A New Jersey Supreme Court has upheld a lower court’s ruling that the state’s Personal Injury Protection, or PIP, medical fee schedule is appropriate.

Nearly two years ago, the New Jersey Department of Banking and Insurance revised the medical fee schedule for reimbursing doctors who treat auto injuries. Since then, the PIP fee schedule has been the subject of litigation.

In August, the New Jersey Superior Court, Appellate Division, in Trenton, sided with insurance regulators on the new fee schedule, indicating that those appealing the new rates failed to provide supporting testimony for their case. The Superior Court also ruled, however, that regulators examine their use of the controversial Ingenix reimbursement database for setting rates.

The Ingenix database has been abandoned by several insurance carriers following an investigation by New York Attorney General Andrew Cuomo, who alleged the database, owned by UnitedHealthcare, manipulated rates and relied on outdated information to determine reimbursement rates. A new non-profit organization will develop an independent database for consumer reimbursement as well as a website for consumers to compare prices before choosing a doctor.

Following the Superior Court decision, the Alliance for Quality care petitioned for a stay on the fee schedule, which was denied by the Supreme Court Nov. 20.

Neil N. Jasey

New Jersey Insurance Commissioner Neil N. Jasey said his department is “gratified” by the ruling.

“The PIP fee schedule is the product of many years of diligent work by the Department which included a lengthy process that incorporated significant input from many interested parties from within the provider community,” Jasey said in a statement.

He added that PIP costs have been “rising dramatically,” resulting in upward pressure on rates.

“The department views the implementation of the PIP fee schedule as a means to help contain health care costs associated with automobile accidents, exerting downward pressure on insurance rates and greatly benefiting New Jersey’s auto insurance consumers.”

The Supreme Court’s decision was also applauded by the American Insurance Association, on behalf of its 350 property-casualty insurer members.

“This decision has largely affirmed the department’s efforts to reduce costs for New Jersey auto insurance consumers, pay doctors a reasonable fee for their service and improve the efficiency of the overall claims handling process,” said David Snyder, AIA vice president and associate general counsel of public policy, in a statement. “AIA has long supported these efforts. Containing costs is fundamental to maintaining New Jersey’s competitive automobile insurance system.”