State says PIP changes will help prevent customer premium increases

TRENTON – The state Department of Banking and Insurance proposals that were the subject of an Assembly Committee hearing today are needed to prevent premium hikes on customers, which accounted for 97 percent of price hikes in recent years, according to the state department.

“The cost of providing PIP coverage (personal injury protection) continues to exert upward pressure on private passenger automobile insurance rates,” according to a statement in the department’s proposal.

According to DOBI’s own data, the number of arbitration cases has nearly doubled, from 34,190 in 2005 to 61,765 in 2010.

It added that it’s paying out more in PIP award money than it’s taking in. For every dollar of PIP premiums collected, $1.23 in benefits are being paid.

Dr. Steven Clark of the Association of New Jersey Chiropractors testified at today’s hearing that the rules “could restrict patient care.”

In the state’s proposal, one of the regulations puts limits on how they, among other medical professionals, can be reimbursed for certain procedures, such as spinal work.

The proposed regulation states that “a provider cannot separately be reimbursed for manipulation of the cervical, lumbar and sacral spine regions on one date.”

Another proposed regulation calls for no longer reimbursing for specialized X-rays.

“X-ray digitization and computer radiographic mensuration are not reimbursable under PIP,” it states. “These procedures do not provide any additional information than a regular X-ray.”

One official from Spinal Kinetics who testified at the hearing called the proposal “misleading.”

Another proposed regulation calls for attorney’s fees to be reviewed by a dispute resolution professional if they exceed a client’s PIP award.  Banking and Insurance said such a mechanism is needed because there have been far too many cases where the lawyers’ bills are much higher than the restitution for their clients.

The state said that in 2010, some 3,460 of 10,703 arbitration cases involved higher attorney fees than the PIP awards their clients received. In one case, a lawyer charged $3,380 on a case where the client received a mere $375.

Earlier coverage:

Insurers, physicians square off over personal injury protection revisions

 

State says PIP changes will help prevent customer premium increases