The Law Office of Jeffrey Randolph, LLC Admitted in NJ & NY Admitted in U.S. Court of Appeals -Third Circuit Admitted in U.S. Court of Federal Claims

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1 The Law Office of Jeffrey Randolph, LLC Admitted in NJ & NY Admitted in U.S. Court of Appeals -Third Circuit Admitted in U.S. Court of Federal Claims New Jersey Office: New York Office: 139 Harristown Road, Ste 101 Tel. (201) West 25 th St. Glen Rock, N.J Fax (201) New York NY (Reply to NJ Office) Jeffrey Randolph, Esq. NJ PIP Regulation Amendments Take Effect January 4, 2013 Proposal #: PRN I. INTRODUCTION. The Department of Banking and Insurance ( DOBI ) has proposed new regulations relating to the personal injury protection ( PIP ) benefits available under the New Jersey No-Fault Act to persons injured in automobile accidents. The changes include amendments to PIP benefits, PIP dispute resolution, and PIP medical fee schedules. The DOBI published proposed regulation amendments on August 1, 2011, in the New Jersey Register. A 60 day public comment followed under which the DOBI received over 19,000 comments which prompted a substantive revision of the proposal and re-publication and comment under the Administrative Procedures Act on February 21, The new comment period expired on April 21, 2012, and the DOBI recently published its comment responses on November 5, 2012, with an effective date for the regulations of January 4, The ANJC and its members oppose these regulations because they will have a negative effect on persons who are injured in automobile accidents and a chilling effect on the medical providers who treat them. It is the ANJC s position that the proposed regulations are illegal and ultra vires on their face as the DOBI has greatly exceeded their authority under the New Jersey No-Fault statutes and has proposed regulations that directly conflict with the No-Fault statutes and New Jersey Supreme Court precedent. Further, the ANJC feels that the proposed regulations are invalid as they violate the due process and equal protection rights of patients afforded by both the United States and New Jersey constitutions. Finally, the ANJC submits that the proposed regulations are in direct conflict with the express terms as well as the legislative intent behind the New Jersey No-Fault law and the intent of the federal Patient Protection and Affordable Care Act ( PPACA ) as the regulations will limit access to medical care, interfere with the ability of chiropractors to treat patients, delay the prompt payment of medical bills, and will result in an actual increase in health care costs as opposed to cost savings mandated by these remedial laws. The following is a non-exhaustive list of the amendments and that will affect chiropractors in their daily practices. II. REGULATION AMENDMENTS:

2 1.PIP HMOs- PIP HMOs are not authorized under this set of regulatory amendments. The first proposal allowed established Workers Compensation Networks to qualify as a PIP Organized Delivery System ( ODS ) and, therefore, be able to waive co-pay and deductible responsibilities of patients as an incentive to use network providers as was first permitted by the July, 2010, PIP ODS regulations. This provision was deleted in the second proposal as NJDOBI felt it warranted further study before inclusion in the regulations. 2.PIP Vendors There is extensive new language requiring PIP vendors / third party administrators, such as Concentra and Procura, to register with the DOBI and be under their regulatory oversight. This should provide some accountability for the vendors and is a positive aspect of the amendments. PIP Vendors must have a medical director licensed in the State of New Jersey. 3.Daily Reimbursement Cap- Is increased from $99 to $105 per day, a $6 dollar increase. Acupuncture is included within the daily maximum cap as well as unspecified Physical Therapy codes CPT and Fee Schedule Update 1,100 additional CPT codes are being added to the fee schedule. However, DOBI removed 117 CPT codes for low-frequency, high-cost procedures performed by neurosurgeons and spinal surgeons that were initially in the first proposal which will continue to be paid at the provider s Usual and Customary Rate. 5.Uniform Appeal Process A uniform appeal process was to be implemented using only the NJDOBI Uniform Appeal Form but has been delayed for a year for DOBI to revisit the appeal process. The appeal provisions of the amendments, thus, will take effect on November 5, Appeals are a condition precedent to arbitration and proof of appeal and response, or if no response, a certification as to no response signed by the attorney, must accompany all arbitration demands. A provision was added that providers and their attorneys can have penalties imposed for filing arbitrations without fully exhausting the internal appeals process as provided by the Forthright Rules of Arbitration. If the carrier fails to issue an appeal determination within the proscribed deadlines, they are estopped from raising any issues raised in the appeal at arbitration. Appeals can be submitted via fax, or web portal but if the provider submits via snail mail, they must have proof of mailing. Appeals are broken down into two categories: a) For Future Treatment Appeals, the provider has 5 days to appeal medical necessity denials of precertification for future treatment. The carrier must acknowledge receipt within 3 days and must issue a decision within 10 days of receipt. The initial amendments included a provision that if the provider does not appeal within the 5 day deadline, his or her appeal would be converted to an administrative appeal was deleted and replaced with an indication the provider can resubmit a precertification request if they miss the

3 5 day appeal deadline and then appeal a second denial within 5 days. A provision was also added that the PIP carrier response timeframes above will be stayed if the carrier requests an IME of the patient. b) For Administrative Appeals, comprising non-medical necessity issues such as coding, reimbursement, etc., the appeal must be filed within 180 days of denial and carrier has 5 days to confirm receipt. 6.Assignment of Benefits- AOBs are limited to service providers only which precludes the factoring of PIP claims. Carriers are permitted to include the assignment of duties to the health care provider in the AOB which is in direct contradiction to the Appellate Division decision in Selective v. Hudson East Pain Management, 416 N.J. Super.418 (2010), aff d A-105 (7/18/2012), affirmed by the NJ Supreme Court on appeal, which held that patient assignments of benefits to health care providers does not also assign a duty to cooperate. This language was included in direct response to the Selective case and will require providers to attend Examinations Under Oath and provide discovery of non-medical corporate and licensure documents that both the Appellate Division and Supreme Court held they did not have to provide. 7.Paper-Only Arbitration Hearings Are expressly permitted pursuant to the Forthright arbitration rule amendments effective 8/1/11 for claims with a fee scheduled amount due of less than $1,000. MRI fee schedule payments were reduced so that many MRI arbitrations will fall within the paper hearing provisions. 8.PIP Arbitration Attorneys Fees- DRPs are directed to calculate the Lodestar fee based upon reasonable rates and time spent on the case pursuant to RPC 1.5 with specific focus on fees being consonant with the amount awarded to the provider. They must also engage in specific proportionality analysis of: i) cases where the fee certification exceeds the amount awarded to the provider; and ii) fees attributable to claims or issues won as opposed to fees attributable to claims or issues lost. 9.Usual and Customary Rate ( UCR ) Analysis The amendments add the Fairhealth database (successor to Ingenix) and Wasserman as databases DRPs can take into account as evidence of Usual and Customary Rates. 10.Kinesiotaping- There is no separate reimbursement for kinesiotaping (similar to hot/cold packs) and the surgical strapping codes (i.e. CPT 29220) may not be billed. The provider can only bill for the actual tape using a DME code (ie. A4552 which pays $.36 per unit). Kino-Tex Gold tape costs $18.90 for a 16.4 foot roll resulting in a cost of $1.15 per unit/foot. Thus, chiropractors would be required to provide this efficacious treatment modality at a loss to PIP patients for each unit of tape applied. This will result in a drastic reduction of the use of this treatment modality for auto accident patients. 11.Spinal MUA- CPT may only be reported once per procedure for all spinal areas and cannot be broken down by cervical, thoracic and lumbar spines.

4 12. Ambulatory Surgical Center ( ASC ) Facility Fees- The fee schedule will no longer use the Grouper system with a separate fee schedule. The standard PIP fee schedule will have a professional fee as well as an ASC facility fee listed on it for all codes. ASC facility fees are set at approximately 300% of the Medicare RBRVS. Only surgical procedures that are on the Medicare approved list for being performed in an ASC are reimbursable. Otherwise, they must be performed in a hospital or Hospital Outpatient Surgical Facility. If there is no fee listed in the ASC column of the fee schedule, the procedure cannot be performed in an ASC setting. 13.Award Payment Time Frame: A new provision was added extending the time for payment of arbitration awards by carriers from 20 days to 45 days. If a request for modification/clarification or an appeal is filed in a Forthright arbitration or if an Order to Show Cause is filed in Superior Court to vacate the arbitration award, the payment time frame is automatically stayed. 14. Precertification: A provision was added permitting carriers to reasonably restrict who can submit Precertification (APTP) forms for precertification and provide for precertification via web portal. 15. Durable Medical Equipment ( DME ): Medicare Claims Manual is formally adopted for DME claims. TENs supplies cannot be billed separately (ie. leads, batteries, pads) for rentals but can be billed separately if the unit is purchased. 16. CCI Edits: expanded and formally apply to PIP claims including -59 billing and AMA Assistant coding opinions formally adopted. 17. New Definition of Medical Necessity: DOBI has proposed to amend the rule to redefine medical necessity to evidence based clinical guidelines/practice/treatment published in peer-reviewed journals. III. WHAT IS BEING DONE? As was stated in the introduction to this article, it is the ANJC s position that the proposed amendments to the New Jersey No-Fault Regulations embodied in PRN are ultra vires, contrary to law, public policy and improperly impinge upon the fundamental rights of the citizens of the State of New Jersey. They must, therefore, be struck down by the judiciary as a valid exercise of checks and balances over the overreaching of the New Jersey Department of Banking and Insurance. Two healthcare coalitions consisting of health care providers of various specialties have already filed a request that DOBI stay these regulations while they appeal to the Appellate Division of the New Jersey Superior Court. The ANJC has officially signed on as a member of one of those coalitions the New Jersey Coalition for Quality Healthcare - which is being represented by the preeminent law firm of Wolf and Samson, and the ANJC State Board of Directors voted to contribute funds to the

5 coalition to fight these regulations through the legal process. This request to DOBI for a stay was denied by the DOBI on November 23, 2012, and DOBI s decision can be read at: Since then, the New Jersey Association for Justice ( NJAJ, formerly ATLA ) has already filed a Notice of Appeal with the Appellate Division of the New Jersey Superior Court and the health care coalitions appeal(s) will shortly follow suit. The ANJC also intends to support the NJAJ and the other coalition of health care providers in their similar battle against the regulations and to provide whatever support it can to a parties fighting for the rights of all health care providers and, more importantly, their patients. If you have any questions on these regulatory amendments, do not hesitate to contact me at: jrandolph@jrlaw.net. ANJC GENERAL LEGAL COUNSEL, By: Jeffrey B. Randolph Esq.