Physicians Fight Back Against Insurance Limitations

Like many states dealing with financial shortfalls, New Jersey entertained potential changes to its no-fault auto insurance policies. Such coverage, known as personal injury protection or "PIP coverage", pays for policyholders' medical bills if they are injured in an auto accident. Motorists essentially trade their legal rights to pursue lawsuits for non-economic damages (i.e. pain and suffering) in exchange for guaranteed medical benefits.

Because medical costs are steadily increasing, insurers wanted the state legislature to limit the dollar amount of medical benefits medical providers could bill for. While they explained that cost controls were necessary to ensure that policyholders received quality medical care, it was viewed largely as an attempt to curtail insurance fraud. To that end, a number of initiatives were introduced last summer to crack down on suspected insurance fraud.

However, insurance providers did not anticipate the response from medical providers, who launched their own campaign to oppose any changes to PIP compensation. They argued that if the state limited what doctors could charge for pain management treatments, many auto accident victims would have trouble finding doctors willing to treat them. They insisted that the harm from this revolt would outweigh any troubles stemming from insurance fraud.

Lawyers representing accident victims have echoed these sentiments for some time. Attorney Neil Honschke testified before the New Jersey State Assembly in 1999 regarding limitations on reimbursement for accident related medical treatments, and how injured drivers would ultimately suffer due to the proposed changes.

Legislators responded and struck down proposed price controls on 117 back and spinal outpatient procedures. However, the price limits on what hospitals and surgery centers could charge were not disturbed. This was viewed as a compromise to appease insurers who accused some hospitals (specifically Meadowlands Hospital Medical Center) of grossly inflating costs.

The latest legal wrangling does not mean that insurers will always pay for necessary treatments. If you have been injured in an auto accident, an experienced personal injury attorney can advise you of your rights and options.