NJ CAR INSURANCE PIP PERSONAL INJURY PROTECTION OVERVIEW

NJ CAR INSURANCE PIP PERSONAL INJURY PROTECTION OVERVIEW

NJ Car Insurance- NJ Auto Insurance Policy Under A.I.C.R.A., New Jersey consumers have more choices with regard to their NJ Car Insurance. These choices give you the option to choose coverage limits that best fit your individual needs at the time you buy or renew your policy. New Jersey CAR INSURANCE - BASIC POLICY New Jersey Car Insurance Consumers may choose either a standard auto insurance policy or a new basic type of policy. The new basic policy allows vehicle owners to purchase lower amounts of certain coverage's than New Jersey law previously required. A basic policy offers $15,000 in PIP personal injury protection coverage and includes up to $250,000 of medical benefits coverage for catastrophic- type injuries, $5,000 property damage liability and an option to purchase $10,000 of bodily injury liability coverage. If you purchase a basic policy, you cannot purchase uninsured/underinsured motorist coverage. Companies can, at their option, also offer to sell collision and comprehensive coverage's with this type of policy. NJ CAR INSURANCE - STANDARD POLICY A New Jersey standard auto insurance policy offers motorists a variety of coverage options; NJ State law requires you to purchase certain minimum limits of three coverage's: NJ CAR INSURANCE POLICY Personal Injury Protection - NJ PIP pays for injuries to you and your passengers, no matter who is at fault in an accident. Insurance companies must offer you up to $250,000 of coverage. NJ CAR INSURANCE POLICY Liability Coverages - Bodily Injury Liability pays for injuries you cause to others in an accident. Under a standard policy the minimum coverage required is $15,000 for injuries to one person and $30,000 for all injuries in an accident. Property Damage Liability pays for damage you cause to others' property from an accident. The minimum required coverage is $5,000. 2

NJ CAR INSURANCE POLICY Uninsured/Underinsured Motorist - These coverage's protect you against damages and injuries caused by drivers who are uninsured or inadequately insured. These coverages are not available under a basic policy. Minimum limits are the same as for the liability coverage's and the basic deductible is $500 for property damage. NJ CAR INSURANCE POLICY Optional Coverage's Collision coverage pays to repair your car after an accident, no matter who is at fault. Comprehensive coverage pays for auto theft, glass breakage and damage from vandalism, fire, flood and flying rocks and debris. NJ CAR INSURANCE- PIP OPTIONS NJ CAR INSURANCE Consumers will also have new choices with regard to their personal injury protection or PIP benefits coverage. New Jersey law previously mandated that all policyholders purchase $250,000 of PIP benefits. PIP pays for injuries to you and your passengers, no matter who is at fault in an accident. Under the AICRA reform law, individuals purchasing a 'standard' policy have the option of choosing various levels of coverage, $250,000, $150,000, $75,000, $50,000 or $15,000. All the options include catastrophic- type injury coverage of up to $250,000. If you do not choose among these options, you will automatically be given the standard $250,000 The reform law also encouraged insurance companies to develop various deductible, co- payment and pre- certification plans to combat fraud and abuse of auto insurance medical benefits. Consumers should carefully review these plans. NJ Auto Insurance PIP Overview "PIP" is an acronym for the PERSONAL INJURY PROTECTION BENEFITS contained within an NJ automobile insurance policy. With the enactment of the AUTOMOBILE INSURANCE COST REDUCTION ACT ("AICRA"), NJ medical providers were imposed with a complete new set of rules to follow in order to obtain compensation for 3

reasonable and necessary medical expenses rendered to a covered person when the medical expenses were causally related to a motor vehicle accident. Failure to comply completely with the new set of rules would result in the reduction and/or elimination of compensation due the medical provider from the respective automobile insurance carrier. Furthermore, failure to comply completely with the new set of rules would also result in the medical provider being prohibited from collecting the compensation due directly from the patient. Given the above, it is obvious that the medical provider and the supporting office staff must have complete familiarity with the new set of rules and terminology ushered in with AICRA. If this complete familiarity is accomplished, the medical provider will still be able to enjoy the financial rewards of a successful practice with PIP. However, if the medical provider and the supporting office staff fails to become completely familiar with the new set of rules and terminology ushered in with AICRA, financial detriments will certainly occur. Prior to AICRA, the treating medical provider basically controlled the treatment plan of the patient and the diagnostic testing utilized in the furtherance of the treatment plan of the patient. However, AICRA has now delegated the COMMISSIONER of the DEPARTMENT OF BANKING AND INSURANCE ("DOBI") to be an important factor in the aforementioned treatment plan of the patient and the diagnostic testing utilized in the furthermore of the treatment plan of the patient. This was accomplished by the passing of regulations by NJDOBI that established and/or continued the following: APPLICABILITY OF PIP MEDICAL BENEFITS; STATUTORY EXCLUSIONS OF PIP MEDICAL BENEFITS; BASIC POLICY PIP MEDICAL BENEFITS; STANDARD POLICY PIP MEDICAL BENEFITS; PRIMARY HEALTH INSURANCE OPTION; DEDUCTIBLE AND CO- PAYMENT REQUIREMENTS; PIP FEE SCHEDULE; MEDICAL PROTOCOLS (CARE PATHS); DIAGNOSTIC TESTING DETERMINED TO YIELD NO DATA OF ANY SIGNIFICANT VALUE IN THE DEVELOPMENT, EVALUATION AND IMPLEMENTATION OF AN APPROPRIATE PLAN OF TREATMENT 4

FOR INJURIES SUSTAINED IN MOTOR VEHICLE ACCIDENTS; DIAGNOSTIC TESTING DETERMINED TO HAVE VALUE IN THE EVALUATION OF INJURIES, THE DIAGNOSIS AND DEVELOPMENT OF A TREATMENT PLAN FOR PERSONS INJURED IN MOTOR VEHICLE ACCIDENTS; TWENTY ONE DAY NOTIFICATION UPON COMMENCEMENT OF TREATMENT; DECISION POINT REVIEW PLAN; PRIOR NOTICE; DECISION POINTS; CASE MANAGEMENT; ADDITIONAL CO- PAYMENT PENALTY; TEN DAY PERIOD; ADDITIONAL CO- PAYMENT PENALTY; PRE- CERTIFICATION PLAN; COMPENSATION FOR DURABLE MEDICAL GOODS; PIP DISPUTE RESOLUTION (FORMERLY "PIP ARBITRATION"); DISPUTE RESOLUTION PROFESSIONAL ("DRP" AND FORMERLY "PIP ARBITRATOR"); ASSIGNMENT OF BENEFITS; MEDICAL REVIEW ORGANIZATION REVIEW; APPLICATION FOR DISMISSAL and EMERGENT/EXPEDITED FILING. APPLICABILITY OF PIP MEDICAL BENEFITS A person is eligible for PIP medical benefits pursuant to N.J.S. 39:6A- 4 if that person sustains "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 automobile or struck by an object propelled by or from that automobile. As before AICRA, the payment of PIP medical benefits is made 5

without regard to negligence, liability or fault and covers the named insured and family members that reside with the named insured. If the person is not a named insured and does not reside with a family member that is a named insured, then the coverage follows the automobile. As also before AICRA, there must be an automobile involved as put forth in the language of N.J.S. 39:6A- 4 above for applicability of PIP medical benefits. TAXICABS, BUSES and MOTORCYCLES are the prime examples of motorized vehicles that are not considered automobiles. STATUTORY EXCLUSIONS OF PIP MEDICAL BENEFITS Once the applicability of PIP medical benefits has been established, there are still certain statutory exclusions that can eliminate PIP medical benefits due to the actions of the person. These statutory exclusions are contained in N.J.S. 39:6A- 7 and are listed below: COMMITTING A CRIMINAL ACT OR ATTEMPTING TO AVOID LAWFUL APPREHENSION BY A POLICE OFFICER; (N.J.S. 39:6A- 7(a)(1)); COMMITTING AN INTENTIONAL ACT TO CAUSE INJURY OR DAMAGE TO ONESELF OR OTHERS; (N.J.S. 39:6A- 7(a)(2)); OWNING AN UNINSURED MOTOR VEHICLE; (N.J.S. 39:6A- 7(b)(1)); UTILIZING A MOTOR VEHICLE WITHOUT OWNER'S CONSENT; (N.J.S.39: 6A- 7(b)(2)). NJ AUTOMOBILE- BASIC POLICY PIP MEDICAL BENEFITS Assuming that there is no statutory exclusion of PIP medical benefits as outlined above, a new limitation of PIP medical benefits was ushered in under AICRA depending upon the type of automobile policy that is chosen by the insured. Specifically, if an insured elected the BASIC POLICY, the PIP medical benefits are limited to $15,000.00. (N.J.A.C.11: 3-4(a)(1)). 6

The only exception would be additional monetary coverage not to exceed $250,000.00 for "all medically necessary treatment of permanent or significant brain injury, spinal cord injury or disfigurement or 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 requiring critical care and can be safely discharged or transferred to another facility in the judgment of the attending physician. (N.J.A.C. 11:3-4(a)(1)). STANDARD POLICY PIP MEDICAL BENEFITS If the BASIC POLICY was not elected, then the monetary coverage that was applicable prior to AICRA remains in effect and the insured has what is now known as the STANDARD POLICY. Specifically, this policy provides monetary coverage for PIP medical benefits to an amount not to exceed $250,000.00. (N.J.S. 39:6A- 4(a)). Notwithstanding the aforementioned monetary coverage limits of PIP medical benefits under the BASIC or STANDARD POLICY, the type of treatment and type of diagnostic testing utilized in the furtherance of the treatment plan for the patient have been altered under AICRA. This is further described later on in this overview. PRIMARY HEALTH INSURANCE OPTION As before AICRA, a PRIMARY HEALTH INSURANCE OPTION is made available to insured's that would make PIP medical benefits under an automobile insurance policy a secondary coverage for a reduced premium. (N.J.S. 39: 6A- 4.3(d)). However, under AICRA, the PRIMARY HEALTH INSURANCE OPTION applies only to a STANDARD POLICY. It is specifically prohibited as a coverage option under a BASIC POLICY. (N.J.A.C. 11:3-4(d)). However, if a named insured does not actually have health insurance at the time of the accident, then the automobile insurance carrier automatically becomes the primary. But, an additional $750.00 deductible is applied to the medical benefit payments. (N.J.S. 39:6A- 4.3(f)). 7

In addition to the above, it must be noted that the election of a PRIMARY HEALTH INSURANCE OPTION applies only to a named insured and residing family members. As such, an individual who is not a named insured and does not reside with a family member who is a named insured automatically but is properly applying for PIP medical benefits under the policy has the automobile insurance carrier as primary. (N.J.S. 39:6A- 4.3(f)). DEDUCTIBLE AND CO- PAYMENT REQUIREMENTS: Prior to AICRA, a standard $250.00 deductible requirement and 20% co- payment requirement on the next $4750.00 in medical expenses was applied. However, under AICRA, deductibles can now be offered to insured's under a BASIC POLICY or a STANDARD POLICY in amounts of $500.00, $1000.00, $2000.00 and $2500.00. (N.J.A.C. 11:3-4.4(b)). The only exception is for a private passenger automobile insured under a commercial automobile insurance policy where no natural person is a named insured. In that situation, only the minimum $250.00 deductible can be offered. (N.J.A.C. 11:3-4.4(e)). Furthermore, the elected deductible requirement applies on a per accident basis, not a per person basis. (N.J.A.C. 11:3-4.4(c)). Notwithstanding the aforementioned, it must be noted that the elected deductible applies only to a named insured and residing family members. As such, an individual who is not a named insured and does not reside with a family member who is a named insured automatically but is properly applying for PIP medical benefits under the policy has the minimum $250.00 deductible. (N.J.A.C. 11:3-4.4(b)(1)). MEDICAL PROTOCOLS (CARE PATHS) One of the most significant changes with the enactment of AICRA is the established by DOBI of MEDICAL PROTOCOLS (CARE PATHS) for the treatment of identified injuries, including the utilization of diagnostic tests. Specifically, the treatment of accidental injury to the spine and neck and set forth in N.J.A.C. 11:3-4.6. In the aforementioned regulation, there were SIX CARE PATHS 8

promulgated. Specifically: CARE PATH ONE (CERVICAL SPINE: SOFT TISSUE INJURY); CARE PATH TWO (CERVICAL SPINE: HERNIATED DISC/RADICULOPATHY); CARE PATH THREE (THORACIC SPINE: SOFT TISSUE INJURY); CARE PATH FOUR (THORACIC SPINE: HERNIATED DISC/RADICULOPATHY); CARE PATH FIVE (LUMBAR- SACRAL SPINE: SOFT TISSUE INJURY); and CARE PATH SIX (LUMBAR- SACRAL SPINE: HERNIATED DISC/RADIUCULOPATHY). As can be easily seen by the above list, the CARE PATHS addressed three anatomical areas of the spine. Specially, the CERVICAL SPINE, the THORACIC SPINE and the LUMBAR- SACRAL SPINE. Thereafter, each of the aforementioned three anatomical areas was subdivided depending upon the injuries present. Specifically, SOFT TISSUE INJURY and HERNIATED DISC/RADICULOPATHY. Each of the CARE PATHS is attached hereto and a brief perusal of these documents show the attempt by DOBI to make the treatment of accidental injury to the spine and back, including diagnostic testing, into a flow chart. Furthermore, where the CARE PATH indicates a DECISION POINT either by a HEXAGON or by reference in the text to a second opinion, referral for a second independent consultative medical opinion, development of a treatment plan or mandatory CASE MANAGEMENT, a DECISION POINT REVIEW is required. (N.J.A.C. 11:3-4.6(b)). The aforementioned is further described later in this overview. In addition, it must be noted that each CARE PATH specifically notes the following: 9

"NOTE: These CARE PATHS identify typical courses of intervention. There may be patients who require more or less treatment. However, cases that deviate from the CARE PATHS may be subject to more careful scrutiny and may require documentation of the special circumstances. Treatments must be based on patient need and professional judgment. Deviations may be justified by individual circumstances, such as pre- existing conditions and/or other co morbidities " The aforementioned NOTE is extremely important to the medical provider and the supporting office staff since treatments that vary from the CARE PATHS shall be reimbursable ONLY when warranted by reason of MEDICAL NECESSITY. (N.J.A.C. 11:3-4.6(c)). Furthermore, N.J.A.C. 11:3-4.2 defines MEDICAL NECESSITY as: "The medical treatment or diagnostic test is consistent with the clinically supported symptoms, diagnosis or indications of the injured person, and: The treatment is the most appropriate level of service that is in accordance with the standards of good practice and standard professional treatment protocols including the CARE PATHS The treatment of the injury is not primarily for the convenience of the injured person or provider; and Does not include unnecessary testing or treatment." Given the above, it is imperative that the medical provider and the supporting office staff carefully and meticulously document the symptoms present during each visit and the treatment that was rendered. In addition, the aforementioned documentation MUST be clearly legible and clearly understandable to non- medical personnel. The practical reason for the aforementioned assertion is that any dispute over compensation of the medical services rendered will not be finally adjudicated by medical personnel but by a DISPUTE RESOLUTION PROFESSIONAL or a JUDGE, either of whom is generally NOT a trained medical person. The procedure for final adjudication will be further discussed later in this overview. 10

In addition, each CARE PATH specifies the applicable ICD- 9- CM codes. DIAGNOSTIC TESTING DETERMINED TO YIELD NO DATA OF ANY SIGNIFICANT VALUE IN THE DEVELOPMENT, EVALUATION AND IMPLEMENTATION OF AN APPROPRIATE PLAN OF TREATMENT FOR INJURIES SUSTAINED IN MOTOR VEHICLE ACCIDENTS Pursuant to N.J.A.C. 11:3-4.5 (a), and another of the major changes ushered in with AICRA, was that the following diagnostic tests shall not be compensated for by PIP medical benefits since they have been determined to yield no data of any significant value in the development, evaluation and implementation of an appropriate plan of treatment for injuries sustained in motor vehicle accidents: 1. (RESERVED); 2. SPINAL DIAGNOSTIC ULTRASOUND; 3. IRIDOLOGY; 4. REFLEXOLOGY; 5. SURROGATE ARM MENTORING; 6. SURFACE ELECTROMYOGRAPHY (SURFACE EMG); 7. (RESERVED); and 8. MANDIBULAR TRACKING AND STIMULATION. In addition to the above, and pursuant to N.J.A.C. 11:3-4.5(f), the following diagnostic tests shall not be compensated for by PIP medical benefits since they have been identified by the NEW JERSEY STATE BOARD OF DENTISTRY as failing to yield data of sufficient volume to alter or influence the diagnosis or treatment plan employed to treat TMJ/D: 1. MANDIBULAR TRACKING; 2. SURFACE EMG; 3. SONOGRAPHY; 4. DOPPLER ULTRASOUND; 5. NEEDLE EMG; 6. ELECTROENCEPHALOGRAM (EEG); 7. THERMOGRAMS/THERMOGRAPHS; 8. VIDEO FLUOROSCOPY; and 9. REFLEXOLOGY. DIAGNOSTIC TESTING DETERMINED TO HAVE VALUE IN THE 11

EVALUATION OF INJURIES, THE DIAGNOSIS AND DEVELOPMENT OF A TREATMENT PLAN FOR PERSONS INJURED IN MOTOR VEHICLE ACCIDENTS Pursuant to N.J.A.C. 11:3-4.5 (b), and another of the major changes ushered in with AICRA, was that the following diagnostic tests shall be compensated for by PIP medical benefits since they have been determined to have value in the evaluation of injuries, the diagnosis and development of a treatment plan for persons injured in motor vehicle accidents: 1. NEEDLE ELECTROMYOGRAPHY (NEEDLE EMG) when used in the evaluation and diagnosis of neuropathies and radicular syndrome where clinically supported findings reveal a loss of sensation, numbness or tingling. A NEEDLE EMG is not indicated in the evaluation of TMJ/D and is contraindicated in the presence of infection on the skin or cellulitis. This test should not normally be performed within 14 days of the traumatic event and should not be repeated where initial results are negative. Only one follow up exam is appropriate. 2. SOMA SENSORY EVOKED POTENTIAL (SSEP), VISUAL EVOKED POTENTIAL (VEP), BRAIN AUDIO EVOKED POTENTIAL (BAEP), or BRAIN EVOKED POTENTIAL (BEP), NERVE CONDUCTION VELOCITY (NCV) and H- REFLEX STUDY are reimbursable when used to evaluate neuropathies and/or signs of atrophy, but not within 21 days following the traumatic injury. 3. ELECTROENCEPHALOGRAM (EEG) when used to evaluate head injuries, where there are clinically supported findings of an altered level of sensorium and/or a suspicion of seizure disorder. This test, if indicated by clinically supported findings, can be administered immediately following the insured event. When medically necessary, repeat testing is not normally conducted more than four times per year. 4. VIDEO FLUOROSCOPY only when used in the evaluation of hypo mobility syndrome and wrist/carpal hypo mobility, where there are clinically supported findings of no range or aberrant range of motion or dissymmetry of facets exist. This test should not be performed within three months following the insured event and follow up tests are not normally appropriate. 12

5. MAGNETIC RESONANCE IMAGING (MRI) when used in accordance with the guidelines contained in the AMERICAN COLLEGE OF RADIOLOGY, APPROPRIATENESS CRITERIA to evaluate injuries in numerous parts of the body, particularly the assessment of nerve root compression and/or motor loss. MRI is not normally performed within five days of the insured event. However, clinically supported indication of neurological gross motor deficits, incontinence or acute nerve root compression with neurological symptoms may justify MRI testing during the acute phase immediately post injury.. In the case of TMJ/D where there are clinical signs of internal derangement such as nonself- induced clicking, deviation, limited opening, and pain with a history of trauma to the lower jaw, an MRI is allowable to show displacement of the condylar disc, such procedure following a pantographic or Tran cranial x- ray and six or eight weeks of conservative treatment. This TMJ/D diagnostic test may be repeated post surgery and/or post appliance therapy. 6. COMPUTER ASSISTED TOMOGRAPHY STUDIES (CT, CAT Scan) when used to evaluate injuries in numerous aspects of the body. With the exception of suspected brain injuries, CAT SCAN is not normally administered immediately post injury, but may become appropriate within five days of the insured event. Repeat CAT SCANS should not be undertaken unless there is clinically supported indication of an adverse change in the patient's condition.. In the case of TMJ/D where there are clinical signs of degenerative joint disease as a result of traumatic injury of the temporomandibular joint, tomograms may not be performed sooner than 12 months following traumatic injury. 7. DYNATRON/CYBER STATION/CYBEX when used to evaluate muscle deterioration or atrophy. These tests should not be performed within 21 days of the insured event and should not be repeated if results are negative. Repeat tests are not appropriate at less than six months intervals. 8. SONOGRAMS/ULTRASOUND when used in the acute phase to evaluate the abdomen and pelvis for intra- abdominal bleeding. These tests are not normally used to assess joints (knee and elbow) because other tests are more appropriate. Where MRI is performed, SONOGRAM/ULTRASOUND are not necessary. However, echocardiogram is appropriate in the 13

evaluation of possible cardiac injuries when clinically supported. 9. THERMOGRAPH/THERMOGRAMS only when used to evaluate pain associated with reflex sympathetic dystrophy ("RSD"), in a controlled setting by a physician experienced in such use and properly trained. 10. BRAIN MAPPING when done in conjunction with appropriate neurodiagnostic testing. It must be noted that the terms "normal," "normally," "appropriate" and "indicated" as used above are intended to recognize that no single rule can replace the good faith educated judgment of a health care provider. In addition, the utilization of the aforementioned terms is intended to indicate some flexibility and avoid rigidity in the application of these rules in the DECISION POINT REVIEW. This is further described later in this overview. TWENTY ONE DAY NOTIFICATION UPON COMMENCEMENT OF TREATMENT Following the commencement of treatment, the medical provider and the supporting staff MUST advise the responsible PIP insurance carrier within twenty ones days of the commencement of treatment. (N.J.A.C. 11:3-25.4)). There are certain exceptions to the aforementioned, however, the exceptions generally pertain to SECONDARY MEDICAL PROVIDERS as those who only perform a medical service or supply a care or durable medical good following receipt of a prescription from the treating medical provider. (N.J.A.C. 11:3-25.5(d)(1)) or if the medical condition of the injured person made it impossible to comply with the notice requirement ((N.J.A.C. 11:3-25.5(d)(3)). The notification to the PIP insurance carrier can be done by utilization of the NOTIFICATION OF COMMENCEMENT OF MEDICAL TREATMENT FORM approved by DOBI (N.J.A.C. 11:3-25.4(a)(1)) or by a bill from the medical provider that includes the following information: 1. Name, address and telephone number of the medical provider; 2. Name and address of the patient; 3. Name and address of the insured (if different than the patient); 4. Name and address of the insurance company; 5. Policy Number of the insured; and 14

6. Date of first treatment. (N.J.A.C. 11:3-25.4 (a)(2)). Furthermore, the aforementioned notification can be done by mail, facsimile or e- mail to the PIP insurance company. (N.J.A.C. 11:3-25.4 (c)). However, if mail is utilized, it MUST be done by certified mail, return receipt requested to avoid a non- receipt claim. NOTE: The addresses and facsimile numbers of all PIP insurance carriers can be located on the DOBI website. Failure to comply with the aforementioned twenty one day notice can result in the following reductions pursuant to N.J.A.C. 11:3-25.3(b): 10% reduction for submission 22 to 30 days late; 25% reduction for submission 31 to 60 days late; 50% reduction for submission 61 to 120 days late; 75% reduction for submission 121 to 160 days late; and 100% reduction for submission over 161 days late. Furthermore, any applicable reduction can not be retrieved directly from the patient (N.J.A.C. 11:3-25.7), however, the PIP insurance carrier MUST respond to the treating medical provider within fourteen days of receipt of the notification. (N.J.A.C. 11:3-25.3(f)). As can be clearly observed from aforementioned, it is imperative that complete and accurate information regarding the insurance information of the patient be obtained immediately. As such, the medical provider and the supporting office staff must be fully familiar with the concepts of PIP medical coverage and the correct PIP insurance carrier that is responsible for same. DECISION POINT REVIEW PLAN (PRIOR NOTICE, DECISION POINTS, ADDITIONAL CO- PAYMENT PENALTY, TEN DAY PERIOD) In addition to the promulgation of the MEDICAL PROTOCOLS (CARE PATHS), the restriction on compensation for certain diagnostic tests and the determination of validity for certain diagnostic tests, another of the 15

major changes ushered in with AICRA was the promulgation of DECISION POINT REVIEW PLAN and PRE- CERTIFICATION PLAN. The later will be discussed later in this overview. Pursuant to N.J.A.C. 11:3-4.7, all insurers must have a DECISION POINT REVIEW PLAN that provides for a timely review of the IDENTIFIED INJURIES (CARE PATHS) at DECISION POINTS, (i.e.. the previously referenced HEXAGONS on the CARE PATHS), and for the approval of the administration of the DIAGNOSTIC TESTS determined to have value in the evaluation of injuries, the diagnosis and development of a treatment plan for persons injured in motor vehicle accidents NOTE: The definition of DECISION POINT is set forth in N.J.A.C. 11:3-4.2 and reads those junctures in the treatment of IDENTIFIED INJURIES where a decision must be made about the continuation or choice of further treatment. DECISION POINT also refers to a determination to administer one of the [approved diagnostic] tests Furthermore, the regulation requires that each DECISION POINT REVIEW PLAN must have: Procedures for the injured person or his/her designee to provide PRIOR NOTICE to the insurer or its designee together with the appropriate CLINICALLY SUPPORTED findings that additional treatment or the administration of an approved DIAGNOSTIC TEST are MEDICALLY NECESSARY. (N.J.A.C. 11:3-4.7 (b)(1)); The prompt review of the notice and supporting materials submitted by the provider and authorization or denial of reimbursement for further treatment or tests. (N.J.A.C. 11:3-4.7(b)(1)(ii)); NOTE: There is no specific time period to define prompt review by statute or regulation. However, DOBI BULLETIN 99-05 asserts that all DECISION POINT REVIEW PLANS must have the time period that the insurance carrier must affirmatively deny the treatment or test. Furthermore, if there is a failure to deny in accordance with [the] rule, [then] the treatment or test may proceed until such time as a denial based on the determination of a physician is 16

communicated by the insurer. The [DECISION POINT REVIEW PLAN] should affirmatively state that if the insurer does not respond within the stated time frame, the provider may proceed with the treatment or test. In addition, the [DECISION POINT REVIEW PLAN] should provide that if a physical or mental examination is required, treatment may proceed while the exam is being scheduled, and until the results are available. The scheduling of a physical examination of the injured person where the notice and the supporting materials and other medical records are not sufficient to authorize or deny reimbursement of further treatment or tests. (N.J.A.C. 11:3-4.7(b)(1)(ii)); The denial of reimbursement for further treatment or diagnostic test shall be based upon the determination of a physician. (N.J.A.C. 11:3-4.7(b)(1)(iii)). Furthermore, the regulation also sets forth the requirements that the physical examination must meet. Specifically: The insurance company must notify the injured person or his/her designee that a physical examination is required. (N.J.A.C. 11:3-4.7(b)(2)(I)); The physical examination shall be scheduled within seven calendar days of the receipt of the demand for further treatment or tests UNLESS the injured person agrees to extend the time period. (N.J.A.C. 11:3-4.7(b)(2)(ii)); The physical examination shall be conducted by a provider in the same discipline as the treating provider. (N.J.A.C. 11:3-4.7(b)(2)(iii)); The physical examination shall be conducted at a location reasonably convenient to the injured person. (N.J.A.C. 11:3-4.7(b)(2)(iv)); The insurance company shall notify the injured person or his/her designee whether reimbursement for further treatment or tests is authorized as promptly as possible but in no case later than three days after the examination. If the examining provider prepares a written report concerning the examination, the injured person or his/her designee shall be entitled to a copy upon request. (N.J.A.C. 11:3-4.7 (b)(2)(vi)). 17

Furthermore, the regulation also sets forth that an ADDITIONAL CO- PAYMENT PENALTY, not to exceed fifty percent (50%) of the eligible charge for medically necessary treatment, diagnostic tests, surgery, durable medical goods and non- medical expenses that are incurred after notification to the insurer was required but before authorization for continued treatment or diagnostic test is made when the insurer is NOT notified as required under the DECISION POINT REVIEW PLAN or if there was a failure to provide medical records and/or there was a failure to attend the physical examination. However, the aforementioned does not apply if the insurer was given PRIOR NOTICE and failed to act in accordance with the DECISION POINT REVIEW PLAN. (N.J.A.C. 11:3-4.7(b)(3)). Furthermore, all DECISION POINT REVIEW PLANS, including any PRE- CERTIFICATION PLANS (to be described later in this overview), shall contain provisions for the disclosure of the procedures and descriptions of: The financial responsibility of the injured person, including co- payments and deductibles. (N.J.A.C. 11:3-4.7(d)(1)(I)); The financial responsibility of the provider for providing treatment or administering diagnostic tests without authorization from the insurer. (N.J.A.C. 11:3-4.7(d)(1)(ii); and How authorization for treatment and the administration of diagnostic tests may be obtained. (N.J.A.C. 11:3-4.7(d)(1)(iii). Furthermore, no DECISION POINT REVIEW REQUIREMENTS shall apply within 10 days of the insured event. (N.J.A.C. 11:3-4.7(e)). As can be derived from the pertinent regulations noted above, each insurance company can file its own DECISION POINT REVIEW PLAN for approval by DOBI. As such, the requirements can be different for each insurance company, and as such, the medical provider and the supporting office staff MUST have a copy of the pertinent DECISION POINT REVIEW PLAN in order to fully comply with all requirements. Although the aforementioned will obviously require additional work to the medical provider and the supporting office staff, the alternative is the loss of income for medical services rendered to the patient. 18

In addition to the above, when a denial is rendered by the insurance company under the DECISION POINT REVIEW PLAN, any internal appeal procedure must be followed. As noted in N.J.A.C. 11:3-4.7 (b)(1)(iii), any denial of reimbursement for further treatment or tests shall be based on the determination of a physician. As such, it is strongly recommended that when the provider discusses the denial with the insurance company doctor, the following information is obtained from the insurance company reviewing doctor: FULL NAME AND DEGREE; STATE OF LICENSE AND LICENSE NUMBER; EXACT RECORDS IN POSSESSION OF REVIEWER; IF CURRENT PRACTICE OF REVIEWER ALSO CONSISTS OF TREATING PATIENTS; IF SO, THE PERCENTAGE THAT THE CURRENT PRACTICE OF REVIEWER TREATS PATIENTS. Also, many insurance carriers are utilizing servicing agents for their DECISION POINT REVIEW PLANS. As such, documentation may be required to be submitted to both the insurance company and the servicing agent in order to completely protect the interests of the medical provider. In addition, it must be understood by the medical provider and the supporting office staff that DECISION POINT REVIEW and PRE- CERTIFICATION are two completely separate topics. Furthermore, DECISION POINT REVIEW does not mean that prior approval must be obtained for future treatment under the CARE PATHS or for the administration of the DIAGNOSTIC TESTS listed as having value in the evaluation of injuries, the diagnosis and development of a treatment plan for persons injured in motor vehicle accidents. Instead, there will certainly be many situations where the insurer denies authorization for the future treatment and/or diagnostic testing. As long full compliance is made under the DECISION POINT REVIEW PLAN and the medical provider can document the medical necessity of the treatment and/or diagnostic testing, compensation can be obtained for the services rendered in the PIP DISPUTE RESOLUTION process as described later in this overview. 19

PRE- CERTIFICATION PLANS Pursuant to N.J.A.C. 11:3-4.8, insurers may file for approval with DOBI for a PRE- CERTIFICATION PLAN that provides for pre- certification of certain medical procedures, diagnostic tests, or other services, non- medical expenses and durable medical equipment that are not subject to decision point review and that may be subject to over utilization. (N.J.A.C. 11:3-4.8(a)) However, any PRE- CERTIFICATION PLAN does not replace, or negate, the requirement to have a DECISION POINT REVIEW PLAN as described previously. In addition, a PRE- CERTIFICATION PLAN can not be utilized for treatment under the CARE PATHS or for utilization of the DIAGNOSTIC TESTS determined to have value in the evaluation of injuries, the diagnosis and development of a treatment plan for persons injured in motor vehicle accidents. Furthermore, the regulation required that any PRE- CERTIFICATION PLAN must have: No restrictions for medical services rendered within ten days of the insured event. (N.J.A.C. 11:3-4.8(c)); A licensed medical director must be designated by the insurer and the licensed medical director must ensure that: Any utilization decision to deny reimbursement for further treatment or testing must be made by a physician. In the case of treatment provided or prescribed by a dentist, the decision shall be by a dentist. (N.J.A.C. 11:3-4.8 (e)(1)); A utilization management decision shall not retrospectively deny payment for treatment provided when prior approval has been obtained, unless the approval was based upon fraudulent information submitted by the person receiving treatment or the provider. (N.J.A.C. 11:3-4.8 (e)(2)); The utilization management program shall be available, at a minimum, during normal working hours to respond to authorization requests. (N.J.A.C. 11: 3-4.8(e)(3)). In addition, PRE- CERTIFICATION PLANS may include provisions regarding COMPENSATION FOR DURABLE MEDICAL GOODS and other services. Specifically: 20