New Jersey Governor Signs Bills that Allow Plaintiffs to Recover Medical Bills that Exceed their PIP Limits

On August 15, 2019, in response to the New Jersey Supreme Court’s decision in Haines v. Taft, the Governor of New Jersey signed a bill which allows plaintiffs injured in motor vehicle accidents to recover at trial for their medical bills that are unpaid and exceed their PIP insurance coverage limits. The bill takes effect immediately and permits an injured plaintiff who has less than $250,000 in PIP coverage to recover for medical expenses that are not paid through PIP insurance coverage because the plaintiff selected a lower PIP limit. The Haines decision focused attention on consumers who buy low-cost auto policies with PIP limits at levels as low as $15,000, instead of the standard $250,000. The New Jersey Supreme Court held that an injured party may not sue the other driver for unpaid medical bills in excess of their PIP coverage limits. Sponsors of the legislation said relief from Haines was needed because the limit on suits upheld by the Court had the effect of leaving people of modest means who purchase insurance with low PIP limits and who suffer injuries in automobile accidents saddled with unpaid medical bills.

In a companion bill signed the same day, New Jersey limited recovery of unpaid medical bills to the amounts payable pursuant to the PIP fee schedule. This second bill was enacted in response to concerns that the first bill would result in an increase in auto insurance rates. While this new legislation will permit injured persons to recover all unreimbursed medical expenses not covered by his or her PIP coverage, it also subjects unreimbursed medical expenses in excess of a driver’s PIP limits to the automobile medical fee schedules.

Litigators handling matters with unpaid medical bills incurred from an automobile accident, will need to retain a vendor to code the bills under the New Jersey PIP Fee Schedule. Medical providers are precluded from balance billing the patient for any amount that exceeds the PIP schedule. 

The New Jersey legislature may reexamine its PIP laws to determine whether the State should revert back to the $250,000 mandatory PIP requirement. Medical expenses incurred from motor vehicle accidents is a hot button issue that continues to be the subject of intense scrutiny in New Jersey.