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New Jersey court approves PIP medical fee schedule after two-year court battle

The New Jersey Superior Court has ruled in favor of implementing a new Personal Injury Protection (PIP) medical fee schedule as part of an effort to lower medical costs relating to auto accidents in the state.

The New Jersey Superior Court has ruled in favor of implementing a new Personal Injury Protection (PIP) medical fee schedule as part of an effort to lower medical costs relating to auto accidents in the state.

The PIP medical fee had been adopted in 2007 as a means to lower auto insurance in New Jersey, but had been challenged in court by medical providers. According to Property Casualty Insurers Association of America council Richard Stokes, the ruling in favor of the fee schedule will help keep auto insurance costs stable while lowering medical costs as well.

"Medical treatment for auto accident victims in New Jersey is generally higher than treatment for similar injuries caused by other events, thereby contributing to the high cost of auto insurance in the state," said Stokes. "While the fee schedule remains very generous to medical providers, it will move the system forward with more effective cost controls than currently exist."

A 2006 study from the Insurance Institute for Highway Safety compared states with PIP, which it defines as insurance that "insures against injuries sustained by insured drivers and other people in their vehicles, regardless of who’s at fault in a collision," with states that had tort insurance systems, defined as medical payment coverage that "insures against injuries sustained in crashes to insured people." The study found that vehicles with lower frequencies of claims under personal injury protection coverage were likely to have fewer claims under medical payment as well.

"Experience under one coverage predicts experience under the other," the report stated.

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Posted: August 11, 2009