6 I Summer 2019 www.anjc.info e Q&A Medicare Update Legislative Update LEGAL Q&A ANJC Scholarship LEGAL EASE ship irector’s UPDATE NSURANCE Update By Jeffrey Randolph ANJC Legal Counsel On March 26, 2019, the New Jersey Supreme Court held in a split decision that auto accident victims who chose the limited $15,000 coverage for No-Fault (PIP) benefits in their auto insurance policy cannot recover medical expenses exceeding that amount in their personal injury case from the third party that caused the accident. The Court held that the New Jersey Legislature, when it amended the no-fault laws in 1998 to allow car owners to choose lower amounts of PIP coverage in return for lower premiums, never intended to depart from a no-fault payment system for medical bills and move to a fault-based system. The Court discussed the legislative history underlying the PIP statutory scheme and the Legislature’s efforts to reduce the cost of auto insurance while still providing benefits to those who need them. The Legislature created options for coverage as low as $15,000 in exchange for lower premiums in the 1998 amendments. There are numerous misconceptions and rumors concerning the extent and scope of this decision. First and foremost, this decision does not reduce the amount of PIP coverage that a person can obtain in New Jersey to a maximum of $15,000. Insureds in New Jersey can still obtain up to $250,000 in PIP coverage provided they opt for such coverage in their policy and they pay the corresponding premium which is higher than $15,000 PIP coverage. The decision also does not prevent recovering in excess of the limited PIP coverage from other sources such as secondary health insurance coverage or a lien on a personal injury settlement. If a patient has secondary major medical coverage and PIP limits have been exhausted, the excess bills may still be submitted to major medical for payment subject to the terms of the major medical insurance policy. Also, if a doctor has a letter of protection signed by the patient’s personal injury attorney, the attorney is still obligated to protect the doctor’s lien and pay any unpaid bills in excess of the limited PIP coverage not to exceed the New Jersey PIP Fee Schedule amount of those bills. The decision reversed an Appellate Division decision that allowed victims in auto accident cases to recover medical expenses exceeding their $15,000 PIP coverage and present those expenses to the jury at a personal injury trial. The Appellate Division had previously ruled admissible at trial evidence of medical expenses above the $15,000 PIP policy limit but below the $250,000 PIP ceiling set forth in the PIP statute. In sum, this decision only precludes attempting to recover for medical bills in excess of a limited PIP policy from the person who caused the accident. These excess bills are not “boardable” to be presented to a jury to award a line item of damages for these excess, unpaid bills. The Court held that based upon their extensive review of the PIP statutory legislative history, they could not conclude that the Legislature intended the PIP statutes to allow fault-based suits for economic damage claims for medical expenses in excess of an elected, lesser amount of PIP coverage. At present, there have been indications that a bill or bills will be submitted in the New Jersey Legislature to override this decision by legislative act. However, as of the date of this article, none have been advanced in either house and, thus, the Supreme Court decision remains the law of the state. Misconceptions Concerning the Supreme Court Decision Limiting Third Party Reimbursement for Limited No-Fault Policies