Sean Callagy - Attorney and Entrepreneur: no fault

Monday, May 9, 2016

What is No-Fault Auto Insurance and How does the Arbitration Process Relate?

The purpose of this post is to help assist those with questions they have concerning their business or medical practice. The Callagy Law team is knowledgeable in many law practice areas and will frequently post topics ranging from Medical Revenue Recovery, PIP, Workers Compensation, and Commercial Insurance. We hope to have this blog shed a light on many common questions.

One of the primary functions of Callagy Law, P.C. is the representation of New Jersey medical providers for collection of unpaid medical bills incurred as the result of motor vehicle accidents, which operates within the construct of what is called “Personal Injury Protection.”

To understand the relationships at play, the first thing to understand is that under New Jersey Law, all operators of Motor Vehicles must carry automobile insurance. This insurance can be obtained in two forms, “liability only,” or “liability plus collision.” The difference between the two is that the former is limited to payment of vehicular damage of another party’s vehicle – should it be determined that the accident was your fault. The latter includes coverage for damage to your own car in addition to damage caused to another person’s.

However, what many people do not realize is that, if you are injured as a result of a motor vehicle accident, the primary payor (i.e. insurance company) will typically default to your automobile insurance, not any personal health insurance that you may have. This is termed as the PIP coverage portion of your automobile insurance.

If a party is injured in an accident, their default payor will be their own car insurance company, not the other party involved in the accident, even if you feel the accident was caused by them. This is because New Jersey is one (1) of twelve (12) “No-Fault” states.

Specifically, the term “no-fault” auto insurance generally refers to any auto insurance plan that allows policyholders to recover reimbursement from their own insurance company, regardless of fault. However, the State of New Jersey utilizes the strictest definition of no-fault coverage, which provide for the payment of no-fault first-party benefits and restrict the right to sue any third parties with regard to the accident. As noted above, this “policyholder benefit coverage” is known as personal injury protection (PIP). [See: Insurance Information Institute, “No Fault Auto Insurance”- http://www.iii.org/issue-update/no-fault-auto-insurance]

Currently 12 states and Puerto Rico have no-fault auto insurance laws. Florida, Michigan, New Jersey, New York and Pennsylvania have verbal thresholds of PIP coverage. However, in New Jersey, Pennsylvania and Kentucky only, motorists may reject the lawsuit threshold and retain the right to sue for any auto-related injury. [Id.]

Therefore, in the most typical situation, when a patient is injured, and requires medical treatment, their personal car insurance company is responsible for making the appropriate covered payments. However, in many cases, the insurance companies’ unjustly deny payment based on purely procedural or theoretical grounds, or based upon differences in medical opinions between the patient’s doctors’ and the insurance companies’ hired “physician experts.”

Therefore, to take the burden of establishing the medical necessity of post-accident treatment, most patients “Assign” their right to payment to the physicians, who must then seek to recover any underpayments on their own accord, as subrogee of the insured patient. In order to protect their right to payment, the matters of PIP disputes are contractually stipulated to take place within an authorized New Jersey Arbitration Forum, rather than the more costly State Judicial System (ie Court).

At present, a company called “Forthright” administers New Jersey No-Fault Arbitrations, wherein its sole focus is management of No-Fault PIP Arbitrations under the State’s Automobile Insurance Cost Reduction Act. [See http://www.nj-no-fault.com/]

Callagy Law, P.C. represents all facets of medical providers from all stages of the arbitration process. We pick up your unpaid files, file the Demand for Arbitration, and send one of our highly skilled PIP-Litigation Specialized Attorneys to the scheduled hearing, where the provider’s argument for payment is presented to a Forthright Dispute Resolution Professional, who will subsequently render a decision, awarding the unpaid medical provider the fees to which they feel it is entitled. To date, almost $135,000,000.00 has been recovered for our PIP clients, a result of our 90% Claim Success Rate in the 44,000 cases that have been handled to date.

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What is No-Fault Auto Insurance and How does the Arbitration Process Relate? #Arbitration, #DemandForArbitration, #NoFault, #Pip

Monday, April 11, 2016

Limited Policies Under New Jersey No-Fault Law

This blog will take a closer look into limited policies under New Jersey No-Fault Law – and examine basic versus standard policies.

New Jersey automobile insurance policies generally provide No-Fault, or PIP, coverage in the amount of $250,000.00 for medically necessary and reasonable medical treatment per person, per motor vehicle accident, for covered individuals. However, an insured may opt for reduced coverage limits. For example, an insured may opt for only $15,000.00 No-Fault coverage, per person, per motor vehicle accident. Does this limited amount apply to all individuals covered by the policy? As discussed below, the answer may vary depending on whether the governing policy is “basic” or “standard.”

“Basic” policies grew out of the Automobile Insurance Cost Reduction Act, known as “AICRA.” This law was passed in 1998 with an effective date of March 22, 1999. Under AICRA, a new class of PIP benefits was created, namely, “basic” coverage, to be distinguished from “standard” coverage. Basic policies provide for very limited medical coverage, and apply to all individuals covered by the policy. N.J.S.A. 39:6A-3.1 provides the following:

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 basic automobile insurance policy providing the following coverage:

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, and 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. (emphasis added)

Standard policies may also provide for limited policy coverage. A standard policy, however, only applies to the named insured and resident relatives. provides the following:

39:6A-4.3. Personal injury protection coverage options

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:

Medical expense benefits in amounts of $150,000, $75,000, $50,000 or $15,000 per person per accident; except that, medical expense benefits shall be paid in an amount not to exceed $250,000 for all medically necessary treatment of permanent or significant brain injury, spinal cord injury or disfigurement or for medically necessary treatment of other permanent or significant injuries rendered at a trauma center or acute care hospital immediately following the accident and until the patient is stable, no longer requires critical care and can be safely discharged or transferred to another facility in the judgment of the attending physician.

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). (emphasis added)

Therefore, if a PIP carrier provides notice that a limited policy amount has been exhausted and no more medical bills will be reimbursed, request documents to demonstrate that the limited policy indeed applies. If the patient is not the named insured and is not a resident relative of the named insured, it is critical to determine if the governing policy is “basic” or “standard.”

We hope you found the information provided in this article helpful to various questions you may have had concerning the healthcare industry. For information pertaining to our services for medical providers, please click here. Please note, Callagy Law has recovered over $200,000,000 for medical providers, and that number grows daily. Please free to reach out to Sean Callagy of Callagy Law at any time for questions you may have concerning personal and business matters. Callagy Law offices are located conveniently in Paramus, NJ. Beyond the scope of information, Sean Callagy has developed multiple areas of our healthcare legal practice and business coaching. Feel free to connect with us on Facebook, Twitter or LinkedIn! Additionally you can subscribe to our daily videos on YouTube.

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