Doctors, lawyers and insurance executives accused one another of fleecing N.J. drivers
Thomas Considine, the state's banking and insurance commissioner, is seen in this file photo, will have the final say over how the rules governing the personal injury portion of every auto insurance policy should change.TRENTON — Doctors, lawyers and insurance executives accused one another of fleecing New Jersey drivers at a hearing Thursday in Trenton, and debated a controversial administration proposal it says would control the rising cost of accident-related medical treatment.
The state’s banking and insurance commissioner, Thomas Considine, will have the final say over how the rules governing the personal injury portion of every auto insurance policy should change.
A spokesman for the department said it had been flooded with 12,000 letters since August, when it announced its intention to review its policy, and it has extended the written comment period from Sept. 30 to Oct. 17.
Assemblyman Gary Schaer (D-Passaic), chairman of the Financial Institutions and Insurance Committee, said he called the hearing at the request of opponents "to bring increased transparency to this complex subject."
Schaer said he would review the complaints raised at the hearing and submit a letter to the department with suggested changes.
The proposed rules include capping the cost of outpatient hospital care for the first time to match what surgery centers get paid — a move that would close a loophole exploited by some pain-management doctors and chiropractors and a "certain North Jersey hospital."
Insurance lobbyists have identified the hospital as the Meadowlands Hospital Medical Center in Secaucus.
Under the proposed plan, doctors would have only five days to appeal an insurance company’s denial of a claim, and require a patient appeal to an internal review panel before seeking an outside arbiter.
The state insurance director, Doug Wheeler, said arbitration currently adds $1 billion in costs to the industry each year.
Wheeler said the changes are needed to stabilize the "out of control" costs that made New Jersey the 50th most profitable state for the auto insurance industry last year, down from 12th in 2007.
"I don’t think anyone would dispute the need for reform,’’ Schaer said. "We need to provide profitability somehow, someway so the insurers will continue to do business here. ... Forgive the question, but how much profitability is required to provide to the insurance carrier?"
Dennis Brotman, a personal injury lawyer from Lawrenceville, said the changes "don’t address the abuses by the insurance industry" that keep thousands of patients waiting up to a year for appeals to be decided.
He said some of his clients have "been on the brink of suicide" because they cannot get the necessary care.
But Michael Van Wagner, a vice president of New Jersey Manufacturers Insurance Co., told committee members he thought the proposed changes worked in the consumers’ favor.
"By capping the price of many pain management procedures," he said, "this will provide us with some certainty of what we will be paid and eliminate the need for very costly arbitration — a cost that does not benefit the policy holder at all."
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