J.A.C. 11:3-4.8(h)).
As with the DECISION POINT REVIEW
PLAN, the requirements for each insurance company can be
different. As such, the medical provider and the
supporting office staff MUST have a copy of the pertinent
PRE-CERTIFICATION PLAN in order to fully comply with all
requirements. Although the aforementioned will
obviously require additional work to the medical provider
and the supporting office staff, the alternative is the
imposition of a possible 50% co-payment penalty for the
services rendered that can not be recovered from the
PIP DISPUTE RESOLUTION (FORMERLY “PIP
(DISPUTE RESOLUTION PROFESSION (“DRP” AND FORMERLY
“ARBITRATOR”); ASSIGNMENT OF BENEFITS; MEDICAL REVIEW
ORGANIZATION (“MRO”) APPLICATION FOR DISMISSAL AND
Another major change ushered in with AICRA was the
overhaul of the former PIP ARBITRATION process. The
aforementioned process was previously an extremely effective
tool to compel a PIP insurance carrier to pay for the
reasonable and necessary medical expenses rendered that were
causally related to a motor vehicle accident.
Although the new process appears that it will also be
effective, there are major changes that were enacted by
statute and regulation that if not complied with would
result in the denial of payment for medical services
rendered. This is more fully described below.
Prior to AICRA, the AMERICAN ARBITRATION ASSOCIATION was
designated as the sole adjudicating authority for disputes
being arbitrated over PIP medical benefits. However,
pursuant to N.J.A.C. 11:3-5.3 (a), the COMMISSIONER of DOBI
has the sole authority to designate the organization to
administer the disputes over PIP medical benefits.
Although the AMERICAN ARBITRATION ASSOCIATION remains the
sole adjudicating authority for disputes being arbitrated
over PIP medical benefits, the organization can be replaced
by DOBI once any contractual time period currently in
In addition to the above, there were certain vernacular and
procedural changes made regarding the process. The
most important changes are described below.
In regard to the most important vernacular changes, the
process is no longer called a PIP ARBITRATION.
Instead, the new process is called a PIP DISPUTE RESOLUTION.
In addition, the adjudicator is no longer called an
ARBITRATOR. Instead, the adjudicator is now called a
DISPUTE RESOLUTION PROFESSIONAL (DRP).
In addition to the name change to a DRP, there were certain
qualifications imposed upon an individual to become a DRP
pursuant to N.J.A.C. 11:3-5.5(a). Specifically, a DRP
An attorney licensed to practice in NEW JERSEY
with at least ten years experience in cases involving
personal injury or workers compensation (N.J.A.C.
A former judge of the SUPERIOR COURT or the
WORKERS COMPENSATION COURT, or a former ADMINISTRATIVE
LAW JUDGE (N.J.A.C. 11:3-5.5(a)(2));
Any other person, qualified by education and at
least ten years experience, with sufficient
understanding of automobile insurance claims and
practices, contract law, and judicial or alternative
dispute resolution practices and procedures (N.J.A.C.
The aforementioned requirements have changed the
prior system of the AMERICAN ARBITRATION ASSOCIATION having
a roster of approximately 480 part time ARBITRATORS to a
current system of the AMERICAN ARBITRATION ASSOCIATION
having a roster of approximately 25 full time DRPs.
The result should create a system of having a staff of
adjudicators that are fully familiar with the applicable
laws of PIP and create a system of uniformity in decision
making that was not always present in the prior system.
In addition to the aforementioned vernacular
changes, there have also been major procedural changes.
However, instead of describing only the changes, a full
description of the current process is below.
(NOTE: All references hereafter to a RULE refer to the RULES
OF THE AMERICAN ARBITRATION ASSOCIATION.)
Pursuant to RULE 3 (INITIATION OF ARBITRATION),
the initiation of a PIP DISPUTE RESOLUTION commences with
the filing of a DEMAND FOR ARBITRATION with the AMERICAN
ARBITRATION ASSOCIATION. The filing must be made with
the following documents:
DEMAND FOR ARBITRATION FORM;
ANY APPLICABLE ASSIGNMENT OF BENEFITS FORM; and
ITEMIZED STATEMENT OF BILLS IN DISPUTE.
The entity filing the PIP DISPUTE RESOLUTION is
known as the CLAIMANT and the insurance carrier defending
same is known as the RESPONDENT. However, it must be
noted that the entity filing the PIP DISPUTE RESOLUTION does
not have to be the injured person. Instead, a medical
provider may file the PIP DISPUTE RESOLUTION if a proper
ASSIGNMENT OF BENEFITS FORM has been executed to the medical
provider. This is more fully described below.
Pursuant to N.J.A.C. 11:3-4.9, an insurance
carrier may file for approval with DOBI for “reasonable
procedures for, or restrictions on, the assignment of
personal injury benefits, consistent with the efficient
administration of the coverage.” As such, it is
imperative for a medical provider to obtain any required
ASSIGNMENT OF BENEFITS FORM to be executed by the patient
from the responsible insurance carrier. Of course this
is in addition to the medical provider complying with all
requirements of the TWENTY ONE DAY NOTIFICATION, DECISION
POINT REVIEW PLAN and PRE CERTIFICATION PLAN.
If the aforementioned is complied
with, then the medical provider can become the direct
CLAIMANT against the responsible insurance carrier.
This is not only a preferable position for the medical
provider but a practical position since any dispute over PIP
medical benefits will be directly between the true financial
parties in a dispute over PIP medical benefits, namely, the
medical provider and the insurance carrier.
The forum for adjudication of a PIP DISPUTE
RESOLUTION can be by WRITTEN DOCUMENT SUBMISSION or by ORAL
HEARING pursuant to RULE 4 (CHOOSING ORAL HEARINGS OR
DISPUTE RESOLUTION PROFESSIONAL REVIEW OF DOCUMENTS).
However, if the CLAIMANT elects a WRITTEN DOCUMENT
SUBMISSION forum, the RESPONDENT has the right to demand an
ORAL HEARING instead if the demand to change the forum of
adjudication is done within thirty days of the filing for
the PIP DISPUTE RESOLUTION.
Once the filing has occurred, the AMERICAN
ARBITRATION ASSOCIATION will appoint a DRP to adjudicate the
PIP DISPUTE RESOLUTION pursuant to RULE 8 (APPOINTMENT OF
DISPUTE RESOLUTION PROFESSIONAL). However, a three DRP
panel can also adjudicate the PIP DISPUTE RESOLUTION if:
Both parties agree to the three DRP panel;
The amount claimed exceeds $50,000.00 AND the
request is made within thirty days of the filing for the
PIP DISPUTE RESOLUTION.
Notwithstanding the aforementioned, there are
practical reasons against the selection of a three DRP
panel. Most importantly, the monetary cost of the
As noted earlier, the initiation of the PIP
DISPUTE RESOLUTION must also include the filing fee.
The filing fee cost for a WRITTEN DOCUMENT SUBMISSION is
$275.00 while the filing fee cost for an ORAL HEARING is
$325.00. However, if a three DRP panel is requested,
there is an additional $800.00 filing fee cost added on to
the aforementioned figures.
Once the DRP is appointed, either party may
challenge the appointment within twenty days of the
appointment for “reasonable cause” pursuant to RULE 8
(APPOINTMENT OF DISPUTE RESOLUTION PROFESSIONAL).
Furthermore, RULE 8 (APPOINTMENT OF DISPUTE RESOLUTION
PROFESSIONAL) provides that “reasonable cause” may include
application of the principles outlined in the CODE OF
JUDICIAL CONDUCT. However, and as a practical matter,
it is extremely difficult to remove a DRP unless an ACTUAL
financial or personal interest can be shown.
Once the time period to challenge the appointment
of a DRP has expired, a discovery period occurs where the
exchange of information between the parties occurs.
However, since the PIP DISPUTE RESOLUTION is not a court
proceeding, the COURT RULES pertaining to discovery do not
specifically apply. In addition, and pursuant to RULE
21 (EVIDENCE), the “DRP shall be the judge of the relevancy
and materiality of the evidence offered, and conformity to
legal rules of evidence shall not be necessary.”
Furthermore, and pursuant to RULE 22 (EVIDENCE BY AFFIDAVIT
OR DOCUMENT), the “DRP may receive and consider the evidence
of witnesses by affidavit or other document, but shall give
it only such weight as the DRP deems it entitled to after
consideration of any objection made to its admission.”
Pursuant to RULE 17 (EXCHANGE OF INFORMATION),
“the DRP may establish the extent of and schedule for any
such exchange pertaining to the subject matter of the
arbitration, including, but not limited to the [discovery]
outlined in N.J.S. 39:6A-13 or provided by the applicable
policy of insurance.” The aforementioned
PRODUCTION OF WRITTEN REPORT OF PATIENT HISTORY,
CONDITION, TREATMENT, DATES AND COSTS OF TREATMENT BY
MEDICAL PROVIDER (N.J.S. 39:6A-13(b));
SUBMISSION TO MENTAL AND/OR PHYSICAL EXAMINATION
BY PATIENT (N.J.S. 39:6A-13(d));
NOTE: If a MENTAL and/or PHYSICAL EXAMINATION is
demanded by the insurance carrier, the aforementioned
statute also requires that the “examination shall be
conducted within the municipality of residence of the
injured person…if there is no qualified health care
provider to conduct the examination within the
municipality of residence of the injured person, then
such examination shall be conducted in an area of the
closest proximity to the injured person’s residence.”)
PRODUCTION OF EXAMINATION REPORT TO PATIENT
SUBMISSION TO STATEMENT UNDER OATH/EXAMINATION
UNDER OATH BY PATIENT (POLICY OF INSURANCE).
Besides the above mentioned discovery tools,
SUBPOENAS may be issued by the DRP, or an attorney
representing a party, for evidence that is relevant and
material to the dispute pursuant to RULE 21 (EVIDENCE).
However, the production of additional evidence by a party is
subject to what “the DRP may deem necessary to an
understanding and determination of the dispute in order to
make a decision” pursuant to the aforementioned RULE.
As such, an overbroad SUBPOENA can be squashed following an
application for same with the DRP.
In addition to the above, and ushered
in with AICRA, is the review by a MEDICAL REVIEW
ORGANIZATION ("MRO") pursuant to RULE 21A (ACCESS TO MEDICAL
EXPERTISE). The parameters of a review by an MRO are:
Whether the medical treatment or diagnostic test
is medically necessary (N.J.A.C. 11:3-5.8(a)(1));
Whether the treatment is in accordance with
medically necessary recognized standard protocols
including those protocols approved by DOBI
Whether the treatment is consistent with symptoms
or diagnosis of the injury (N.J.A.C.
Whether the injury is causally related to the
accident (N.J.A.C. 11:3-5.8(a)(4));
Whether the treatment is of a palliative rather
than a restorative nature (N.J.A.C.
Whether medical procedures and tests that have
been repeated are medically necessary (N.J.A.C.
The findings of an MRO shall be presumed to be
correct, but may be rebutted by a preponderance of the
evidence submitted to the DRP. (N.J.A.C. 11:3-5.8(b)).
As previously mentioned, the time period for the
aforementioned discovery period is set by the DRP pursuant
to RULE 17 (EXCHANGE OF INFORMATION) except if the parties
mutually agree to a modification of a time period pursuant
to RULE 26 (EXTENSION OF TIME). Furthermore, separate
rules pertain if the forum for adjudication is a WRITTEN
DOCUMENT SUBMISSION or an ORAL HEARING and each will be
discussed separately below.
If the forum for adjudication is a WRITTEN
DOCUMENT SUBMISSION, then the deadline for submission of
proofs is set by the DRP pursuant to RULE 21 (EVIDENCE).
Thereafter, the other party shall have ten days from receipt
to respond to same.
However, if the forum for adjudication is an ORAL
HEARING, then a copy of any document that a party intends to
rely upon must be provided to the other party at least
twenty days before the date of the ORAL HEARING set by the
DRP pursuant to RULE 17 (EXCHANGE OF INFORMATION).
Failure to do so may result in the barring of such evidence
at the discretion of the DRP.
In addition to the above, if one or more parties
do not appear at the ORAL HEARING, the DRP must, “in the
presence of all other parties, place a call to the party…not
appearing” pursuant to RULE 20 (ARBITRATION IN THE ABSENCE
OF A PARTY). Thereafter, the DRP can determine to
proceed or adjourn the ORAL HEARING, allow telephonic
participation and supplemental written submissions.
It must be noted that pursuant to RULE 25 (WAIVER
OF RULES) that any party who proceeds with a PIP DISPUTE
RESOLUTION after knowledge that any provision or requirement
of the applicable RULES has not been complied with will be
deemed to have waived the right to object to said violation.
To preserve the right of objection, the aforementioned RULE
requires that the objection must be stated in writing.
Once the PIP DISPUTE RESOLUTION proceedings are
closed, a reopening is permitted pursuant to RULE 24
(REOPENING OF HEARING) before an AWARD is rendered.
The reopening may be done at the initiative of the DRP or
upon request of a party for good cause shown. However,
the aforementioned RULE prohibits the reopening of the PIP
DISPUTE RESOLUTION proceedings by the DRP for new evidence
without the consent of all the parties involved.
Within forty five days from the close of the PIP
DISPUTE RESOLUTION proceedings, or the reopened proceedings,
the DRP shall render an AWARD pursuant to RULE 28 (TIME OF
AWARD). However, the aforementioned time period may be
changed by mutual consent of the parties involved.
The form of the AWARD is set forth in RULE 29
(FORM OF AWARD) and N.J.A.C. 11:3-5.6(d). As such, the
AWARD must be in writing, signed by the DRP and must state:
The issues in dispute;
The findings of the DRP;
The legal conclusions of the DRP; and
If the determination of a MRO is overcome by a
preponderance of the evidence, the reasons supporting
In addition, the AWARD must be made in
accordance with applicable principles of substantive law,
the provisions of the applicable insurance policy and the
regulations promulgated by DOBI. Furthermore, the
AWARD must set forth a decision on all issues submitted by
the parties for resolution.
It must be noted that pursuant to N.J.A.C.
11:3-5.6(e), if an AWARD “requires payment by the insurer
for a treatment or test, payment shall be made, together
with any accrued interest pursuant to N.J.S. 39:6A-5, within
20 days of receipt of a copy of the determination.”
Following receipt of the AWARD, and pursuant to
RULE 35 (MODIFICATION/ CLARIFICATION), a party may request
that the DRP:
Clarify the AWARD; -OR-
Correct any clerical, typographical or
computational errors; -OR-
Make an additional AWARD as to claims presented
to the DRP but omitted from the AWARD.
However, the application for the aforementioned
must be made within twenty days of the receipt of the AWARD.
Furthermore, any objection to the aforementioned must be
made within ten days after the AMERICAN ARBITRATION
ASSOCIATION acknowledges the receipt of the request pursuant
to RULE 35 (MODIFICATION/CLARIFICATION).
In addition to the above, a party may appeal the
AWARD pursuant to RULE 36 (APPEALS UNDER THESE RULES).
As with a request made pursuant to RULE 35
(MODIFICATION/CLARIFICATION), a party making an appeal must
do so within twenty days from the date the AWARD was mailed.
However, an appeal made under RULE 36 (APPEALS UNDER THESE
RULES) must also include a filing fee of $1050.00.
An appeal made pursuant to RULE 36 (APPEALS UNDER
THESE RULES) will be decided by a three DRP panel, none of
whom being the DRP that rendered the initial AWARD.
All decisions and rulings by a aforementioned APPEAL PANEL
must be made by majority and the AWARD being appealed may
only be vacated or modified if it was incorrect as a matter
As noted above, there is a twenty day time period
following receipt of an AWARD for a party to file for a
modification or clarification of the AWARD under RULE 35
(MODIFICATION/ CLARIFICATION) or an appeal of the AWARD
under RULE 36 (APPEALS UNDER THESE RULES).
Furthermore, and as also noted above, N.J.A.C. 11:3-5.6(e),
“requires payment by the insurer for a treatment or test,
payment shall be made, together with any accrued interest
pursuant to N.J.S. 39:6A-5, within 20 days of receipt of a
copy of the [AWARD].”
Given the above, following the expiration of
twenty days following receipt of the AWARD, all
administrative remedies available under the RULES of the
AMERICAN ARBITRATION ASSOCIATION have been exhausted.
Furthermore, any payment required by the insurance carrier
is considered overdue. As such, the next step would be
a filing of a COMPLAINT in the SUPERIOR COURT to either
vacate the AWARD, modify the AWARD or confirm the AWARD into
a JUDGMENT. The aforementioned will be briefly
The statutory authority for the filing of a
COMPLAINT in the SUPERIOR COURT is derived from N.J.S.
2A:24-8. However, and pursuant to the holding of
TRETINA PRINTING, INC. v. FITZPATRICK & ASSOCIATES, INC.,
135 N.J. 349, 358 (1994), an AWARD will be overturned only
on a showing of fraud or corruption on the part of the
arbitrator. As such, the practical application of the
filing of a COMPLAINT in the SUPERIOR COURT is that the
AWARD is binding upon the parties.
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