Bill Text: NJ SCR105 | 2012-2013 | Regular Session | Introduced
Bill Title: Determines that proposed PIP rules are inconsistent with legislative intent.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2012-05-03 - Introduced in the Senate, Referred to Senate Commerce Committee [SCR105 Detail]
Download: New_Jersey-2012-SCR105-Introduced.html
Sponsored by:
Senator NICHOLAS P. SCUTARI
District 22 (Middlesex, Somerset and Union)
SYNOPSIS
Determines that proposed PIP rules are inconsistent with legislative intent.
CURRENT VERSION OF TEXT
As introduced.
A Concurrent Resolution concerning legislative review of Department of Banking and Insurance proposed rules revising certain personal injury protection regulations.
Whereas, Pursuant to Article V, Section IV, paragraph 6 of the Constitution of the State of New Jersey, the Legislature may review any rule or regulation adopted or proposed by an administrative agency to determine if the rule or regulation is consistent with the intent of the Legislature as expressed in the language of the statute which the rule or regulation is intended to implement; and
Whereas, On August 1, 2011, the Department of Banking and Insurance (DOBI) proposed various revisions to the personal injury protection (PIP) regulations found in subchapters 4 and 5 of chapter 3 of Title 11 of the New Jersey Administrative Code, citing to the "Automobile Insurance Cost Reduction Act," P.L.1998, c.21 (C.39:6A-1.1 et seq.), hereinafter the "act," for the statutory authority to issue these proposed regulations; and
Whereas, On February 21, 2012, in response to thousands of comments received on these proposed PIP regulations, including many comments indicating that the proposed regulations are inconsistent with the legislative intent of the act, DOBI provided notice of several substantial changes to the new and amended rules as initially proposed; and
Whereas, For example, proposed new N.J.A.C. 11:3-4.7B provides for a uniform process in which insurers can require that a provider shall have filed for an internal appeal before filing for arbitration, thereby formalizing a mandatory internal appeal process, which is contrary to the legislative intent as provided in the act; and
Whereas, DOBI proposes revisions to various regulations to provide that certain PIP arbitrations, in which the demand is less than $1,000, be decided by the dispute resolution professional based on the papers submitted without an in-person hearing or argument in contrast to the intent of the act, which provides for a "dispute resolution proceeding;" and
Whereas, DOBI proposes new N.J.A.C. 11:3-5.6(e) to establish a process for determining the reasonableness of attorney's fee awards despite the fact that the act specifically provides that the reasonableness of fees is to be determined "in accordance with a schedule established by the New Jersey Supreme Court;" and
Whereas, In addition to the requirements of the act, section 10 of P.L.1988, c.119 (C.39:6A-4.6) also addresses automobile insurance cost reduction by requiring DOBI to promulgate medical fee schedules on the basis of the type of service provided, and to incorporate the reasonable and prevailing fees of 75% of the practitioners within the region to be adjusted for inflation biennially; however, the proposed fee schedules in the proposed regulations fail to adequately account for inflation and do not represent the prevailing fees of 75% of the practitioners within the region; and
Whereas, The above provisions proposed by DOBI are inconsistent with the plain language of the "Automobile Insurance Cost Reduction Act" and are, therefore, contrary to the legislative intent as expressed in the act and related statutes; now, therefore,
Be It Resolved by the Senate of the State of New Jersey (the General Assembly concurring):
1. The Legislature declares that the proposed rules, amendments, and repeals to revise the regulatory framework for the provision and payment of personal injury protection benefits under New Jersey's private passenger automobile insurance system proposed by the Department of Banking and Insurance on August 1, 2011, and subsequent revisions proposed on February 21, 2012, are not consistent with the intent of the Legislature as expressed in the language of the "Automobile Insurance Cost Reduction Act," P.L.1998, c.21 (C.39:6A-1.1 et seq.) and other parts of New Jersey statutory law.
2. The Secretary of the Senate and the Clerk of the General Assembly shall transmit a duly authenticated copy of this concurrent resolution to the Governor and the Commissioner of Banking and Insurance.
3. Pursuant to Article V, Section IV, paragraph 6 of the Constitution of the State of New Jersey, the Department of Banking and Insurance shall have 30 days following transmittal of this resolution to amend or withdraw the proposed regulations or the Legislature may, by passage of another concurrent resolution, exercise its authority under the Constitution to invalidate the regulations in whole or in part.
STATEMENT
This concurrent resolution embodies the finding of the Legislature that the rules proposed by the Department of Banking and Insurance (DOBI) on August 1, 2011, and subsequent revisions proposed on February 21, 2012, pursuant to the "Automobile Insurance Cost Reduction Act," P.L.1998, c.21 (C.39:6A-1.1 et seq.) (the "act") are not consistent with the intent of the Legislature as expressed in the language of the act.
The proposed revisions to the regulations pertaining to personal injury protection (PIP) benefits, under New Jersey's private passenger automobile insurance system are found in subchapters 4 and 5 of chapter 3 of Title 11 of the New Jersey Administrative Code. The statutory authority for these proposed regulations is found in the act and related statutes.
As stated in the concurrent resolution, the following provisions proposed by DOBI are inconsistent with the plain language of the act and related statutes and are, therefore, contrary to the legislative intent as expressed in the act.
The proposed new N.J.A.C. 11:3-4.7B provides for a uniform process in which insurers can require that a provider shall have filed for an internal appeal before filing for arbitration, thereby formalizing a mandatory internal appeal process, which is contrary to the legislative intent as provided in the act.
In addition, DOBI proposes revisions to various sections of the regulations to provide that certain PIP arbitrations, in which the demand is less than $1,000, be decided by the dispute resolution professional based on the papers submitted without an in-person hearing or argument in contrast to the intent of subsection c. of section 24 of P.L.1998, c.21 (C.39:6A-5.1), which provides for a "dispute resolution proceeding."
DOBI also proposes new N.J.A.C. 11:3-5.6(e) to establish a process for determining the reasonableness of attorney's fee awards despite the fact that the enabling statute, section 25 of P.L.1998, c.21 (C.29:6A-5.2), specifically provides that the reasonableness of fees is to be determined "in accordance with a schedule established by the New Jersey Supreme Court."
Finally, the proposed regulations contradict and fail to adequately comply with provisions of the law requiring DOBI to establish fee schedules and adjust those schedules for inflation biennially. Section 10 of P.L.1988, c.119 (C.39:6A-4.6) requires DOBI to promulgate medical fee schedules on the basis of the type of service provided, and to incorporate the reasonable and prevailing fees of 75% of the practitioners within the region.
The resolution provides that Department of Banking and Insurance will have 30 days from the date of transmittal of this resolution to amend or withdraw the proposed rules and regulations, or the Legislature may, by passage of another concurrent resolution, exercise its authority under the Constitution to invalidate the rules and regulations in whole or in part.
