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PIP’s Final Solution?

By: Attorney John Silverfield

On Friday, March 09, 2012 at 9:53 PM, HB119 passed on a 22-17 vote in the Senate; after lengthy battles in both the House and Senate. Although the Bill has an Effective Date of July 1, 2012 that will coincide with some changes taking effect immediately (such as tougher licensing standards for medical providers, the creation of an anti-fraud task force with statewide jurisdiction and much harsher sanctions for those engaging in fraudulent activities), more drastic alterations will not be felt at the grass-roots level until 2013, primarily in the form of rate reductions. These reductions mark one of the more pro-consumer measures of the Bill in that they require insurance companies to reduce PIP premium rates by at least 10% by October 1, 2013 and 25% by January 1, 2014. However, unlike previous versions of the Bill that were more stringent, the rate reduction is not guaranteed. Rather, insurance companies are permitted to petition the State to be excused from the requirement if they provide supporting documentation giving a “detailed explanation” as to why their exemption is warranted. As a consequence of the reduction, one interesting aspect of the Bill is that neither acupuncturists nor massage therapists will be permitted to treat patients using PIP, something legislators deemed necessary to justify premium reduction, citing these professions as paramount offenders in contributing to rising costs through excessive/unnecessary treatment.

A Bill with Teeth

While the premium reduction language has drawn much attention, it is merely a quid pro quo tucked neatly into a Bill that will alter the landscape of PIP by attacking fraud at its core: excessive treatment from certain providers. To that end, as of January 1, 2013, chiropractors and pain management clinics will be barred from collecting the full $10,000; limited to rendering necessary screenings and treatments for no more than $2,500, accounting for a 75% reduction. Furthermore, those accident victims with less severe soft-tissue injuries in the form of soreness, swelling and bruising, will receive only $2,500, regardless of who provides the service.

The most notable change, however, pertains not to who can’t collect the $10,000, but rather who can. Prior to the Bill, Plaintiffs were free to seek PIP-covered treatment at any time following the accident, that is no longer the case. Now, those injured in auto accidents will be confined to a 14-day window to seek initial treatment and must be diagnosed as having an “emergency medical condition” within that window, in order to be eligible for the full $10,000 PIP benefit. A medical doctor, osteopathic physician, dentist, physician assistant or advanced registered nurse practitioner must provide the diagnosis, as they are explicitly mentioned in the Bill as those authorized to make the determination. In short, a patient must meet all of the above requirements and failure to do so will act as a bar to recovering the full $10,000, something which those in favor of the Bill cite as the purpose and intent of PIP: providing coverage to take care of essentials immediately following an accident while other collateral sources should handle the remainder. The looming “battleground” will be over the term “emergency medical condition.” It will be interesting to see how that battle develops in the months ahead.

Closing the Floodgates

Though far less controversial, another purported method by which the Bill will increase judicial efficiency is that it will rein in suits filed by medical providers who are in disagreement with insurance companies over the amount they are owed, whether it is the result of a reduction, incorrect calculation or outright denial. The Bill purports to remedy this by setting forth the process certain costs should be calculated, primarily by taking into account the fee schedule under Medicare. It also elaborates and refines provisions relating to the ability of insurance companies to subject claimants to examinations under oath and excises previous statutory language that afforded judges the ability to, at their discretion, significantly increase the amount of fees awarded to plaintiff attorneys.


While the ultimate result of the Bill’s passage will only be shown through its implementation, the changes could likely make PIP Claimants more hesitant to undergo treatment at facilities that lack on-site medical physicians or provide only services for soft-tissue injury. A statutory scheme that once allowed Plaintiffs to treat there and receive a myriad of unnecessary care at great expense has been replaced with a limit that slashes the previous cap by 75 percent. Another interesting result may be that fraudulent claims are nipped at the bud in an earlier stage of the PIP process. Rather than Plaintiffs being allowed to skip emergency treatment and go directly to chiropractors, they are restricted to receiving care from traditional hospitals and physicians in order to receive the full benefits.

About the Author – Attorney John Silverfield is a first year associate with the FLA-affiliated firm Barr, Murman & Tonelli, PA and has been working under the tutelage of FLA founding member Gary W. Nicholson, a thirty year PIP veteran. For more information on Attorneys Silverfield or Nicholson, please visit