SENATE, No. 2310
STATE OF NEW JERSEY
INTRODUCED DECEMBER 1, 1997
By Senator KYRILLOS
An Act concerning automobile insurance and revising various parts of the statutory law.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. (New section) a. This act shall be known and may be cited as the "Automobile Insurance Cost Reduction Act."
b. Whereas, while New Jersey's automobile insurance no-fault law, which was enacted twenty-five years ago, has provided many benefits to New Jersey residents in that it has provided medical benefits and wage replacement benefits to those injured in automobile accidents without regard to fault; and
Whereas, the medical expenses paid by no-fault policies over those years amount to billions of dollars, which would otherwise have been paid by health insurers and employers, thus raising the cost of health insurance for everyone; and
Whereas, while medical benefits under no-fault insurance were initially unlimited, the high cost of such expansive benefits proved to be prohibitive, and the Legislature found it necessary to circumscribe these benefits, beginning in 1990, when this process was begun by establishing a ceiling of $250,000 on no-fault medical benefits; and
Whereas, the high frequency of medical expense claims under personal injury protection benefits, caused in part by the overutilization of medical benefits, continues to contribute to the escalating cost of automobile insurance, necessitating the imposition of further controls on the use of those benefits and a reduction in the cost of contesting the eligibility of medical expenses for reimbursement, thus reducing the rate of premium increases for those benefits; and
Whereas, the Legislature believes that it is good public policy to offer motorists the ability to further circumscribe their right to sue for pain and suffering in return for premium savings, while permitting those persons who desire a somewhat more liberal right to sue and are willing to pay the somewhat higher costs associated with that right the ability to have the same access to the courts which they have at present; and
Whereas, the high cost of automobile insurance in New Jersey has presented a significant problem for many lower-income residents of the State, many of whom have been forced to drop their coverage in violation of the State's mandatory motor vehicle insurance laws; and
Whereas, the Legislature believes that the State's automobile insurance law should be modified in such a manner as to give all motorists the option to reduce their coverage to meet their needs, thus lowering their premium costs, while at the same time maintaining their right to sue when they are injured through the negligence of others; and
Whereas, the Legislature also believes in the importance of maintaining the right of individuals to protect themselves against loss, to the extent necessary to meet their individual needs and by the most economical means possible, through the purchase of coverage insuring against injuries or damage to property by individuals who are uninsured or who do not have coverage which is adequate to cover the cost of an accident; and
Whereas, to meet these goals, this legislation provides for the creation of two basic insurance coverage options, a standard policy and a mini policy, provides for cost containment through the establishment of a peer review system for medical claims, raises the basic reimbursement rates for wage loss and other services provided under personal injury protection coverage, provides for an additional threshold for suits for pain and suffering, eliminates mandatory uninsured motorist coverage, and creates a new uninsured motorist coverage to pay for economic loss only, at reduced rates.
2. Section 2 of P.L.1972, c.70 (C.39:6A-2) is amended to read as follows:
2. As used in this act:
a. "Automobile" means a private passenger automobile of a private passenger or station wagon type that is owned or hired and is neither used as a public or livery conveyance for passengers nor rented to others with a driver; and a motor vehicle with a pickup body, a delivery sedan, a van, or a panel truck or a camper type vehicle used for recreational purposes owned by an individual or by husband and wife who are residents of the same household, not customarily used in the occupation, profession or business of the insured other than farming or ranching. An automobile owned by a farm family copartnership or corporation, which is principally garaged on a farm or ranch and otherwise meets the definitions contained in this section, shall be considered a private passenger automobile owned by two or more relatives resident in the same household.
b. "Essential services" means those services performed not for income which are ordinarily performed by an individual for the care and maintenance of such individual's family or family household.
c. "Income" means salary, wages, tips, commissions, fees and other earnings derived from work or employment.
d. "Income producer" means a person who, at the time of the accident causing personal injury or death, was in an occupational status, earning or producing income.
e. "Medical expenses" means [expenses for medical treatment, surgical treatment, dental treatment, professional nursing services, hospital expenses, rehabilitation services, X-ray and other diagnostic services, prosthetic devices, ambulance services, medication and other reasonable and necessary expenses resulting from the treatment prescribed by persons licensed to practice medicine and surgery pursuant to R.S.45:9-1 et seq., dentistry pursuant to R.S.45:6-1 et seq., psychology pursuant to P.L.1966, c. 282 (C.45:14B-1 et seq.) or chiropractic pursuant to P.L.1953, c. 233 (C.45:9-41.1 et seq.) or] reasonable and necessary expenses for treatment or services as provided by the policy, including medical, surgical and diagnostic services and hospital expenses, provided by a health care provider licensed or certified by the State, and reasonable and necessary expenses for ambulance services, medication and other services as may be provided for in the policy. "Medical expenses" shall include treatment or services by persons similarly licensed in other states and nations [or] , as well as any nonmedical remedial treatment rendered in accordance with a recognized religious method of healing.
f. "Hospital expenses" means [:
(1) The cost of a semiprivate room, based on rates customarily charged by the institution in which the recipient of benefits is confined;
(2) The cost of board, meals and dietary services;
(3) The cost of other hospital services, such as operating room; medicines, drugs, anesthetics; treatments with X-ray, radium and other radioactive substances; laboratory tests, surgical dressings and supplies; and other medical care and treatment rendered by the hospital;
(4) The cost of treatment by a physiotherapist;
(5) The cost of medical supplies, such as prescribed drugs and medicines; blood and blood plasma; artificial limbs and eyes; surgical dressings, casts, splints, trusses, braces, crutches; rental of wheelchair, hospital bed or iron lung; oxygen and rental of equipment for its administration] the cost of treatment and services, as provided in the policy, by a licensed and accredited acute care facility which engages primarily in providing diagnosis, treatment and care of sick and injured persons on an inpatient or outpatient basis; the cost of covered treatment and services provided by an extended care facility which provides room and board and skilled nursing care 24 hours a day and which is recognized by the administrators of the federal Medicare program as an extended care facility; and the cost of covered services at an ambulatory surgical facility supervised by a physician licensed in this State or in another jurisdiction and recognized by the Commissioner of Health and Senior Services, any other facility licensed, certified or recognized by the Commissioner of Health and Senior Services or by another jurisdiction in which it is located.
g. "Named insured" means the person or persons identified as the insured in the policy and, if an individual, his or her spouse, if the spouse is named as a resident of the same household, except that if the spouse ceases to be a resident of the household of the named insured, coverage shall be extended to the spouse for the full term of any policy period in effect at the time of the cessation of residency.
h. "Pedestrian" means any person who is not occupying, entering into, or alighting from a vehicle propelled by other than muscular power and designed primarily for use on highways, rails and tracks.
i. "Noneconomic loss" means pain, suffering and inconvenience.
j. "Motor vehicle" means a motor vehicle as defined in R.S. 39:1-1, exclusive of an automobile as defined in subsection a. of this section.
k. "Standard automobile insurance policy" means an automobile insurance policy with at least the coverage required pursuant to sections 3 and 4 of P.L.1972, c.70 (C.39:6A-3 and 39:6A-4).
l. "Mini automobile insurance policy" means an automobile insurance policy pursuant to section of 4 of P.L. , c. (C. )(now before the Legislature as this bill).
(cf: P.L.1983, c.362, s.6)
3. Section 3 of P.L.1972, c.70 (C.39:6A-3) is amended to read as follows:
3. Compulsory automobile insurance coverage; limits. [Every] Except as provided by section 4 of P.L. , c. (C. )(now before the Legislature as this bill), every owner or registered owner of an automobile registered or principally garaged in this State shall maintain automobile liability insurance coverage, under provisions approved by the Commissioner of Banking and Insurance, insuring against loss resulting from liability imposed by law for bodily injury, death and property damage sustained by any person arising out of the ownership, maintenance, operation or use of an automobile wherein such coverage shall be at least in:
a. an amount or limit of $15,000.00, exclusive of interest and costs, on account of injury to, or death of, one person, in any one accident; and
b. an amount or limit, subject to such limit for any one person so injured or killed, of $30,000.00, exclusive of interest and costs, on account of injury to or death of, more than one person, in any one accident; and
c. an amount or limit of $5,000.00, exclusive of interest and costs, for damage to property in any one accident.
No licensed insurance carrier shall refuse to renew the required coverage stipulated by this act of an eligible person as defined in section 25 of P.L.1990, c.8 (C.17:33B-13) except in accordance with the provisions of section 26 of P.L.1988, c.119 (C.17:29C-7.1) or with the consent of the Commissioner of Banking and Insurance.
(cf: P.L.1990, c.8, s.3)
4. (New section) As an alternative to the mandatory coverages provided in sections 3 and 4 of P.L.1972, c.70 (C.39:6A-3 and 39:6A-4), any owner or registered owner of an automobile registered or principally garaged in this State may elect a "mini" automobile insurance policy providing the following coverage:
a. Personal injury protection coverage, for the payment of benefits without regard to negligence, liability or fault of any kind, to the named insured and members of his family residing in his household, who sustained bodily injury as a result of an accident while occupying, entering into, alighting from or using an automobile, or as a pedestrian, caused by an automobile or by an object propelled by or from an automobile, to other persons sustaining bodily injury while occupying, entering into, alighting from or using the automobile of the named insured, with the permission of the named insured, and to pedestrians sustaining bodily injury caused by the named insured's automobile or stuck by an object propelled by or from such automobile. "Personal injury protection coverage" issued pursuant to this section means and includes payment of medical expense benefits, as provided in the policy and approved by the commissioner, for the reasonable and necessary treatment of bodily injury in an amount not to exceed $10,000 per person per accident. Medical expense benefits payable under this subsection shall not be assignable, except to a provider of service benefits, in accordance with policy terms approved by the commissioner, nor shall they be subject to levy, execution, attachment or other process for satisfaction of debts. Medical expense benefits payable in accordance with this subsection shall be subject to a deductible of $250, and copayments as provided for in the policy, if any. No insurer or provider providing service benefits to an insured shall have a right of subrogation for the amount of benefits paid pursuant to any deductible or copayment under this section.
b. Liability insurance coverage insuring against loss resulting from liability imposed by law for property damage sustained by any person arising out of the ownership, maintenance, operation or use of an automobile in an amount or limit of $5,000, exclusive of interest and costs, for damage to property in any one accident.
A mini automobile insurance policy shall apply to the named insured and any immediate family member residing in the named insured's household. If a named insured has elected the mini automobile insurance policy option and an immediate family member or members or relatives resident in his household have one or more policies with the coverages provided for in sections 3 and 4 of P.L.1972, c.70 (C.39:6A-3 and 39:6A-4), the provisions of section 12 of P.L.1983, c.362 (C.39:6A-4.2) shall apply.
Every named insured and any other person to whom the mini automobile insurance policy applies shall be subject to the tort option provided in subsection a. of Section 8 of P.L.1972, c.70 (C.39:6A-8).
No licensed insurance carrier shall refuse to renew the coverage stipulated by this section of an eligible person as defined in section 25 of P.L.1990, c.8 (C.17:33B-13) except in accordance with the provisions of section 26 of P.L.1988, c.119 (C.17:29C-7.1) or with the consent of the Commissioner of Banking and Insurance.
5. (New section) a. All automobile insurance policies issued or renewed on or after the effective date of P.L. , c. (C. )(now before the Legislature as this bill) shall be issued or renewed including at least the coverages required pursuant to sections 3 and 4 of P.L.1972, c.70 (C.39:6A-3 and 39:6A-4), unless the named insured elects a mini automobile insurance policy pursuant to section 4 of P.L. , c. (C. )(now before the Legislature as this bill). Election of a mini automobile insurance policy shall be in writing and signed by the named insured on the coverage selection form required by section 17 of P.L.1983, c.362 (c.39:6A-23). The coverage election form shall contain a statement, clearly readable and in bold type, in a form approved by the commissioner, that election of a mini automobile insurance policy may subject the named insured to a claim or judgment for noneconomic loss which is not covered by the mini automobile insurance policy, and which may place his assets at risk.
b. The insurance coverages provided for in section 4 of P.L. , c. (C. )(now before the Legislature as this bill) shall be offered by every insurer which writes insurance coverages pursuant to sections 3 and 4 of P.L.1972, c.70 (C.39:6A-3 and 39:6A-4).
6. Section 4 of P.L.1972, c.70 (C.39:6A-4) is amended to read as follows:
4. Personal injury protection coverage, regardless of fault.
[Every automobile liability insurance policy, issued or renewed on or after January 1, 1991, insuring an automobile as defined in section 2 of P.L.1972, c.70 (C.39:6A-2) against loss resulting from liability imposed by law for bodily injury, death and property damage sustained by any person arising out of ownership, operation, maintenance or use of an automobile shall provide personal injury protection coverage, as defined hereinbelow, under provisions approved by the Commissioner of Banking and Insurance, for the payment of benefits without regard to negligence, liability or fault of any kind, to the named insured and members of his family residing in his household who sustained bodily injury as a result of an accident while occupying, entering into, alighting from or using an automobile, or as a pedestrian, caused by an automobile or by an object propelled by or from an automobile, to other persons sustaining bodily injury while occupying, entering into, alighting from or using the automobile of the named insured, with the permission of the named insured, and to pedestrians, sustaining bodily injury caused by the named insured's automobile or struck by an object propelled by or from such automobile.
"Personal injury protection coverage" means and includes:
a. Medical expense benefits. Payment of reasonable medical expense benefits in an amount not to exceed $250,000 per person per accident. In the event benefits paid by an insurer pursuant to this subsection are in excess of $75,000 on account of personal injury to any one person in any one accident, such excess shall be paid by the insurer in consultation with the Unsatisfied Claim and Judgment Fund Board and shall be reimbursable to the insurer from the Unsatisfied Claim and Judgment Fund pursuant to section 2 of P.L.1977, c.310 (C.39:6-73.1).
b. Income continuation benefits. The payment of the loss of income of an income producer as a result of bodily injury disability, subject to a maximum weekly payment of $100.00. Such sum shall be payable during the life of the injured person and shall be subject to an amount or limit of $5,200.00, on account of injury to any one person in any one accident, except that in no case shall income continuation benefits exceed the net income normally earned during the period in which the benefits are payable.
c. Essential services benefits. Payment of essential services benefits to an injured person shall be made in reimbursement of necessary and reasonable expenses incurred for such substitute essential services ordinarily performed by the injured person for himself, his family and members of the family residing in the household, subject to an amount or limit of $12.00 per day. Such benefits shall be payable during the life of the injured person and shall be subject to an amount or limit of $4,380.00, on account of injury to any one person in any one accident.
d. Death benefits. In the event of the death of an income producer as a result of injuries sustained in an accident entitling such person to benefits under this section, the maximum amount of benefits which could have been paid to the income producer, but for his death, under subsection b. of this section shall be paid to the surviving spouse, or in the event there is no surviving spouse, then to the surviving children, and in the event there are no surviving spouse or surviving children, then to the estate of the income producer.
In the event of the death of one performing essential services as a result of injuries sustained in an accident entitling such person to benefits under subsection c. of this section, the maximum amount of benefits which could have been paid such person, under subsection c., shall be paid to the person incurring the expense of providing such essential services.
e. Funeral expenses benefits. All reasonable funeral, burial and cremation expenses, subject to a maximum benefit of $1,000.00, on account of the death of any one person in any one accident shall be payable to the decedent's estate.
Benefits payable under this section shall:
(1) Be subject to any option elected by the policyholder pursuant to section 13 of P.L.1983, c.362 (C.39:6A-4.3);
(2) Not be assignable, except to a provider of service benefits under this section in accordance with policy terms approved by the commissioner, nor subject to levy, execution, attachment or other process for satisfaction of debts.
Medical expense benefit payments shall be subject to a deductible of $250.00 on account of injury in any one accident and a copayment of 20% of any benefits payable between $250.00 and $5,000.00.
No insurer or health provider providing benefits to an insured shall have a right of subrogation for the amount of benefits paid pursuant to any deductible or copayment under this section.]
Except as provided by section 4 of P.L. , c. (C. )(now before the Legislature as this bill), every standard automobile liability insurance policy issued or renewed on or after the effective date of P.L. , c. (C. )(now before the Legislature as this bill) shall contain personal injury protection coverage, for the payment of benefits without regard to negligence, liability or fault of any kind, to the named insured and members of his family residing in his household, who sustained bodily injury as a result of an accident while occupying, entering into, alighting from or using an automobile, or as a pedestrian, caused by an automobile or by an object propelled by or from an automobile, to other persons sustaining bodily injury while occupying, entering into, alighting from or using the automobile of the named insured, with permission of the named insured, and to pedestrians, sustaining bodily injury caused by the named insured's automobile or struck by an object propelled by or from that automobile. "Personal injury protection coverage" means and includes:
a. Payment of medical expense benefits, as provided in the policy and approved by the commissioner, for the reasonable and necessary treatment of bodily injury in an amount not to exceed $250,000 per person per accident. In the event benefits paid by an insurer pursuant to this subsection are in excess of $75,000 on account of bodily injury to any one person in any one accident, that excess shall be paid by the insurer in consultation with Unsatisfied Claim and Judgment Fund Board and shall be reimbursable to the insurer from the Unsatisfied Claim and Judgment Fund pursuant to section 2 of P.L.1977, c.310 (C.39:6-73.1);
b. Payment of the loss of income of an income producer as a result of bodily injury disability, subject to a maximum weekly payment of $200. The sum shall be payable during the life of the injured person and shall be subject to an amount or limit of $10,400, on account of injury to any one person in any one accident, except that in no case shall income continuation benefits exceed the net income normally earned during the period in which the benefits are payable;
c. Payment of benefits for essential services to an injured person for the reimbursement of reasonable and necessary expenses incurred for the substitution of essential services ordinarily performed by the injured person for himself, his family and members of the family residing in the household, subject to an amount or limit of $20 per day. The benefits shall be payable during the life of the injured person and shall be subject to an amount or limit of $6,300, on account of injury to any one person in any one accident;
d. Payment of death benefits in the event of the death of an income producer as a result of injuries sustained in an accident entitling that person to benefits under this section. The maximum amount of income continuation benefits which could have been paid to the income producer pursuant to subsection b. of this section, but for his death, shall be paid to the surviving spouse, or in the event there is no surviving spouse, then to the surviving children, and in the event there are no surviving spouse or children, then to the estate of the income producer; and, in the event of the death of one performing essential services as a result of injuries sustained in an accident entitling that person to benefits under subsection c. of this section, death benefits shall be paid to the person incurring the expense of providing the essential services;
e. Payment of all reasonable funeral, burial and cremation expenses, subject to a maximum benefit of $1,500, on account of the death of any one person in any one accident, payable to the decedent's estate.
Benefits payable under this section shall be subject to any option elected by the named insured pursuant to section 13 of P.L.1983, c.362 (C.39:6A-4.3), and shall not be assignable, except to a provider of service benefits, in accordance with policy terms approved by the commissioner, nor shall they be subject to levy, execution, attachment or other process for satisfaction of debts.
Medical expense benefits payable in accordance with subsection a. of this section shall be subject to a deductible of $250 as well as any copayments provided in the policy. No insurer or health care provider providing benefits to an insured shall have a right of subrogation for
the amount of benefits paid pursuant to any deductible or copayment.
(cf: P.L.1997, c.151, s.31)
7. Section 13 of P.L.1983, c.362 (C.39:6A-4.3) is amended to read as follows:
13. Personal injury protection coverage options. With respect to personal injury protection coverage provided on an automobile in accordance with section 4 of P.L.1972, c.70 (C.39:6A-4), the automobile insurer shall provide the following coverage options:
a. Medical expense benefit deductibles in amounts of $500.00, $1,000.00 and $2,500.00 for any one accident;
b. [The option to exclude all benefits offered under subsections b., c., d., and e. of section 4;] (Deleted by amendment, P.L. ,c. .)
c. (Deleted by amendment, P.L.1988, c.119.)
d. For policies issued or renewed on or after January 1, 1991, the option that other health insurance coverage or benefits of the insured, including health care services provided by a health maintenance organization and any coverage or benefits provided under any federal or State program, are the primary coverage in regard to medical expense benefits pursuant to section 4 of P.L.1972, c.70 (C.39:6A-4). If health insurance coverage or benefits are primary, an automobile insurer providing medical expense benefits under personal injury protection coverage shall be liable for reasonable medical expenses not covered by the health insurance coverage or benefits up to the limit of the medical expense benefit coverage. The principles of coordination of benefits shall apply to personal injury protection medical expense benefits coverage pursuant to this subsection.
Insurers shall offer the options provided by subsections a. and b. of this section at appropriately reduced premiums. For policies issued or renewed prior to January 1, 1992, insurers shall offer the option provided by subsection d. of this section at a discount of not less than 25% from the base rate applicable to the first $250,000 of medical expense benefits, and for policies issued or renewed on or after January 1, 1992, insurers shall offer the option at an appropriate discount from the base rate for the amount of medical expense benefits coverage taken.
Any named insured who chooses the option provided by subsection d. of this section shall provide proof that he and members of his family residing in his household are covered by health insurance coverage or benefits in a manner and to an extent approved by the commissioner. Nothing in this section shall be construed to require a health insurer, health maintenance organization or governmental agency to cover individuals or treatment which is not normally covered under the applicable benefit contract or plan. If it is determined that an insured who selected or is otherwise covered by the option provided in subsection d. of this section did not have such health coverage in effect at the time of an accident, medical expense benefits shall be payable by the person's automobile insurer and shall be subject to any deductible required by law or otherwise selected as an option pursuant to subsection a. of this section, any copayment required by law and an additional deductible in the amount of $750.
An option elected by the named insured in accordance with this section shall apply only to the named insured and any resident relative in the named insured's household who is not a named insured under another automobile insurance policy, and not to any other person eligible for personal injury protection benefits required to be provided in accordance with section 4 of P.L.1972, c.70 (C.39:6A-4).
[In the case of a medical expense benefit deductible, the deductible elected by the named insured shall be satisfied for any one accident, whether the medical expense benefits are paid or provided, in the amount of the deductible, to the named insured or to one or more resident relatives in the named insured's household who are not named insureds under another insurance policy, or to any combination thereof.]
Medical expense benefits payable in any amount between the deductible selected pursuant to subsection a. of this section and $5,000.00 shall be subject to [a] the copayment [of 20%] provided in the policy, if any.
No insurer or health provider providing benefits to an insured who has elected a deductible pursuant to subsection a. of this section shall have a right of subrogation for the amount of benefits paid pursuant to a deductible elected thereunder or any applicable copayment.
The Commissioner of Banking and Insurance shall adopt rules and regulations to effectuate the purposes of this section and may promulgate standards applicable to the coordination of personal injury protection medical expense benefits coverage.
(cf: P.L.1997, c.151, s.32)
8. Section 14 of P.L.1985, c.520 (C.39:6A-4.5) is amended to read as follows:
14. a. Any person who, at the time of an automobile accident resulting in injuries to that person, is required but fails to maintain medical expense benefits coverage mandated by section 4 of P.L.1972, c.70 (C.39:6A-4) or section 4 of P.L. , c. (C. )(now before the Legislature as this bill) shall have no cause of action for recovery of economic or noneconomic loss sustained as a result of an accident while operating an uninsured automobile.
b. Any person who is convicted of, or pleads guilty to, operating a motor vehicle in violation of R.S.39:4-50, section 2 of P.L.1981, c.512 (C.39:4-50.4a), or a similar statute from any other jurisdiction, in connection with an accident, shall have no cause of action for recovery of economic or noneconomic loss sustained as a result of the accident.
c. Any person acting with specific intent of causing injury to himself or others in the operation or use of an automobile shall have no cause of action for recovery of economic or noneconomic loss sustained as a result of an accident arising from such conduct.
(cf: P.L.1997, c.151, s.13)
9. Section 6 of P.L.1972, c.70 (C.39:6A-6) is amended to read as follows:
6. Collateral Source. The benefits provided in [section] sections 4 and [section] 10 of P.L.1972, c.70 (C.39:6A-4 and 39:6A-10) and the medical expense benefits provided in section 4 of P.L. , c. (C. )(now before the Legislature as this bill) shall be payable as loss accrues, upon written notice of such loss and without regard to collateral sources, except that benefits, collectible under workers' compensation insurance, employees' temporary disability benefit statutes, medicare provided under Federal law, and benefits, in fact collected, that are provided under Federal law to active and retired military personnel shall be deducted from the benefits collectible under [section] sections 4 and [section] 10 of P.L.1972, c.70 (C.39:6A-4 and 39:6A-10) and the medical expense benefits provided in section 4 of P.L. , c. (C. )(now before the Legislature as this bill).
If an insurer has paid those benefits and the insured is entitled to, but has failed to apply for, workers' compensation benefits or employees' temporary disability benefits, the insurer may immediately apply to the provider of workers' compensation benefits or of employees' temporary disability benefits for a reimbursement of any [section 4 and section 10] benefits pursuant to sections 4 and 10 of P.L.1972, c.70 (C.39:6A-4 and 39:6A-10) or medical expense benefits pursuant to section 4 of P.L. ,c. (C. )(now before the Legislature as this bill) it has paid.
(cf: P.L.1983, c.362, s.9)
10. Section 7 of P.L.1972, c.70 (C.39:6A-7) is amended to read as follows:
7. Exclusions. a. Insurers may exclude a person from benefits under [section] sections 4 and [section] 10 [where such] of P.L.1972, c.70 (C.39:6A-4 and 39:6A-10) and medical expense benefits provided in section 4 of P.L. , c. (C. )(now before the Legislature as this bill) if that person's conduct contributed to his personal injuries or death occurred in any of the following ways:
(1) while committing a high misdemeanor or felony or seeking to avoid lawful apprehension or arrest by a police officer; or
(2) while acting with specific intent of causing injury or damage to himself or others.
b. An insurer may also exclude from [section 4 and section 10] the benefits provided in sections 4 and 10 of P.L.1972, c.70 (C.39:6A-4 and 39:6A-10) and the medical expense benefits provided in section 4 of P.L. , c. (C. )(now before the Legislature as this bill) any person having incurred injuries or death, who, at the time of the accident:
(1) was the owner or registrant of an automobile registered or principally garaged in this State that was being operated without personal injury protection coverage;
(2) was occupying or operating an automobile without the permission of the owner or other named insured.
(cf: P.L.1983, c.362, s.10)
11. Section 8 of P.L.1972, c.70 (C.39:6A-8) is amended to read as follows:
8. Tort exemption; limitation on the right to noneconomic loss.
One of the following two tort options shall be elected, in accordance with section 14.1 of P.L.1983, c.362 (C.39:6A-8.1), by any named insured required to maintain personal injury protection coverage pursuant to section 4 of P.L.1972, c.70 (C.39:6A-4):
a. Every owner, registrant, operator or occupant of an automobile to which section 4 of P.L.1972, c.70 (C.39:6A-4), personal injury protection coverage, regardless of fault, applies, and every person or organization legally responsible for his acts or omissions, is hereby exempted from tort liability for noneconomic loss to a person who is subject to this subsection and who is either a person who is required to maintain the coverage mandated by this act, or is a person who has a right to receive benefits under section 4 of P.L.1972, c.70 (C.39:6A-4), as a result of bodily injury, arising out of the ownership, operation, maintenance or use of such automobile in this State, unless that person has sustained a personal injury which results in death; dismemberment; significant disfigurement; a fracture; loss of a fetus; permanent loss of use of a body organ, member, function or system; permanent consequential limitation of use of a body organ or member; significant limitation of use of a body function or system; or a medically determined injury or impairment of a non-permanent nature which prevents the injured person from performing substantially all of the material acts which constitute that person's usual and customary daily activities for not less than 90 days during the 180 days immediately following the occurrence of the injury or impairment; or b. As an alternative to the basic tort option specified in subsection a. of this section, every owner, registrant, operator, or occupant of an automobile to which section 4 of P.L.1972, c.70 (C.39:6A-4) applies, and every person or organization legally responsible for his acts or omissions, shall be liable for noneconomic loss to a person who is subject to this subsection and who is either a person who is required to maintain the coverage mandated by P.L.1972, c.70 (C.39:6A-1 et seq.) or is a person who has a right to receive benefits under section 4 of that act (C.39:6A-4), as a result of bodily injury, arising out of the ownership, operation, maintenance or use of such automobile in this State.
The tort option provisions of subsection b. of this section shall also apply to the right to recover for noneconomic loss of any person eligible for benefits pursuant to section 4 of P.L.1972, c.70 (C.39:6A-4) but who is not required to maintain personal injury protection coverage and is not an immediate family member, as defined in section 14.1 of P.L.1983, c.362 (C.39:6A-8.1), under an automobile insurance policy.
The tort option provisions of subsection a. of this section shall also apply to any person subject to section 14 of P.L.1985, c.520 (C.39:6A-4.5).
The tort option provisions of subsections a. and b. of this section [as provided in this 1988 amendatory and supplementary act] shall apply to automobile insurance policies issued or renewed [on or after January 1, 1989 and as otherwise provided by law] prior to the effective date of P.L. , c. (C. )(now before the Legislature as this bill).
(cf: P.L.1990, c.8, s.9)
12. Section 8 of P.L.1972, c.70 (C.39:6A-8) is amended to read as follows:
8. Tort exemption; limitation on the right to noneconomic loss.
One of the following [two] three tort options shall be elected, in accordance with section 14.1 of P.L.1983, c.362 (C.39:6A-8.1), by any named insured required to maintain personal injury protection coverage pursuant to section 4 of P.L.1972, c.70 (C.39:6A-4) or medical expense benefits pursuant to section 4 of P.L. , c. (C. )(now before the Legislature as this bill):
a. Every owner, registrant, operator or occupant of an automobile to which section 4 of P.L.1972, c.70 (C.39:6A-4), personal injury protection coverage, or medical expense benefits pursuant to section 4 of P.L. , c. (C. )(now before the Legislature as this bill), regardless of fault, applies, and every person or organization legally responsible for his acts or omissions, is hereby exempted from tort liability for noneconomic loss to a person who is subject to this subsection and who is either a person who is required to maintain personal injury protection coverage pursuant to section 4 of P.L.1972, c.70 (C.39:6A-4) or medical expense benefits pursuant to section 4 of P.L. , c. (C. )(now before the Legislature as this bill), or is a person who has a right to receive benefits under section 4 of P.L.1972, c.70 (C.39:6A-4) or medical expense benefits pursuant to section 4 of P.L. , c. (C. )(now before the Legislature as this bill), as a result of bodily injury, arising out of the ownership, operation, maintenance or use of such automobile in this State, unless that person has sustained a bodily injury which results in death, serious impairment of body function or permanent serious disfigurement; or
b. As an alternative to the basic tort option specified in subsection a. of this section, every owner, registrant, operator or occupant of an automobile to which section 4 of P.L.1972, c.70 (C.39:6A-4), personal injury protection coverage, or medical expense benefits pursuant to section 4 of P.L. , c. (C. )(now before the Legislature as this bill), regardless of fault, applies, and every person or organization legally responsible for his acts or omissions, is hereby exempted from tort liability for noneconomic loss to a person who is subject to this subsection and who is either a person who is required to maintain the coverage mandated by this act, or is a person who has a right to receive benefits under section 4 of P.L.1972, c.70 (C.39:6A-4), as a result of bodily injury, arising out of the ownership, operation, maintenance or use of such automobile in this State, unless that person has sustained a personal injury which results in death; dismemberment; significant disfigurement; a fracture; loss of a fetus; permanent loss of use of a body organ, member, function or system; permanent consequential limitation of use of a body organ or member; significant limitation of use of a body function or system; or a medically determined injury or impairment of a non-permanent nature which prevents the injured person from performing substantially all of the material acts which constitute that person's usual and customary daily activities for not less than 90 days during the 180 days immediately following the occurrence of the injury or impairment; or
[b.] c. As an alternative to the basic tort option specified in subsection a. of this section, every owner, registrant, operator [,] or occupant of an automobile to which section 4 of P.L.1972, c.70 (C.39:6A-4), personal injury protection coverage, or medical expense benefits pursuant to section 4 of P.L. , c. (C. )(now before the Legislature as this bill), regardless of fault, applies, and every person or organization legally responsible for his acts or omissions, shall be liable for noneconomic loss to a person who is subject to this subsection and who is either a person who is required to maintain the coverage mandated by P.L.1972, c.70 (C.39:6A-1 et seq.) or is a person who has a right to receive benefits under section 4 of that act (C.39:6A-4), as a result of bodily injury, arising out of the ownership, operation, maintenance or use of such automobile in this State.
The tort option provisions of subsection [b.] c. of this section shall also apply to the right to recover for noneconomic loss of any person eligible for benefits pursuant to section 4 of P.L.1972, c.70 (C.39:6A-4) or medical expense benefits pursuant to section 4 of P.L. , c. (C. )(now before the Legislature as this bill) but who is not required to maintain personal injury protection coverage pursuant to section 4 of P.L.1972, c.70 (C.39:6A-4) or medical expense benefits pursuant to section 4 of P.L. , c. (C. )(now before the Legislature as this bill) and is not an immediate family member, as defined in section 14.1 of P.L.1983, c.362 (C.39:6A-8.1), under [an] a standard automobile insurance policy or mini automobile insurance policy.
The tort option provisions of subsection a. of this section shall also apply to any person subject to section 14 of P.L.1985, c.520 (C.39:6A-4.5) and to every named insured and any other person to whom the medical expense benefits of the mini automobile insurance policy pursuant to section 4 of P.L. , c. (C. )(now before the Legislature as this bill) applies.
The tort option provisions of subsections a. [and] , b. and c. of this section shall apply to automobile insurance policies issued or renewed [prior to] on or after the effective date of P.L. , c. (C. )(now before the Legislature as this bill).
For purposes of subsection a. of this section, the issue of whether an injured person has suffered serious impairment of body function or permanent serious disfigurement is a question of law for the court if the court finds either of the following:
(1) There is no factual dispute concerning the nature and extent of the person's injuries; or
(2) There is a factual dispute concerning the nature and extent of the person's injuries, but the dispute is not material to the determination as to whether the person has suffered a serious impairment of body function or permanent serious disfigurement. However, for a closed-head injury, a question of fact for the jury is created if a licensed allopathic or osteopathic physician who regularly diagnoses or treats closed-head injuries testifies under oath that there may be a serious neurological injury.
(cf: P.L.1997, c. , s. )
13. Section 14.1 of P.L.1983, c.362 (C.39:6A-8.1) is amended to read as follows:
14.1 Election of tort option. a. Election of a tort option pursuant to section 8 of P.L.1972, c.70 (C.39:6A-8) shall be in writing and signed by the named insured on the coverage selection form required by section 17 of P.L.1983, c.362 (C.39:6A-23). The form shall state the percentage difference in the premium rates or the dollar savings [between] among the [two] three tort options. The tort option elected shall apply to the named insured and any immediate family member residing in the named insured's household. "Immediate family member" means the spouse of the named insured and any child of the named insured or spouse residing in the named insured's household, who is not a named insured under another automobile insurance policy.
b. [If the named insured fails to elect, in writing, any of the tort options offered pursuant to section 8 of P.L.1972, c.70 (C.39:6A-8), the named insured shall be deemed to elect the tort option of subsection a. of that section 8.] If a named insured of an automobile insurance policy issued prior to the effective date of P.L. , c. (C. )(now before the Legislature as this bill) has a tort option provided in subsection a. or b. of section 8 of P.L.1972, c.70 (C.39:6A-8) in effect for automobile insurance policies issued or renewed prior to the effective date of P.L. , c. (C. )(now before the Legislature as this bill), and fails to elect, in writing, any of the tort options offered pursuant to section 8 of P.L.1972, c.70 (C.39:6A-8) in effect for automobile insurance policies issued or renewed on or after the effective date of P.L. , c. (C. )(now before the Legislature as this bill), the tort option in subsection a. of section 8 of P.L.1972, c.70 (C.39:6A-8) in effect for automobile insurance policies issued or renewed on or after the effective date of P.L. , c. (C. )(now before the Legislature as this bill) shall apply to that policy if the tort option under that policy was subsection a. of section 8 of P.L.1972, c.70 (C.39:6A-8) in effect for automobile insurance policies issued or renewed prior to the effective date of P.L. , c. (C. )(now before the Legislature as this bill), and the tort option in subsection c. of 8 of P.L.1972, c.70 (C.39:6A-8) in effect for automobile insurance policies issued or renewed on or after the effective date of P.L. , c. (now before the Legislature as this bill) shall apply to that policy if the tort option under that policy was subsection b.of section 8 of P.L.1972, c.70 (C.39:6A-8) in effect for automobile insurance policies issued or renewed prior to the effective date of P.L. , c. (C. )(now before the Legislature as this bill). If a person is not a named insured of an automobile insurance policy on the day prior to the effective date of P.L. , c. (C. )(now before the Legislature as this bill) and fails to elect, in writing, any of the tort options offered pursuant to section 8 of P.L.1972, c.70 (C.39:6A-8) in effect for automobile insurance policies issued or renewed on or after the effective date of P.L. , c. (C. )(now before the Legislature as this bill), the tort option in subsection a. of section 8 of P.L.1972, c.70 (C.39:6A-8) in effect for automobile insurance policies issued or renewed on or after the effective date of P.L. , c. (C. )(now before the Legislature as this bill) shall apply to the named insured's policy. Upon the first renewal of an automobile insurance policy following the effective date of P.L. , c. (C. )(now before the Legislature as this bill), every insurer shall notify every insured, by separate notice, that they have the right to elect the tort threshold established pursuant to subsection a. of section 8 of P.L.1972, c.70 (C.39:6A-8) which was in effect for policies issued or renewed prior to the effective date of P.L. , c. (C. )(now before the Legislature as this bill), stating the benefits conferred by that threshold and any premium differential applicable to the threshold.
c. The tort option elected by a named insured for an automobile policy issued or renewed on or after [January 1, 1989] the effective date of P.L. , c. (C. )(now before the Legislature as this bill) shall continue in force as to subsequent renewal or replacement policies until the insurer or its authorized representative receives a properly executed form electing [the other] another tort option.
d. The tort option elected by the named insured shall apply to all automobiles owned by the named insured and to any immediate family member who is not a named insured under another automobile insurance policy, except that in the case where more than one policy is applicable to the named insured or immediate family member, and the policies have different tort options, the tort option elected by the injured named insured shall apply or, in the case of an immediate family member who is not a named insured and is injured in an accident involving an automobile to which a policy issued to a named insured in the household of the injured immediate family member applies, the tort option elected by that named insured shall apply.
e. Notwithstanding any other provision of law to the contrary, no person, including, but not limited to, an insurer, an insurance producer as defined in section 2 of P.L.1987, c.293 (C.17:22A-2), a servicing carrier or non-insurer servicing carrier acting in that capacity pursuant to P.L.1983, c.65 (C.17:30E-1 et seq.), and the New Jersey Automobile Full Insurance Underwriting Association created pursuant to P.L.1983, c.65 (C.17:30E-1 et seq.), shall be liable in an action for damages on account of the election of a tort option by a named insured [or] , on account of the tort option imposed pursuant to subsection b. of this section or otherwise imposed by law or on account of the election by the named insured to purchase a mini automobile insurance policy pursuant to section 4 of P.L. , c. (C. )(now before the Legislature as this bill). Nothing in this subsection shall be deemed to grant immunity to any person causing damage as the result of his willful, wanton or grossly negligent act of commission or omission.
[In the case of automobile insurance policies in force on January 1, 1989, notice] Notice of the tort options available pursuant to [the aforesaid] section 8 of P.L.1972, c.70 (C.39:6A-8) shall be given in accordance with section 17 of P.L.1983, c.362 (C.39:6A-23).
(cf: P.L.1988, c.119, s.7)
14. Section 20 of P.L.1983, c.362 (C.39:6A-9.1) is amended to read as follows:
20. An insurer, health maintenance organization or governmental agency paying benefits pursuant to subsection a., b. or d. of section 13 of P.L.1983, c.362 (C.39:6A-4.3) or personal injury protection benefits in accordance with section 4 or section 10 of P.L.1972, c.70 (C.39:6A-4 or 39:6A-10) or medical expense benefits pursuant to section 4 of P.L. , c. (C. )(now before the Legislature as this bill), as a result of an accident occurring within this State, shall, within two years of the filing of the claim, have the right to recover the amount of payments from any tortfeasor who was not, at the time of the accident, required to maintain personal injury protection or medical expense benefits coverage, other than for pedestrians, under the laws of this State, including personal injury protection coverage required to be provided in accordance with section 18 of P.L.1985, c.520 (C.17:28-1.4), or although required did not maintain personal injury protection or medical expense benefits coverage at the time of the accident. In the case of an accident occurring in this State involving an insured tortfeasor, the determination as to whether an insurer, health maintenance organization or governmental agency is legally entitled to recover the amount of payments and the amount of recovery, including the costs of processing benefit claims and enforcing rights granted under this section, shall be made against the insurer of the tortfeasor, and shall be by agreement of the involved parties or, upon failing to agree, by arbitration.
(cf: P.L.1990, c.8, s.10)
15. Section 10 of P.L.1972, c.70 (C.39:6A-10) is amended to read as follows:
10. Additional personal injury protection coverage. Insurers shall make available to the named insured electing the standard automobile insurance policy and covered under section 4 of P.L.1972, c.70 (C.39:6A-4), and, at his option, to resident relatives in the household of the named insured, suitable additional first party coverage for income continuation benefits, essential services benefits, death benefits and funeral expense benefits, but the income continuation and essential services benefits shall cease upon the death of the claimant, and shall not operate to increase the amount of any death benefits payable under section 4 of P.L.1972, c.70 (C.39:6A-4) and such additional first party coverage shall be payable only to the extent that the claimant establishes that the amount of loss sustained exceeds the coverage specified in section 4 of P.L.1972, c.70 (C.39:6A-4). Insurers may also make available to named insureds holding a standard automobile insurance policy and covered under section 4 of P.L.1972, c.70 (C.39:6A-4), and, at their option, to resident relatives in the household of the named insured or to other persons provided medical expense benefits coverage pursuant to section 4 of P.L.1972, c.70 (C.39:6A-4), or both, additional first party medical expense [benefit] benefits coverage. The additional coverage shall be offered by the insurer at least annually as part of the coverage selection form applicable to the standard automobile insurance policy and required by section 17 of P.L.1983, c.362 (C.39:6A-23). Income continuation in excess of that provided for in section 4 [must] of P.L.1972, c.70 (C.39:6A-4) shall be provided as an option by insurers for disabilities, as long as the disability persists, at least up to an income level of [$35,000.00] $50,000.00 per year, provided that a. the excess between [$5,200.00] $10,400.00 and the amount of coverage contracted for shall be written on the basis of 75% of said difference, and b. regardless of the duration of the disability, the benefits payable shall not exceed the total maximum amount of income continuation benefits contracted for. Death benefits provided pursuant to this section shall be payable without regard to the period of time elapsing between the date of the accident and the date of death, if death occurs within two years of the accident and results from bodily injury from that accident to which coverage under this section applies. The Commissioner of Insurance is hereby authorized and empowered to establish, by rule or regulation, the amounts and terms of income continuation insurance to be provided pursuant to this section.
(cf: P.L.1990, c.8, s.11)
16. Section 11 of P.L.1972, c.70 (C.39:6A-11) is amended to read as follows:
11. Contribution among insurers. If two or more insurers are liable to pay benefits under sections 4 and 10 of [this act] P.L.1972, c.70 (C.39:6A-4 and 39:6A-10) under a standard automobile insurance policy or medical expense benefits under a mini automobile insurance policy pursuant to section 4 of P.L. , c. (C. )(now before the Legislature as this bill) for the same bodily injury, or death, of any one person, the maximum amount payable shall be as specified in those sections 4 [and] , 10 of P.L.1972, C.70 (C.39:6A-4 and 39:6A-10) and section 4 of P.L. , c. (C. )(now before the Legislature as this bill), respectively, if additional first party coverage applies and any insurer paying the benefits shall be entitled to recover from each of the other insurers, only by inter-company arbitration or inter-company agreement, an equitable pro-rata share of the benefits paid.
(cf: P.L.1972, c.70, s.11)
17. Section12 of P.L.1972, c.70 (C.39:6A-12) is amended to read as follows:
12. Inadmissibility of evidence of losses collectible under personal injury protection coverage. Except as may be required in an action brought pursuant to section 20 of P.L.1983, c.362 (C.39:6A-9.1), evidence of the amounts collectible or paid under a standard automobile insurance policy pursuant to sections 4 and 10 of P.L.1972, c.70 (C.39:6A-4 and 39:6A-10) and amounts collectible or paid for medical expense benefits under a mini automobile insurance policy pursuant to 4 of P.L. , c. (C. )(now before the Legislature as this bill), to an injured person, including the amounts of any deductibles, copayments or exclusions, including exclusions pursuant to subsection d. of section 13 of P.L.1983, c.362 (C.39:6A-4.3), otherwise compensated is inadmissible in a civil action for recovery of damages for bodily injury by such injured person.
The court shall instruct the jury that, in arriving at a verdict as to the amount of the damages for noneconomic loss to be recovered by the injured person, the jury shall not speculate as to the amount of the medical expense benefits paid or payable by an automobile insurer under personal injury protection coverage payable under a standard automobile insurance policy pursuant to sections 4 and 10 of P.L.1972, c.70 (C.39:6A-4 and 39:6A-11) or medical expense benefits under a mini automobile insurance policy pursuant to section 4 of P.L. , c. (C. )(now before the Legislature as this bill) to the injured person, nor shall they speculate as to the amount of benefits paid or payable by a health insurer, health maintenance organization or governmental agency under subsection d. of section 13 of P.L.1983, c.362 (C.39:6A-4.3).
Nothing in this section shall be construed to limit the right of recovery, against the tortfeasor, of uncompensated economic loss sustained by the injured party.
(cf: P.L.1990, c.8, s.12)
18. Section 13 of P.L.1972, c.70 (C.39:6A-13) is amended to read as follows:
13. Discovery of facts as to personal injury protection coverage. The following apply to personal injury protection coverage benefits payable under a standard automobile insurance policy pursuant to sections 4 and 10 of P.L.1972, c.70 (C.39:6A-4 and 39:6A-10) and medical expense benefits payable under a mini automobile insurance policy pursuant to section 4 of P.L. , c. (C. )(now before the Legislature as this bill):
a. Every employer shall, if a request is made by an insurer or the Unsatisfied Claim and Judgment Fund providing personal injury protection benefits under [this act] a standard automobile insurance policy or medical expense benefits payable under a mini automobile insurance policy against whom a claim has been made, furnish forthwith, in a form approved by the Commissioner of Banking and Insurance, a signed statement of the lost earnings since the date of the bodily injury and for a reasonable period before the injury, of the person upon whose injury the claim is based.
b. Every physician, hospital, [clinic or other medical institution] or other health care provider providing, before and after the bodily injury upon which a claim for personal injury protection benefits or medical expense benefits is based, any products, services or accommodations in relation to such bodily injury or any other injury, or in relation to a condition claimed to be connected with such bodily injury or any other injury, shall, if requested to do so by the insurer or the Unsatisfied Claim and Judgment Fund against whom the claim has been made, furnish forthwith a written report of the history, condition, treatment, dates and costs of such treatment of the injured person, and produce forthwith and permit the inspection and copying of his or its records regarding such history, condition, treatment dates and costs of treatment. The person requesting such records shall pay all reasonable costs connected therewith.
c. The injured person shall be furnished upon demand a copy of all information obtained by the insurer or the Unsatisfied Claim and Judgment Fund under the provisions of this section, and shall pay a reasonable charge, if required by the insurer and the Unsatisfied Claim and Judgment Fund.
d. [Whenever] Except for medical expense benefits provided under a standard automobile insurance policy pursuant to subsection a. of section 4 of P.L.1972, c.70 (C.39:6A-4), under a mini automobile insurance policy pursuant to subsection b. of section 4 of P.L. , c. (C. )(now before the Legislature as this bill), under subsection a. of section 7 of P.L.1972, c.198 (C.39:6-86.1) and additional first party medical expense benefits coverage provided under a standard automobile insurance policy pursuant to section 10 of P.L.1972, c.70 (C.39:6A-10), if there is no dispute concerning whether the treatments, health care services or durable medical goods related to an injury for which reimbursement is being sought are causally related to an insured event, whenever the mental or physical condition of an injured person covered by personal injury protection under a standard automobile insurance policy or medical expense benefits under a mini automobile insurance policy is material to any claim that has been or may be made for such past or future personal injury protection benefits or medical expense benefits, such person shall, upon request of an insurer or the Unsatisfied Claim and Judgment Fund submit to mental or physical examination [by a physician or physicians , or chiropractor or chiropractors. Only a licensed chiropractor may determine the clinical need for further chiropractic treatment by performing a chiropractic examination and this determination shall not depend solely upon a review of the treating chiropractor patient records in cases of denial of benefits] conducted by a provider of health care services licensed in this State in the same profession or speciality as the provider of health care services whose services are subject to review under this section and who is located within a reasonable proximity to the injured person's residence. The injured person shall provide or make available to the provider any pertinent medical records or medical history that the provider deems necessary to the examination. The costs of any examinations requested by an insurer or the Unsatisfied Claim and Judgment Fund shall be borne entirely by whomever makes such request. Such examination shall be conducted within the municipality of residence of the injured person. If there is no qualified [physician or chiropractor] provider of health care services to conduct the examination within the municipality of residence of the injured person, then such examination shall be conducted in an area of the closest proximity to the injured person's residence. [Personal protection insurers] Insurers providing personal injury protection coverage under a standard automobile insurance policy or medical expense benefits under a mini automobile insurance policy are authorized to include reasonable provisions [in personal injury protection coverage policies for mental and physical examinations of] requiring those claiming personal injury protection coverage benefits or medical expense benefits to submit to mental or physical examination as requested by an insurer or the Unsatisfied Claim and Judgment Fund pursuant to the provisions of this section. Failure to submit to a mental or physical examination requested by an insurer or the Unsatisfied Claim and Judgment Fund pursuant to the provisions of this section shall subject the injured person to certain limitations in coverage as specified in regulations promulgated by the commissioner.
e. If requested by the person examined, a party causing an examination to be made, shall deliver to him a copy of every written report concerning the examination rendered by an examining [physician or chiropractor] provider of health care services, at least one of which reports must set out his findings and conclusions in detail. After such request and delivery, the party causing the examination to be made is entitled upon request to receive from the person examined every written report available to him, or his representative, concerning any examination, previously or thereafter made of the same mental or physical condition.
f. The injured person, upon reasonable request by the insurer or the Unsatisfied Claim and Judgment Fund shall sign all forms, authorizations [,] or releases for information, approved by the Commissioner of Banking and Insurance, which may be necessary to the discovery of the above facts, in order to reasonably prove the injured person's losses.
g. In the event of any dispute regarding an insurer's or the Unsatisfied Claim and Judgment Fund's or an injured person's right as to the discovery of facts about the injured person's earnings or about his history, condition, treatment, dates and costs of such treatment, or the submission of such injured person to a mental or physical examination subject to the provisions of this section, the insurer, Unsatisfied Claim and Judgment Fund or the injured person may petition a court of competent jurisdiction for an order resolving the dispute and protecting the rights of all parties. The order may be entered on motion for good cause shown giving notice to all persons having an interest therein. Such court may protect against annoyance, embarrassment or oppression and may as justice requires, enter an order compelling or refusing discovery, or specifying conditions of such discovery; the court may further order the payment of costs and expenses of the proceeding, as justice requires.
(cf: P.L.1993, c.186, s.1)
19. Section 11 of P.L.1972, c.203 (C.39:6A-13.1) is amended to read as follows:
11. a. Every action for the payment of benefits [set forth in] payable under a standard automobile insurance policy pursuant to sections 4 and 10 of [this act] P.L.1972, c.70 (C.39:6A-4 and 39:6A-10) or medical expense benefits payable under a mini automobile insurance policy pursuant to section 4 of P.L. , c. (C. )(now before the Legislature as this bill), except an action by a decedent's estate, shall be commenced not later than [2] two years after the injured person or survivor suffers a loss or incurs an expense and either knows or in the exercise of reasonable diligence should know that the loss or expense was caused by the accident, or not later than [4] four years after the accident whichever is earlier, provided, however, that if benefits have been paid before then an action for further benefits may be commenced not later than [2] two years after the last payment of benefits.
b. Every action by a decedent's estate for the payment of benefits [set forth in] provided under a standard automobile insurance policy pursuant to sections 4 and 10 of [this act] P.L.1972, c.70 (C.39:6A-4 and 39:6A-10) or medical expense benefits provided under a mini automobile insurance policy pursuant to section 4 of P.L. , c. (C. )(now before the Legislature as this bill) shall be commenced not later than [2] two years after death or [4] four years after the accident from which death results, whichever is earlier, provided, however, that if benefits had been paid to the decedent prior to his death then an action may be commenced not later than [2] two years after his death or [4] four years after the last payment of benefits, whichever is earlier, provided, further, that if the decedent's estate has received benefits before then an action for further benefits shall be commenced not later than [2] two years from the last payment of benefits.
(cf: P.L.1972, c.203, s.11)
20. Section 15 of P.L.1972, c.70 (C.39:6A-15) is amended to read as follows:
15. In any claim or action arising for benefits payable under a standard automobile insurance policy under section 4 of [this act] P.L.1972, c.70 (C.39:6A-4) or any claim or action arising for medical expense benefits payable under a mini automobile insurance policy under section 4 of P.L. , c. (C. )(now before the Legislature as this bill) wherein any person [,] obtains or attempts to obtain from any other person, insurance company or Unsatisfied Claim and Judgment Fund any money or other thing of value by (1) falsely or fraudulently representing that such person is entitled to such benefits [under section 4] or, (2) falsely and fraudulently making statements or presenting documentation in order to obtain or attempt to obtain such benefits [under section 4] or, (3) cooperates, conspires or otherwise acts in concert with any person seeking to falsely or fraudulently obtain, or attempt to obtain, such benefits [under section 4] may upon conviction be fined not more than $5,000.00, or imprisoned for not more than [3] three years or both, or in the event the sum so obtained or attempted to be obtained is not more than $500.00, may upon conviction, be fined not more than $500.00, or imprisoned for not more than [6] six months or both, as a disorderly person.
In addition to any penalties imposed by law, any person who is either found by a court of competent jurisdiction to have violated any provision of P.L.1983 c.320 (C.17:33A-1 et seq.) pertaining to automobile insurance or been convicted of any violation of Title 2C of the New Jersey Statutes arising out of automobile insurance fraud shall not operate a motor vehicle over the highways of this State for a period of one year from the date of judgment or conviction.
(cf: P.L.1997, c.151, s.9)
21. Section 16 of P.L.1983, c.362 (C.39:6A-22) is amended to read as follows:
16. Powers of exchange. a. The exchange shall be empowered to raise sufficient moneys (1) to pay its operating expenses, and (2) to compensate members of the exchange for claims paid for noneconomic loss, and associated claim adjustment expenses, which would not have been incurred had the tort limitation option provided in [subsection b. of section 8 of P.L.1972, c.70 (C.39:6A-8) or, in the case of policies issued or renewed on or after January 1, 1989,] subsection a. of section 8 of P.L.1972, c.70 (C.39:6A-8) in effect for automobile insurance policies issued or renewed prior to the effective date of P.L. , c. (C. )(now before the Legislature as this bill), been elected; or in the case of policies issued or renewed on or after the effective date of P.L. , c. (C. )(now before the Legislature as this bill), subsection a. of section 8 of P.L.1972, c.70 (C.39:6A-8) in effect for automobile insurance policies issued or renewed on or after the effective date of P.L. , c. (C. )(now before the Legislature as this bill), been elected, by the injured party filing the claim for noneconomic loss.
b. In order to enable the exchange to meet its obligations under subsection a. of this section, every member insurer or servicing carrier of the New Jersey Automobile Full Insurance Underwriting Association shall forward on a monthly basis, within 15 days of the close of the member's accounting month, a charge, to be known as the AIRE charge, in an amount and manner to be prescribed by the board of directors.
AIRE charge amounts required to be paid to the exchange in accordance with this subsection shall, in the case of those amounts determined by the board of directors to be applicable during the period from July 1, 1984 to the effective date of P.L.1985, c.520, be paid to the exchange within 60 days of that date.
A 10% per annum penalty charge shall be assessed by the exchange on any overdue AIRE charges.
c. The board of directors shall establish guidelines by which members or servicing carriers and the exchange may verify the tort limitation options elected by claimants.
d. Moneys collected by or otherwise available to the exchange shall be invested as hereinafter provided in section 12 of P.L.1985, c.520 (C.39:6A-22.1).
e. The exchange shall have such powers as may be necessary or appropriate to effectuate the purposes of the exchange.
(cf: P.L.1988,c.119,s.31)
22. Section 1 of P.L.1972, c.197 (39:6B-1) is amended to read as follows:
1. a. Every owner or registered owner of a motor vehicle registered or principally garaged in this State shall maintain motor vehicle liability insurance coverage, under provisions approved by the Commissioner of Banking and Insurance, insuring against loss resulting from liability imposed by law for bodily injury, death and property damage sustained by any person arising out of the ownership, maintenance, operation or use of a motor vehicle wherein such coverage shall be at least in: [a.] (1) an amount or limit of $15,000.00, exclusive of interest and costs, on account of injury to, or death of, one person, in any one accident; and [b.] (2) an amount or limit, subject to such limit for any one person so injured or killed, of $30,000.00, exclusive of interest and costs, on account of injury to or death of, more than one person, in any one accident; and [c.] (3) an amount or limit of $5,000.00, exclusive of interest and costs, for damage to property in any one accident.
b. Notwithstanding the provisions of subsection a. of this section, an owner or registered owner of an automobile, as defined in section 2 of P.L.1972, c.70 (C.39:6A-2), registered or primarily garaged in the State may satisfy the requirements of subsection a. of this section by maintaining a mini automobile insurance policy pursuant to section 4
of P.L. , c. (C. )(now before the Legislature as this bill).
(cf: P.L.1972, c.197, s.1)
23. Section 2 of P.L.1968, c.385 (C.17:28-1.1) is amended to read as follows:
2. a. [No] Except for a standard automobile insurance policy and mini automobile insurance policy, no motor vehicle liability policy or renewal of such policy of insurance, [including a liability policy for an automobile as defined in section 2 of P.L.1972, c.70 (C.39:6A-2),] insuring against loss resulting from liability imposed by law for bodily injury or death, sustained by any person arising out of the ownership, maintenance or use of a motor vehicle, shall be issued in this State with respect to any motor vehicle registered or principally garaged in this State unless it includes basic uninsured motorist coverage [in limits] for bodily injury or death [as follows:] as provided in this subsection. The coverage provided in this subsection shall be offered as an option by an insurer to every named insured electing a standard automobile insurance policy or mini automobile insurance policy.
Basic uninsured motorist coverage shall include:
(1) an amount or limit of $15,000.00, exclusive of interest and costs, on account of injury to, or death of, one person, in any one accident, and
(2) an amount or limit, subject to such limit for any one person so injured or killed, of $30,000.00, exclusive of interest and costs, on account of injury to or death of more than one person, in any one accident,
under provisions approved by the Commissioner of Banking and Insurance, for payment of all or part of the sums which the insured or his legal representative shall be legally entitled to recover as damages from the operator or owner of an uninsured motor vehicle, or hit and run motor vehicle, as defined in section 18 of P.L.1952, c.174 (C.39:6-78), because of bodily injury, sickness or disease, including death resulting therefrom, sustained by the insured, caused by accident and arising out of the ownership, maintenance, operation or use of such uninsured or hit and run motor vehicle anywhere within the United States or Canada [; except that uninsured motorist coverage shall provide that in order to recover for non-economic loss, as defined in section 2 of P.L.1972, c.70 (C.39:6A-2), for accidents to which the benefits of section 4 (C.39:6A-4) of that act apply, the tort option elected pursuant to section 8 (C.39:6A-8) of that act shall apply to that injured person].
All [motor vehicle liability policies] basic uninsured motorist coverage shall also include coverage for the payment of all or part of the sums which persons insured thereunder shall be legally entitled to recover as damages from owners or operators of uninsured motor vehicles, other than hit and run motor vehicles, because of injury to or destruction to the personal property of such insured, with a limit in the aggregate for all insureds involved in any one accident of $5,000.00, and subject, for each insured, to an exclusion of the first $500.00 of such damages.
b. (1) Uninsured and underinsured motorist coverage shall be provided as an option by an insurer to the named insured electing a standard automobile insurance policy or mini automobile insurance policy up to at least the following limits: $250,000.00 each person and $500,000.00 each accident for bodily injury; $100,000.00 each accident for property damage or $500,000.00 single limit, subject to an exclusion of the first $500.00 of such damage to property for each accident, except that the limits for uninsured and underinsured motorist coverage shall not exceed the insured's motor vehicle liability policy limits for bodily injury and property damage, respectively, except that uninsured and underinsured motorist coverage shall provide that in order to recover for non-economic loss, as defined in section 2 of P.L.1972, c.70 (C.39:6A-2), for accidents to which the benefits under a standard automobile insurance policy provided in section 4 of P.L.1972, c.70 (C.39:6A-4) or the medical expense benefits of a mini policy provided in section 4 of P.L. , c. (C. )(now before the Legislature as this bill) apply, the tort option elected or assigned pursuant to section 8 of P.L.1972, c.70 (C.39:6A-8) shall apply to that injured person.
(2) Uninsured and underinsured motorist coverage shall also be provided as an option by an insurer to the named insured for economic loss only in a single limit of not less than $5,000.00 and up to $250,000.00 for each accident, subject to an exclusion of the first $500.00 of damage to property.
Election of the coverages pursuant to this subsection shall be in writing and signed by the named insured on the coverage selection form required by section 17 of P.L.1983, c.362 (c.39:6A-23).
Rates for uninsured and underinsured motorist coverage for the same limits shall, for each filer, be uniform on a Statewide basis without regard to classification or territory.
c. Uninsured and underinsured motorist coverage provided for in this section shall not be increased by stacking the limits of coverage of multiple motor vehicles covered under the same policy of insurance nor shall these coverages be increased by stacking the limits of coverage of multiple policies available to the insured. If the insured had uninsured motorist coverage available under more than one policy, any recovery shall not exceed the higher of the applicable limits of the respective coverages and the recovery shall be prorated between the applicable coverages as the limits of each coverage bear to the total of the limits.
d. Uninsured and underinsured motorist coverage shall be subject to the policy terms, conditions and exclusions approved by the Commissioner of Banking and Insurance, including, but not limited to, unauthorized settlements, nonduplication of coverage, subrogation and arbitration.
e. For the purpose of this section, (1) for coverage provided pursuant to subsection a. and paragraph (1) of subsection b. of this section, "underinsured motorist coverage"means insurance for damages because of bodily injury and property damage resulting from an accident arising out of the ownership, maintenance, operation or use of an underinsured motor vehicle ; and for coverage provided pursuant to paragraph (2) of subsection b. of this section, "underinsured motorist coverage" means insurance for damages because of economic loss resulting from an accident arising out of the ownership, maintenance, operation or use of an underinsured motor vehicle. Underinsured motorist coverage shall not apply to an uninsured motor vehicle. A motor vehicle is underinsured when the sum of the limits of liability under all bodily injury and property damage liability bonds and insurance policies available to a person against whom recovery is sought for bodily injury or property damage is, at the time of the accident, less than the applicable limits for underinsured motorist coverage afforded under the motor vehicle insurance policy held by the person seeking that recovery. A motor vehicle shall not be considered an underinsured motor vehicle under this section unless the limits of all bodily injury liability insurance or bonds applicable at the time of the accident have been exhausted by payment of settlements or judgments. The limits of underinsured motorist coverage available to an injured person shall be reduced by the amount he has recovered under all bodily injury liability insurance or bonds;
(2) "uninsured motor vehicle" means:
(a) a motor vehicle with respect to the ownership, operation, maintenance, or use of which there is no bodily injury liability insurance or bond applicable at the time of the accident;
(b) a motor vehicle with respect to the ownership, operation, maintenance, or use of which there is bodily injury liability insurance in existence but the liability insurer denies coverage or is unable to make payment with respect to the legal liability of its insured because the insurer has become insolvent or bankrupt, or the Commissioner of Banking and Insurance has undertaken control of the insurer for the purpose of liquidation; or
(c) a hit and run motor vehicle as described in section 18 of P.L.1952, c.174 (C.39:6-78).
"Uninsured motor vehicle" shall not include an underinsured motor vehicle; a motor vehicle owned by or furnished for the regular use of the named insured or any resident of the same household; a self-insurer within the meaning of any financial responsibility or similar law of the state in which the motor vehicle is registered or principally garaged; a motor vehicle which is owned by the United States or Canada, or a state, political subdivision or agency of those governments or any of the foregoing; a land motor vehicle or trailer operated on rails or crawler treads; a motor vehicle used as a residence or stationary structure and not as a vehicle; or equipment or vehicles designed for use principally off public roads, except while actually upon public roads.
(cf: P.L.1988, c.119, s.11)
24. Section 2 of P.L.1952, c.174 (C.39:6-62) is amended to read as follows:
2. Definitions. As used in this act:
"Executive director" means the official designated by and serving at the pleasure of the commissioner to administer to and be in charge of the Unsatisfied Claim and Judgment Fund and who shall be responsible to the Unsatisfied Claim and Judgment Fund Board.
"Treasurer" means the State Treasurer of New Jersey acting as the custodian of the Unsatisfied Claim and Judgment Fund.
"Commissioner" means the Commissioner of Banking and Insurance.
"Unsatisfied Claim and Judgment Fund" or "Fund" means the fund derived from the sources specified in this act.
"Unsatisfied Claim and Judgment Fund Board" or "Board" means the board created in section 4 of this act.
"Qualified person" means a resident of this State or the owner of a motor vehicle registered in this State or a resident of another state, territory, or federal district of the United States or province of Canada or of a foreign country, in which recourse is afforded, to residents of this State, of substantially similar character to that provided for by this act; provided, however, that no person shall be a qualified person [where such person is an insured under a policy provision providing coverage for damages sustained by the insured as a result of the operation of an uninsured motor vehicle in a form authorized to be included in automobile liability policies of insurance delivered or issued for delivery in this State, pursuant to the provisions of, or any supplement to, chapter 28 of Title 17 of the Revised Statutes or in a form substantially similar thereto] who, at the time of the automobile accident resulting in damages to that person, is required to maintain personal injury protection coverage under a standard automobile insurance policy pursuant to section 4 of P.L.1972, c.70 (C.39:6A-4) or medical expense benefits under a mini automobile insurance policy pursuant to section 4 of P.L. , c. (C. )(now before the Legislature as this bill).
"Uninsured motor vehicle" means a motor vehicle as to which there is not in force a liability policy meeting the requirements of section 3, or 26 of the "Motor Vehicle Security-Responsibility Law," P.L.1952, c.173 (C.39:6-25 or C.39:6-48), and which is not owned by a holder of a certificate of self-insurance under said law.
"Person" includes natural persons, firms, copartnerships, associations and corporations.
"Insurer" means any insurer authorized in this State to write the kinds of insurance specified in paragraphs d. and e. of R.S.17:17-1.
"Net direct written premiums" means direct gross premiums written on policies, insuring against legal liability for bodily injury or death and for damage to property arising out of the ownership, operation or maintenance of motor vehicles, which are principally garaged in this State, less return premiums thereon and dividends paid to policyholders on such direct business.
"Registration license year" means the period beginning June 1, 1956, and ending May 31, 1957, and each subsequent 12 month period, beginning June 1 and ending the following May 31.
(cf: P.L.1985, c.148, s.3)
25. Section 7 of P.L.1972, c.198 (C.39:6-86.1) is amended to read as follows:
7. When any person qualified to receive payments under the provisions of the "Unsatisfied Claim and Judgment Fund Law" suffers bodily injury or death as a pedestrian, as defined in section 2 of P.L.1972, c.70 (C.39:6A-2), caused by a motor vehicle, including an automobile as defined in section 2 of P.L.1972, c.70 (C.39:6A-2), and a motorcycle, or by an object propelled therefrom, or arising out of an accident while occupying, entering into, alighting from, or using an automobile, registered or principally garaged in this State for which personal injury protection benefits under the "New Jersey Automobile Reparation Reform Act," P.L.1972, c.70 (C.39:6A-1 et seq.), or section 19 of P.L.1983, c.362 (C.17:28-1.3), would be payable to such person if personal injury protection coverage were in force and the damages resulting from such accident or death are not satisfied due to the personal injury protection coverage not being in effect with respect to such accident, then in such event the Unsatisfied Claim and Judgment Fund shall provide, under the following conditions, the following benefits:
a. Medical expenses benefits. Payment of all reasonable medical expense benefits in an amount not exceeding $250,000 per person per accident. In the event of death, payment shall be made to the estate of the decedent.
Medical expense benefit payments shall be subject to a deductible of $250.00 on account of injury in any one accident and a copayment of 20% of any benefits payable between $250.00 and $5,000.00.
b. Income continuation benefits. The payment of the loss of income of an income producer as a result of bodily injury disability, subject to a maximum weekly payment of [$100.00] $200.00. Such sums shall be payable during the life of the injured person and shall be subject to an amount or limit of [$5,200.00] $10,400.00, on account of injury to any one person in any one accident, except that in no case shall income continuation benefits exceed the net income normally earned during the period in which the benefits are payable.
c. Essential services benefits. Payment of essential services benefits to an injured person shall be made in reimbursement of necessary and reasonable expenses incurred for such substitute essential services ordinarily performed by the injured person for himself, his family and members of the family residing in the household, subject to an amount or limit of [$12.00] $20.00 per day. Such benefits shall be payable during the life of the injured person and shall be subject to an amount or limit of [$4,380.00] $6,300.00, on account of injury to any one person in any one accident.
d. Death benefits. In the event of the death of an income producer as a result of injuries sustained in an accident entitling such person to benefits under this section, the maximum amount of benefits which could have been paid to the income producer, but for his death, under subsection b. of this section shall be paid to the surviving spouse, or in the event there is no surviving spouse, then to the surviving children, and in the event there are no surviving spouse or surviving children, then to the estate of the income producer.
In the event of the death of one performing essential services as a result of injuries sustained in an accident entitling such person to benefits under subsection c. of this section, the maximum amount of benefits which could have been paid such person, under subsection c., shall be paid to the person incurring the expense of providing such essential services.
e. Funeral expenses benefits. All reasonable funeral, burial and cremation expenses, subject to a maximum benefit of [$1,000.00] $1,500.00, on account of the death to any one person in any one accident shall be payable to decedent's estate.
Provided, however, that no benefits shall be paid under this section unless the person applying for benefits has demonstrated that he is not disqualified by reason of the provisions of subsection (a), (c), (d) or (l) of section 10 of P.L.1952, c.174 (C.39:6-70), or any other provision of law.
(cf: P.L.1990, c.8, s.101)
26. Section 14 of P.L.1988, c.156 (C.17:29A-15.2) is amended to read as follows:
14. Notwithstanding any other provision of law to the contrary, the dollar amount of the commission paid to a producer for residual bodily injury coverage provided pursuant to section 8 of P.L.1972, c.70 (C.39:6A-8) shall be the same whether the named insured elects the tort option provided for in subsection a. [of that section or the tort option provided for in subsection] , b. or c. of that section. This section shall not apply to commissions on a mini automobile insurance policy issued pursuant to section 4 of P.L. , c. (C. )(now before the Legislature as this bill).
(cf: P.L.1988, c.156, s.14)
27. (New section) For the purposes of sections 27 through 40 of this amendatory and supplementary act:
"Commissioner" means the Commissioner of Banking and Insurance;
"Insurer" means an insurer or group of affiliated companies admitted or authorized to transact the business of private passenger automobile insurance in this State and the Unsatisfied Claim and Judgment Fund;
"Medically necessary" means that the treatment is consistent with the symptoms or diagnosis, and treatment of the injury: (1) is not primarily for the convenience of the injured person or provider; (2) is the most appropriate standard or level of service which is in accordance with standard protocols and standards of good practice, as recognized by the provider's professional organizations and licensing board; and (3) does not involve unnecessary or repeated diagnostic testing.
"Peer review organization" or "organization" means a group of health care providers licensed in New Jersey, or any peer review organization with which the Federal Health Care Financing Administration or the State contracts for medical review of Medicare or medical assistance services, which is certified by the commissioner pursuant to section 29 of this amendatory and supplementary act, or any independent health care review company certified by the commissioner to engage in unbiased peer review for the purpose of determining the medical necessity or appropriateness of treatment, services or durable medical goods provided to a person injured in an automobile accident to whom the medical expense benefits of personal injury protection coverage apply.
"Personal injury protection coverage" is that coverage provided for in sections 4 and 10 of P.L.1972, c.67 (C.39:6A-4 and 39:6A-10) or medical expense benefits provided under a mini automobile insurance policy pursuant to section 4 of P.L. , c. (C. )(now before the Legislature as this bill).
"Health care provider" or "provider" means those persons authorized to perform health care treatment or services pursuant to section 2 of P.L.1972, c.70 (C.39:6A-2) and shall include, but not be limited to: (1) a hospital or health care facility which is maintained by a state or any of its political subdivisions; (2) a hospital or health care facility licensed by the Department of Health and Senior Services; (3) other hospitals or health care facilities designated by the Department of Health and Senior Services to provide health care services, or other facilities, including facilities for radiology and diagnostic testing, freestanding emergency clinics or offices, and private treatment centers; (4) a nonprofit voluntary visiting nurse organization providing health care services other than in a hospital; (5) hospitals or other health care facilities or treatment centers located in other states; (6) physicians licensed to practice medicine and surgery; (7) licensed chiropractors; (8) licensed dentists; (9) licensed optometrists; (10) licensed pharmacists; (11) licensed chiropodists; (12) registered bio-analytical laboratories; (13) licensed psychologists and psychiatric social workers; (14) licensed marriage and family therapists; (15) licensed physical therapists; (16) certified nurse-midwives; (17) licensed health maintenance organizations; (18) licensed orthotists and prosthetists; and (19) providers of other health care services or supplies, including durable medical goods. "Provider" shall not include any practitioner of a religious faith, or any service performed on an emergency basis immediately subsequent to an accident.
28. (New section) The commissioner shall establish standards for the certification of peer review organizations, which shall include standards of performance formulated by the commissioner in consultation with the Commissioner of Health and Senior Services. The standards of performance shall set forth procedures which are reasonable and necessary to ensure a timely and impartial review of the medical necessity or appropriateness of treatments for injuries sustained in an automobile accident, a review of the use of other health care services reimbursable under personal injury protection coverage, and the necessity or appropriateness of the use of durable medical goods. The standards shall ensure the independence and fairness of the review process. The commissioner shall establish standards for the persons who are to conduct reviews, including standards with respect to credentials, experience, licensure, fees and confidentiality. No fee charged by a peer review organization shall be on a contingency basis. The standards shall include a requirement for the number of persons on a panel conducting a review, a requirement that all persons performing reviews are New Jersey licensed or certified health care providers, and a requirement that a panel contain sufficient representation of reviewers as to be able to judge not only the medical necessity and the appropriateness of a treatment, but also to assess the issue of causality.
29. (New section) The commissioner shall certify a peer review organization if the commissioner determines that the applicant: a. has the resources to comply with the standards of performance; b. has a sufficient number of qualified health care providers, by specialty, to perform the reviews; c. has a satisfactory procedure for maintaining the confidentiality of medical records; d. has procedures in effect to guarantee the fair and open exchange of information and records related to reviews between the provider and the organization; e. is not owned or controlled by an insurer; and f. has met any other requirements established by the commissioner. "Controlled by" means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise.
30. (New section) A peer review organization shall be granted certification for a period of five years and shall pay an annual fee to the commissioner as set forth by regulation of the commissioner. The commissioner shall undertake or cause to be undertaken performance audits of an organization's review procedure and its compliance with the standards of performance established by the commissioner. If, at any time, the commissioner determines that the organization no longer meets the standards required for initial certification, if the review procedures of the organization are not being carried out in an impartial and independent manner, or if the organization does not continue to meet the standards of performance established by the commissioner, the commissioner may, after notice and hearing, suspend or revoke the organization's certification. An organization shall submit an annual activity report to the commissioner, in accordance with regulations promulgated by the commissioner, by January 31 of each year.
31. (New section) a. A peer review organization shall utilize, in its review of health care providers, providers licensed in New Jersey in the same profession or specialty as the provider whose services are subject to review, or a person familiar with the use or application of a durable medical good, if appropriate. The organization shall establish and utilize written review procedures, which shall be filed with the commissioner. The organization shall conduct its reviews in accordance with the most recent professional protocols which are applicable to the treatment or service to be performed.
b. Every determination made by a peer review organization shall be in writing in accordance with regulations adopted by the commissioner, and shall cite specific findings based upon clinical criteria and consistent with written review procedures on file with the commissioner.
32. (New section) a. Upon the receipt of a bill for treatment or services from a provider, an insurer may, through the referring agency established pursuant to section 33 of this amendatory and supplementary act, refer a case to a peer review organization for a review of a treatment or course of treatments, health care services provided or to be provided, or a review of the necessity or suitability of durable medical goods which are provided or to be provided to a person injured in an automobile accident for which payment is sought under personal injury protection coverage.
b. The insurer may make a referral to a peer review organization for one or more of the following reasons: (1) if there is substantial evidence that the treatment being given for the injury or the services provided are not medically necessary; (2) if the treatment is not in accordance with the protocols, professional standards, and the commonly accepted medical practice of providers in the same health care discipline as the treating provider; (3) if the treatment is not consistent with the symptom or diagnosis of the injury; (4) if the treatment appears to be of a palliative, rather than restorative, nature; (5) if the treatment or health care service, including, but not limited to, diagnostic testing: (a) is not related to the injury sustained in the accident, or not required for the diagnosis, evaluation or confirmation of the injury; (b) is not required to assess the effectiveness of the treatment; or (c) if the treatment or health care service, including, but not limited to, diagnostic testing, is not performed by a person licensed or certified to perform such treatment, service or diagnostic testing; (6) if the treatment or health care services provided are not in accordance with the provisions of section 4 of P.L.1972, c.70 (C.39:6A-4) or section 4 of P.L. , c. (C. )(now before the Legislature as this bill), or the terms of the policy; (7) if there appears to have been unnecessary consultations by other health care providers; or (8) if medical procedures, treatment, or testing, which have been repeated, are not medically necessary. No matters regarding the amount or appropriateness of a provider's fee shall be referred to an organization by an insurer.
33. (New section) a. The commissioner shall contract with an independent entity, which is not affiliated with the State, an insurer or a peer review organization, to act as the referring agency to whom referrals shall be made pursuant to section 32 of this amendatory and supplementary act. The referring agency shall maintain a record of: (1) all referrals made by each insurer; (2) the reasons cited by the insurer for each referral; (3) all referrals submitted for reconsideration; and (4) the final disposition of each referral. The referring agency shall forward the referrals to a certified peer review organization on a random basis, so that there is a relatively equal apportionment among all peer review organizations. Referrals shall be made in such a manner so as not to disclose to the peer review organization the identity of the insurer, nor shall the identity of the insurer be disclosed to the organization. Referrals shall be forwarded to the organization by the referring agency within five business days of receipt. Compensation of the referring agency shall be funded by assessments on insurers transacting the business of automobile insurance in this State.
b. The referring agency shall notify the provider and the injured person to whom the treatment, health care service or durable medical good has been provided, or is to be provided, by certified mail, return receipt requested, within five business days of its referral to the peer review organization: (1) that the referral has been made to a peer review organization; (2) the specific treatment or services which are under review; (3) that payment for the specified treatment or service under review will be withheld by the insurer until a final determination is made by the peer review organization; and (4) that the treatment or health care service under review may not continue to be reimbursable after a determination is made by the peer review organization. Every referral by an insurer to the referring agency shall state specifically the treatment or treatments or health care services being referred for review, and the specific reason that the review is being requested, in accordance with the standards established pursuant to subsection b. of section 32 of this amendatory and supplementary act. Only the treatments or services cited by the insurer in the referral shall be the subject of the review. The injured person shall not be liable for payment for any treatments or health care services performed by a provider which are the subject of the review. The insurer shall remain liable for payment for any treatment or health care service which was performed or is being performed which is not the subject of a review.
c. With the approval of the commissioner, an insurer may require that certain types of durable medical goods be preapproved for payment by the insurer before they are purchased, rented or leased. The requirement for preapproval shall be included in the insurer's policy form, and the insured shall be notified separately of this requirement. In the event of a dispute as to the necessity of the purchase, rental or lease of durable medical goods, the insurer may refer the dispute to the referring agency for referral to a peer review organization for a determination. The organization shall review the proposed use of the durable medical goods, the condition of the injured person and the provider's prognosis for the condition of the injured person and may recommend, if the organization determines the durable medical goods to be medically necessary and appropriate, that the insurer provide payment for the purchase, rental or lease of the durable medical goods, as appropriate. For the purposes of this amendatory and supplementary act, "durable medical goods" shall not include any device used in emergency treatment subsequent to the accident, any device used in connection with the hospitalization of the injured person, or any device used in connection with surgery. An insurer may deny payment, in accordance with the terms of the policy, for any durable medical goods which are purchased, rented or leased by the injured person without a prescription by the provider.
d. Upon notification of a referral of a case which involves admission to a specialized hospital or medical facility, the provider may, within five days of the receipt of the notification, request an expedited review, through the referring agency, by the peer review organization as to the medical necessity or appropriateness of such admission. The organization shall make its determination within 10 days of the request for the expedited review.
e. If a peer review organization determines that the referral by the insurer is frivolous or that it does not meet the standards for referral established in section 32 of this amendatory and supplementary act, and that there are no substantial grounds for the referral, the organization shall deny the request for review and return the referral to the referring agency.
f. If: (1) a peer review organization has reason to believe that the provider, the injured person, or both, may be guilty of fraud, including, but not limited to, that treatment or services for which the insurer was billed were or may not have been actually performed, or that there was misrepresentation as to the nature of the injury; or (2) it has reason to believe that the provider may be guilty of malpractice or the treatment or service was provided by an unathorized or unqualified person, it shall refer the case to the commissioner, who shall refer the case to the Attorney General or the appropriate licensing board, or both, for an investigation.
34. (New section) a. When appropriate in the context of its review of challenged treatments, health care services or durable medical goods, a peer review organization may request and review a provider's projected treatment plan. If, in the course of its review, an organization questions whether the treatments, health care services or durable medical goods for which reimbursement is being sought are causally related to an insured event, the organization shall report to the insurer through the referring agency of its recommendations concerning any issue of causality. Such a recommendation shall not be determinative. An insurer may deny payment for the treatment, health care service or durable medical goods on the ground that the treatment, health care service or durable medical goods for which reimbursement is sought is not causally related to the insured event.
b. Upon the request of the peer review organization performing a review, a provider whose treatment or services are the subject of the review shall furnish a written report of the history, condition and treatment dates, or the dates services were performed, and shall produce and permit the inspection and copying of the records. The insurer shall reimburse the provider for all reasonable costs in connection with the production of documents. A provider whose treatments, services or prescription for durable medical goods are the subject of a review may request, and shall be granted expeditiously, an opportunity to discuss his treatments or treatment plans with the organization conducting the review. A provider shall produce the information in a timely manner. If the information is withheld, or not provided in a timely manner, the peer review organization may recommend that payment for any continuing treatment or services under review be suspended by the insurer.
c. In any dispute which arises in connection with the review regarding discovery of facts about the injured person's history, condition and treatment dates, or a dispute relative to a mental or physical examination of the injured person, any party to the dispute may petition a court, of competent jurisdiction for an order resolving the dispute. The order may be entered on motion for good cause shown giving notice to all persons having an interest therein. The court may protect against annoyance, embarrassment or oppression of any party and may, as justice requires, enter an order compelling or refusing discovery, or specifying conditions of that discovery. The court may further order the payment of costs and expenses of the proceeding, as justice requires.
35. (New section) The peer review organization shall, except in the case of an expedited review pursuant to subsection d. of section 33 of this amendatory and supplementary act, complete its review and make a determination within 20 business days of receipt of all requested information from the provider, as provided for in subsection b. of section 34 of this amendatory and supplementary act, except that the time period may be extended no more than 10 days if a request by the provider to discuss his treatment or treatment plan with the organization cannot be honored within the 20-day period.
b. The organization shall submit its determination in writing, in accordance with procedures provided for in subsection b. of section 31 of this amendatory and supplementary act, to the referring agency, who shall, within three business days, forward a copy to the insurer, the provider and the injured person for whom the reimbursement is claimed by certified mail, return receipt requested. The insurer shall act on the organization's initial determination to make payment or to deny treatment within seven business days of that determination.
36. (New section) An insurer, provider or injured person may request a reconsideration of the peer review organization's initial determination by notifying the referring agency by certified mail within seven business days of receipt of the determination. The referring agency shall forward the determination and the accompanying documentation to a peer review organization other than the organization which conducted the initial review. The peer review organization conducting the reconsideration shall afford the requesting party an opportunity to discuss the case with the organization and to file any additional information which was not available at the time of the initial review.
37. (New section) The peer review organization performing the reconsideration may base its determination on information from the initial determination, other information in the records, or additional evidence submitted by the requesting party and shall complete the reconsideration within 10 days of the receipt of requested information, unless otherwise agreed to by all parties. The organization shall forward its determination to the referring agency, which shall forward it to the insurer, the provider and the injured person, by certified mail, return receipt requested, within five business days of the receipt of the findings of the organization conducting the reconsideration. The cost of the reconsideration shall be borne by the requesting party if the party is the insurer or the provider, or shall be borne by any other party requesting the reconsideration if other than the injured person.
38. (New section) a. When appropriate, and if provided for in the policy form issued by the insurer, a peer review organization conducting an initial review or an organization conducting a reconsideration of an initial determination may request an injured person to submit to a mental or physical examination by an independent health care provider, who shall be selected by the organization and who is (1) not affiliated with either the peer review organization requesting the examination or the insurer; (2) licensed in New Jersey in the same profession or specialty as the provider whose services are the subject of the review; and (3) located within reasonable proximity to the injured person's residence or place of work.
b. The injured person shall provide or make available to the independent provider any pertinent medical records or medical history that the independent provider determines to be necessary to the examination. The identity of the independent provider shall not be made known to the insurer or the provider whose treatment or services are the subject of the review. The costs of an examination by an independent provider requested by a peer review organization shall be borne by the insurer. The policy form may contain a provision, to be approved by the commissioner, that failure to submit to a mental or physical examination requested by a peer review organization pursuant to this amendatory and supplementary act shall subject the injured person to limitations in coverage as set forth in the policy form. In the case of personal injury protection medical expense benefits payable by the Unsatisfied Claim and Judgment Fund, the commissioner may promulgate rules and regulations governing the failure of an injured person to submit to a mental or physical examination requested by a peer review organization pursuant to this section.
39. (New section) a. If a peer review organization determines that the treatment or service, or a portion thereof, was medically necessary or appropriate, or that certain durable medical goods are necessary or appropriate, given the injuries sustained, the insurer shall pay the provider or injured person, as appropriate, the outstanding amount for that treatment, service or a portion thereof, or for the rental, lease or purchase of the durable medical goods, as appropriate.
b. If a peer review organization determines that a health care provider provided unnecessary or inappropriate treatments or services, or that durable medical goods already purchased, rented or leased were not necessary, the provider or injured person, as appropriate, shall not be reimbursed by the insurer for that treatment, service or durable medical good.
c. Within 30 days of the date of notification of an initial determination or a determination made by a peer review organization as the result of a reconsideration, an insurer, provider or injured person may seek review of the dispute by the Superior Court, Law Division. The determination of the peer review organization shall be presumed to be correct and shall be admissible as evidence at trial upon the request of any party involved in the peer review organization's review. A presumption under this section may be rebutted in an appropriate action only by a preponderance of the evidence presented to the court showing that the peer review organization's determination was erroneous. Neither the insurer nor the provider, as the case may be, shall be required to pay any amount in dispute until the judicial proceeding is concluded. A provider shall not bill an injured person to which the provisions of this section apply for any medical treatment or health care service which is the subject of a judicial proceeding.
40. (New section) The data maintained by the referring agency shall be made available to the commissioner, who shall monitor the operation of the peer review system to ensure compliance with the provisions of this amendatory and supplementary act. If the commissioner determines that an insurer has established a pattern of referring cases for review in a manner which is frivolous, making referrals which are not in accordance with the standards set forth in subsection b. of section 32 of this amendatory and supplementary act, which results in a disproportionately high number of claims to be rejected by a peer review organization pursuant to subsection e. of section 33 of this amendatory and supplementary act, or which applies for an excessive number of reconsiderations of initial determinations made by peer review organizations, the commissioner may, after notice and hearing, fine the insurer not less than $5,000 nor more than $10,000, or suspend or revoke the insurer's right to refer cases, or both.
41. Section 5 of P.L.1972, c.70 (C.39:6A-5) is amended to read as follows:
5. Payment of personal injury protection coverage benefits.
a. An insurer may require written notice to be given as soon as practicable after an accident involving an automobile with respect to which the policy affords personal injury protection coverage benefits payable under a standard automobile insurance policy pursuant to section 4 of P.L.1972, c.70 (C.34:6A-4) or medical expense benefits payable under a mini automobile insurance policy pursuant to [this act] section 4 of P.L. , c. (C. )(now before the Legislature as this bill). In the case of claims for medical expense benefits under either policy, written notice shall be provided to the insurer by the treating medical provider no later than 21 days following the commencement of treatment. Notification required under this section shall be made in accordance with regulations adopted by the Commissioner of Banking and Insurance and on a form prescribed by the Commissioner of Banking and Insurance. Within a reasonable time after receiving notification required pursuant to this act, the insurer shall confirm to the treating medical provider that its policy affords the claimant personal injury protection coverage benefits as required by section [5] 4 of P.L.1972, c.70 [(C.39:6A-5)] (C.39:6A-4) or medical expense benefits pursuant to section 4 of P.L. , c. (C. )(now before the Legislature as this bill).
b. For the purposes of this section, notification shall be deemed to be met if a treating medical provider submits a bill or invoice to the insurer for reimbursement of services within 21 days of the commencement of treatment.
c. In the event that notification is not made by the treating medical provider within 21 days following the commencement of treatment, the insurer shall reserve the right to deny, in accordance with regulations established by the Commissioner of Banking and Insurance, payment of the claim and the treating medical provider shall be prohibited from seeking any payment directly from the insured. In establishing the standards for denial of payment, the Commissioner of Banking and Insurance shall consider the length of delay in notification, the severity of the treating medical provider's failure to comply with the notification provisions of this act based upon the potential adverse impact to the public and whether or not the provider has engaged in a pattern of noncompliance with the notification provisions of this act. In establishing the regulations necessary to effectuate the purposes of this subsection, the Commissioner of Banking and Insurance shall define specific instances where the sanctions permitted pursuant to this subsection shall not apply. Such instances may include, but not be limited to, a treating medical provider's failure to provide notification to the insurer as required by this act due to the insured's medical condition during the time period within which notification is required.
d. A medical provider who fails to notify the insurer within 21 days and whose claim for payment has been denied by the insurer pursuant to the standards established by the Commissioner of Banking and Insurance may, in the discretion of a judge of the Superior Court, be permitted to refile such claim provided that the insurer has not been substantially prejudiced thereby. Application to the court for permission to refile a claim shall be made within 14 days of notification of denial of payment and shall be made upon motion based upon affidavits showing sufficient reasons for the failure to notify the insurer within the period of time prescribed by this act.
e. For the purposes of this section, "treating medical provider" shall mean any licensee of the State of New Jersey whose services are reimbursable under personal injury protection coverage pursuant to section 4 of P.L.1972, c.70 (C.39:6A-4) or medical expense benefits pursuant to section 4 of P.L. , c. (C. )(now before the Legislature as this bill), including, but not limited to, persons licensed to practice medicine and surgery, psychology, chiropractic, or such other professions as the Commissioner of Banking and Insurance determines pursuant to regulation, or other licensees similarly licensed in other states and nations, or the practitioner of any religious method of healing, or any general hospital, mental hospital, convalescent home, nursing home or any other institution, whether operated for profit or not, which maintains or operates facilities for health care, whose services are compensated under personal injury protection insurance proceeds.
f. In instances when multiple treating medical providers render services in connection with emergency care, the Commissioner of Banking and Insurance shall designate, through regulation, a process whereby notification by one treating medical provider to the insurer shall be deemed to meet the notification requirements of all the treating medical providers who render services in connection with emergency care.
g. Personal injury protection coverage benefits pursuant to section 4 of P.L.1972, c.70 (C.39:6A-4) and medical expense benefits pursuant to section 4 of P.L. , c. (C. )(now before the Legislature as this bill) shall be overdue if not paid within 60 days after the insurer is furnished written notice of the fact of a covered loss and of the amount of same. If such written notice is not furnished to the insurer as to the entire claim, any partial amount supported by written notice is overdue if not paid within 60 days after such written notice is furnished to the insurer. Any part or all of the remainder of the claim that is subsequently supported by written notice is overdue if not paid within 60 days after such written notice is furnished to the insurer; provided, however, that any payment shall not be deemed overdue where, within 60 days of receipt of notice of the claim, the insurer notifies the claimant or his representative in writing of the denial of the claim or the need for additional time, not to exceed 45 days, to investigate the claim, and states the reasons therefor. The written notice stating the need for additional time to investigate the claim shall set forth the number of the insurance policy against which the claim is made, the claim number, the address of the office handling the claim and a telephone number, which is toll free or can be called collect, or is within the claimant's area code. Written notice to the referring agency for a referral to a peer review organization pursuant to section 32 of P.L. , c. (C. )(now before the Legislature as this bill) shall satisfy the notice request for additional time to investigate a claim pursuant to this subsection. For the purpose of determining interest charges in the event the injured party prevails in a subsequent proceeding where an insurer has elected a 45-day extension pursuant to this subsection, payment shall be considered overdue at the expiration of the 45-day period or, if the injured person was required to provide additional information to the insurer, within 10 business days following receipt by the insurer of all the information requested by it, whichever is later.
For the purpose of calculating the extent to which any benefits are overdue, payment shall be treated as being made on the date a draft or other valid instrument which is equivalent to payment was placed in the United States mail in a properly addressed, postpaid envelope, or, if not so posted, on the date of delivery.
h. All overdue payments shall bear interest at the percentage of interest prescribed in the Rules Governing the Courts of the State of New Jersey for judgments, awards and orders for the payment of money.
i. All automobile insurers and the Unsatisfied Claim and Judgment Fund shall provide any claimant with the option of submitting a dispute [under this section] to binding arbitration if the dispute arose pursuant to the following provisions: subsections b., c., d. and e. of section 4 of P.L.1972, c.70 (C.39:6A-4); subsection b., c., d. and e. of section 7 of P.L.1972, c.198 (C.39:6-86.1); additional first party coverage benefits required to be offered pursuant to section 10 of P.L.1972, c.70 (C.39:6A-10) or whether a submitted charge or fee is in conformance with the provisions of section 10 of P.L.1988, c.119 (C.39:6A-4.6). Arbitration proceedings shall be administered and subject to procedures [established by the American Arbitration Association] approved by the commissioner which are in conformance with New Jersey law and consistent with the Legislature's intent as stated in section 1 of P.L. , c. (C. )(now before the Legislature as this bill). If the claimant prevails in the arbitration proceedings, the insurer shall pay all the costs of the proceedings, including reasonable attorney's fees, to be determined in accordance with [a schedule of hourly rates for services performed, to be prescribed by the Supreme Court] the Rules Governing the Courts of the State of New Jersey and in accordance with the New Jersey Rules of Professional Conduct. Disputes concerning the determination of the medical necessity or appropriateness of treatments, health care services or durable medical goods and disputes concerning whether a treatment, health care service or durable medical good relating to an injury for which reimbursement is being sought is causally related to an insured event shall not be subject to binding arbitration.
(cf: P.L.1995, c.407, s.1)
42. Section 10 of P.L.1988, c.119 (C.39:6A-4.6) is amended to read as follows:
10. a. The Commissioner of Banking and Insurance shall, within 90 days after the effective date of P.L.1990, c.8 (C.17:33B-1 et al.), promulgate medical fee schedules on a regional basis for the reimbursement of health care providers providing services or equipment for medical expense benefits for which payment is to be made by an automobile insurer under personal injury protection coverage pursuant to sections 4 and 10 of P.L.1972, c.70 [(C.39:6A-1 et seq.)] (C.39:6A-4 and 39:6A-10) or medical expense benefits coverage pursuant to section 4 of P.L. , c. (C. )(now before the Legislature as this bill), or by an insurer under medical expense benefits coverage pursuant to section 2 of P.L.1991, c.154 (C.17:28-1.6). These fee schedules shall be promulgated on the basis of the type of service provided, and shall incorporate the reasonable and prevailing fees of 75% of the practitioners within the region. If, in the case of a specialist provider, there are fewer than 50 specialists within a region, the fee schedule shall incorporate the reasonable and prevailing fees of the specialist providers on a Statewide basis. The commissioner may contract with a proprietary purveyor of fee schedules for the maintenance of the fee schedule, which shall be adjusted biennially for inflation and for the addition of new medical procedures.
b. The fee schedule may provide for reimbursement for appropriate services on the basis of a diagnostic-related (DRG) payment by diagnostic code where appropriate, and may establish the use of a single fee, rather than an unbundled fee, for a group of services if those services are commonly provided together. In the case of multiple procedures performed simultaneously, the fee schedule and regulations promulgated pursuant thereto may also provide for a standard fee for a primary procedure, and proportional reductions in the cost of the additional procedures.
c. No health care provider may demand or request any payment from any person in excess of those permitted by the medical fee schedules established pursuant to this section, nor shall any person be liable to any health care provider for any amount of money which results from the charging of fees in excess of those permitted by the medical fee schedules established pursuant to this section.
(cf: P.L.1997, c.151, s.33)
43. Section 14 of P.L.1972, c.70 (C.39:6A-14) is repealed.
44. This act shall take effect on the 180th day following enactment, except that section 11 of this act shall take effect immediately and that the Commissioner of Banking and Insurance may take those actions and promulgate those regulations necessary to implement the provisions of this act prior to that 180th day.
STATEMENT
This bill makes a number of modifications to New Jersey’s automobile insurance no-fault law. The bill permits a choice of policies to satisfy the State’s mandatory insurance requirement. It provides for two types of coverage - standard coverage and a mini policy, which contains less coverage and will be significantly more affordable than standard coverage.
A policy containing standard coverage includes personal injury protection coverage with $250,000 medical expense benefits, wage loss benefits, benefits for replacement services, and a death benefit, all payable without regard to fault. It also includes bodily injury liability coverage, which protects the insured in the event he is sued for pain and suffering, in a minimum amount of $15,000 for each person, each accident, up to a maximum of $30,000 for each accident, and property damage liability coverage for damage done to another’s vehicle, in the amount of $5,000. These are the limits presently required for these coverages. Uninsured motorist coverage would no longer be mandatory.
Drivers would have the option of purchasing a “mini” policy, which includes $10,000 medical expense benefit personal injury protection coverage, and $5,000 property damage liability coverage, the latter being the same amount presently required. Persons electing this coverage would not be required to purchase bodily injury liability coverage, which would provide coverage in the event that the insured is sued for pain and suffering. The person electing this coverage does assume considerable financial risk, however, and insurers would be required to disclose that fact to anyone seeking to buy coverage. While most individuals who have assets, such as a home or other property, probably would not purchase this coverage, it is likely that lower-income persons, such as minimum wage earners, with no assets to protect, would find this coverage affordable and within their means to purchase. Many of these individuals are without insurance under the present system. This would ensure that they at least have medical benefits in the event they are injured; many of the uninsured drivers today not only do not have medical benefits, but are also without health insurance, meaning that if they are hospitalized they are treated under charity care. In more than 75% of all automobile accident cases, the medical expense benefits paid are less than $10,000. Individuals selecting the mini policy are not barred from suing for pain and suffering, but they would be subject to the most restrictive tort threshold.
The bill provides for enhanced personal injury protection coverage for those selecting a standard policy, which includes wage loss and other benefits. The bill doubles the basic wage loss benefit, payable without regard to fault, from $100 a week to $200 a week; funeral expense benefits are increased from $1000 to $1500. The amounts currently set forth in the law have not been changed since 1972. Anyone having a standard policy can continue to purchase higher amounts if they wish, as currently provided in the no-fault law.
While the $250 medical expense deductible presently provided in the law remains, the 20% across-the-board copayment is eliminated by the bill, with insurers being permitted to modify their policies to apply copayments in varying amounts, at their discretion, to selected benefits which are subject to overutilization. This is both a cost-saving and anti-fraud measure. The existing across-the-board payment was intended to discourage overutilization of benefits, but instead serves to penalize those individuals who do not abuse medical benefits.
The bill establishes a peer review mechanism which differs from the Governor’s proposal in several important ways. While the Governor’s proposal permits insurers to contract individually with peer review organizations (PROs), which could result in a PRO becoming a “captive” of the insurer which pays it, this bill provides that the cases referred to peer review will be distributed among PROs by an independent agency designated by the Commissioner of Banking and Insurance. The time period for peer review is reduced from that in the Governor’s bill in order to effectuate a speedier resolution of disputes over payment of benefits, and it requires insurers to pay for treatment up to the time the final decision is made. Either party - the insurer or the insured - can appeal the decision. The bill contains sanctions against insurers which abuse the process by referring cases to peer review frivolously; it establishes standards for those cases which can be referred. Under certain circumstances, an insurer’s right to refer cases for peer review can be terminated by the commissioner, if there is shown to be a pattern of abuse.
The bill updates the 1972 statutory language with respect to the payment of benefits by redefining “medical benefits”; in part, this is done in order to accommodate the many new medical procedures which have come into existence since that time. The language also recognizes that the expansive nature of the personal injury protection medical benefit which was contemplated in 1972 with the establishment of unlimited benefits has been modified by the reduction of the benefit to $250,000 by the FAIR act in 1990; this fact is also underlined by the establishment in this bill of the $10,000 mini policy medical expense benefit. To assist in providing a statutory guideline for medical expense benefits and to provide an objective standard for the peer review process, the bill contains a definition of “medically necessary,” as most health insurance policies do, and establishes that in order to be reimbursable, treatment for injuries must be medically necessary. While this has been implicit in existing law, it has been subjectively interpreted.
To provide insureds having standard coverage with an option to reduce their premium cost, the bill adds a verbal threshold which is the same as Michigan’s - an insured having this coverage can only sue for pain and suffering for death, serious impairment of body function or permanent serious disfigurement; people choosing this option can save 12% on the bodily injury portion of their coverage. Insureds who want a more liberal right to sue for pain and suffering can retain the present verbal threshold. There will still be a saving for the latter because of other provisions in the bill and in existing law, including the option to eliminate all or part of their uninsured motorist coverage, savings which will be gained as the result of peer review, savings as a result of the new fee schedule recently enacted by the Legislature, and savings as a result of the modification of the copayment structure for medical expense benefits. In addition, these individuals will have enhanced basic wage loss and other expense benefits.
In order to assist in combating fraudulent practices, the bill clarifies the fact that in order to be reimbursable, treatments and diagnostic tests must be performed by persons licensed or certified to do so, and diagnostic tests must be recognized by the professional board which supervises the treating provider.
Under the bill, uninsured motorist coverage, which would no longer be mandatory, will be offered in two different versions. The more expensive coverage will contain coverage for bodily injury, which, in the event you are injured by an uninsured driver, will permit you to collect pain and suffering from your own insurer if you meet the requirements of the threshold you have elected; it will also include property damage coverage for damage done to your vehicle by an uninsured motorist. This is the same basic coverage required of every driver today. An alternative choice would also be offered, which is to purchase coverage for your economic loss only. This coverage, which is much less expensive, would reimburse you for economic loss if you are injured by an uninsured motorist. This would protect you from financial hardship in the event you are injured. This coverage would also be offered as an underinsured motorist coverage.
Taken together, the provisions of this bill offer opportunities for significant savings. It also provides low-income drivers an opportunity to meet the requirements of the mandatory insurance law by paying significantly less than they are required to do today; while not without risk, this option will provide persons with at least the medical benefits they need if they are injured in an accident. The mini policy provision stops short of removing the mandatory insurance requirement of New Jersey’s automobile insurance law and it continues to make drivers assume some responsibility in return for their driving privilege. While providing enhanced benefits for drivers electing the standard option, the bill also provides opportunities for them to contain their costs by further restricting their right to sue for pain and suffering; at the same time it recognizes that many drivers are willing to pay somewhat more for a more liberal right to sue, even though they may not be willing to pay the significantly greater cost attendant to the election of the "zero" threshold.
Provides for a modification of threshold options, a mini automobile insurance policy, repeal of mandatory uninsured motorist coverage and review of medical expense benefits disputes by PROs.