This legislation is a step in the wrong direction,” said Richard Stokes, regional manager and counsel for PCI. “The Banking and Insurance Department's PIP medical fee schedule, although it is overly generous to the medical community, would move the system forward and provide some medical cost control. In contrast, this legislation would essentially eliminate any opportunities for consumers to benefit from a fee schedule for the foreseeable future.”
The Department of Banking and Insurance adopted the much-awaited PIP medical fee schedule on August 29, 2007 after working on this issue for more than two years. However, the New Jersey Medical Society and others filed a motion in court seeking to prevent the implementation of the fee schedule. The courts granted a stay of the PIP medical fee schedule pending a further hearing by the courts on this matter.
“With the pending court action, even if this committee does not take action today, the implementation of the department’s proposed fee schedule will be delayed for at least several months,” said Stokes. “The medical providers’ litigation makes taking action on this legislation during the lame duck session unnecessary. We urge the Legislature to allow the regulatory and judicial process to move forward.”
New Jersey historically has been one of the most expensive markets for auto insurance coverage, but the recent reform efforts are beginning to show improvement in this regard. For these efforts to be successful, however, medical costs must be addressed. “Without the implementation of the fee schedule, the PIP reimbursement system will continue to be expensive, inefficient and anti-consumer,” said Stokes.
PCI is composed of more than 1,000 member companies, representing the broadest cross-section of insurers of any national trade association. PCI members write over $194 billion in annual premium, 40.1 percent of the nation’s property/casualty insurance. Member companies write 51.3 percent of the U.S. automobile insurance market, 39 percent of the homeowners market, 32.1 percent of the commercial property and liability market, and 38.7 percent of the private workers compensation market.