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Scutari Measure To Change PIP Claims Passes Senate Committee

TRENTON – Legislation sponsored by Senator Nicholas P. Scutari to make changes to drivers’ personal injury protection (PIP) claims through their auto insurance policies by ensuring providers are fairly compensated for their services and including ambulatory surgical facilities to the list of health care providers was approved by the Senate Commerce Committee today.

“There is no doubt that it is in everybody’s best interest to have a PIP fee schedule that is comprehensive, definitive and binding,” said Senator Scutari, D-Middlesex, Somerset and Union. “It is also essential that it be fair to all parties. The present reimbursement system does justly compensates health care providers for vital services they provide, but this bill would create efficiencies for the insurance and medical care industries.”

According to Senator Scutari, “The Department of Banking and Insurance (DOBI) proposed an expanded fee schedule that would implement a significant reduction to PIP reimbursements. This proposal could create a boom for insurance providers, but at the expense of those injured in automobile accidents who need quality care.”

Senator Scutari’s bill, S-2402, would reform the processing and payment for automobile insurance PIP claims to make sure that health care providers are paid faster and received fair compensation. The bill would also expand coverage for services performed at ambulatory surgical facilities.

According to Senator Scutari, DOBI failed to provide a fee schedule that determines the fair reimbursement cost for various services performed by health care providers.

“The current law says that DOBI’s schedule should incorporate reasonable fees of 75% of health care providers in a given region,” said Senator Scutari. “The Commissioner declined to do this; instead, he has chosen to rely on indices such as Medicare, which have very little practical relation to the real world cost of medical services, and completely negate the Legislature’s intent.”

Senator Scutari stated that the bill would also require that claims be paid by the insurer within 30 days, and insurance companies would be liable for interest, plus attorney’s fees and costs, for all late payments of certain claims.

Senator Scutari also noted that the bill would penalize insurers up to $10,000 per claim if they are found to have wrongfully delayed, withheld, or denied payment on claims.

The bill now heads to the full Senate for consideration.

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