Officials from the state Department of Insurance have stated that they need to clamp down on the medical benefits that are paid by the auto insurance companies after the accidents. They claim that this will prevent companies from fleeing N.J. However, the skeptics claim that its anti-fraud net has been cast too wide.
A series of changes have been planned for the PIP or Personal Injury Protection in auto insurance. About four hours of testimony was heard on Thursday by the Assembly Financial Institutions and Insurance Committee. The PIP cover offers protection and covers the medical cost regardless of who is at fault at the time of the accident.
There have been proposed changes in the rules for arbitration and the Department of Banking and Insurance wants changes in the list of medical procedures where reimbursement rates from medical providers and insurers are locked into place. The state feels that this plan will prevent lawyers and medical professionals from beating the system, which according to the state is responsible for driving up the PIP costs. This in turn has prompted an increase in rates.
Only Michigan allows motorists to purchase more PIP coverage than New Jersey. The minimum coverage of $250,000 is required, states Douglas Wheeler, who is the director of the state Division of Insurance. Wheeler added that the state was not in favor of reducing the PIP ceiling. However, it advocates bringing about a change in the system.
Wheeler also added that this much of coverage may help in supporting the top-of-the-line trauma system, but for some it unfortunately means something that can be abused. Hence, it is the abuse which threatens the sustenance of the competition in the marketplace.
Those opposing the change in rules claim that more needs to be done to bring about changes in the practices of insurance companies and that include audits as well. These things are necessary prior to making changes that may affect patient care. However, chiropractors and pain management doctors claim that the rules will hurt the providers that don’t indulge in fraudulent practices.
Insurers make money by denying claims and delaying payments and if there is a proposed requirement where the appeals have to be filed within 5 days, then the doctors would be discouraged from providing care, states Joseph Grassi who is the president of the trial lawyers’ New Jersey Association for Justice. These regulations will do nothing to improve medical care, states Grassi.
