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ACCIDENT VICTIMS RIGHTS REQUIRING INSURANCE TO PAY FOR MEDICAL/ CHIROPRACTIC TREATMENT
If injured in a car accident, it is important to immediately seek hospital and medical or chiropractic treatment. Under the New Jersey No Fault Act, car insurance companies are supposed to make timely payment of medical bills for the driver and passengers injured in their cars or other non-commercial vehicles. Doctors should let their patients know there are now minimum deductibles under the NJ Car No Fault Law (PIP). The following is helpful information for injured people and their doctors to obtain payment for bills.
1 Bills should be submitted to PIP & also to Major Medical and to Patient The medical provider must first submit the unpaid bills to the patient's car insurance carrier Personal Injury Protection (PIP carrier), and/or any Blue Cross/Blue Shield or other related medical provider, and fill out any documents required by the insurance company.
2. Deductibles There is an initial $250.00 deductible, and thereafter the car insurance company pays 80% of medical bills under a medical fee schedule established by the State Dept. of Insurance. After $5,000 the car insurance company pays 100% under the fee schedule, unless an independent medical exam (IME) recommends no further treatment. We recommend doctors adequately notify patients that they are the primary responsible person for payment, not insurance companies. They are also called the PIP (Personal Injury Protection) benefits under the No Fault Law. For unpaid portions after 80% or under the deductible, the chiropractor and also patient should submit portions of bills the car insurance does not pay to their major medical carrier (ex- Blue Cross, Connecticut General). Patients must be told that if they have the lawsuit/ verbal threshold, they cannot even sue the negligent driver for their unpaid medical bills.
3. 21 day notification to PIP A State Law signed in January, 1996 requires automobile insurers to be notified by the claimant or medical provider in writing within 21 days following commencement of treatment of injuries sustained in an accident for which personal injury protection medical expense benefits are claimed. NJSA 39:6A-5(b) In addition, under this new law P.L. 1995, c 407, every bill for such treatment shall be submitted to the insurer and submitted by the medical provider if within 30 days of the date that treatment was rendered. N.J.S.A. 39:6A-5E (a) If the treating doctor does not give proper notification, the insurer can reserve the right to deny payment of the claim, and the treatment provider is prohibited from seeking a payment directly from the insured NJSA 39:6A-5(d) New Jersey Auto Insurance Law p 157 (GANN 2000). It is highly recommended that all doctors, hospitals, MRI facilities and physical therapy centers also send complete copies of all bills to the patient. Unfortunately, too often doctors or MRI facilities fail to advise patients of high unpaid bills, then put the patient in collection after the case is over for the unpaid bill.
Patients should submit copies of all bills to your car insurance company even if they believe the doctor or medical providers may also have submitted the bill to PIP. The patient should later send the bill to major medical. If the doctor's office and injured person does not keep their attorney's office informed in writing of unpaid medical bills, the attorney will not have sufficient information to provide to the defendant's insurance company and the Court when trying to settle a case.
4. New Care paths in Car Accident Cases Starting in 1999, all medical providers must follow "care paths" and most non emergency treatment approved by the car insurance company. Please make sure all treatment and bills are pre- approved by the car insurance company. The treating doctor should also contact the car insurance company prior to MRI or extensive treatment.
5. Dispute Resolution to require Payment of Doctor and MRI Bills following a car accident The intent of the no fault statute is to require speedy payment of hospital and doctor bills and prevent delay by insurance companies. An aggrieved personal injury protection claimant is entitled to receive "prompt payment of medical expenses, lost wages, essential services, survivor benefits and funeral expenses... without having to wait the outcome of protracted litigation." Kubiak v. Allstate Insurance Co., 198 N.J. Super. 115, 119 (App. Div. 1984), cert. den. 101 N.J. 290; Hoqlin v. Nationwide Mutual Insurance Co., 144 N.J. Super. 475, 479 (App. Div. 1976). This, together with the right to interest on overdue payments (then N.J.S.A. 39:6A 5(c)) and the ability under Rule 4:42 9(a)(6) to recover counsel fees if successful in the action should sufficiently guard against situations where an injured party is subjected to protracted aggravated consequences because of an insurer's failure to pay. Kubiak 198 N.J. Super. 119 120.
Disputes between the insurer and claimant as to whether or not benefits are due under the PIP statute may be resolved, at the election of either the claimant or the insurer, either by binding arbitration or by civil litigation. NJSA 39:6A-5(i) and NJSA 39:6A-5.1a, New Jersey Auto Insurance Law p 159 (GANN 2000) If the insurance company continues to delay and fails to pay medical benefits, the insured can either file suit in the Superior Court or file a demand for dispute resolution with American Arbitration Association. In New Jersey their office is located 1 Executive Drive, Somerset, New Jersey 08873. Filing fees are $325, paid by either the doctor/treatment provider or the patient. The check should be payable to the American Arbitration Association.
5a. NJSA 39:6A-5.1 sets forth in detail how AAA dispute resolution proceeds Dispute resolution proceedings shall include disputes arising regarding medical expense benefits provided under PIP law and disputes as to additional first party coverage benefits required to be offered. Disputes involving medical expense benefits may include, but not necessarily be limited to, matters concerning (1) interpretation of the insurance contract; (2) whether the treatment or health care service which is the subject of the dispute resolution proceeding is in accordance with the provisions pip law or the terms of the policy; (3) the eligibility of the treatment or service for compensation; (4) the eligibility of the provider performing the treatment or service to be compensated under the terms of the policy or under regulations promulgated by the commissioner, including whether the person is licensed or certified to perform such treatment; (5) whether the disputed medical treatment was actually performed; (6) whether diagnostic tests performed in connection with the treatment are those recognized by the commissioner; (7) the necessity or appropriateness of consultations by other health are providers; (8) disputes involving application of and adherence to fee schedules promulgated by the commissioner; and (9) whether the treatment performed is reasonable, necessary, and compatible with the protocols provided for pursuant to P.L.1998, c.21 (C.39:6A-1.1 et al.).
The dispute resolution professionals may review the entire claims file of the insurer, subject to any confidentiality requirement established pursuant to State of federal law. All decisions of the dispute resolution professional shall be in writing, in a form prescribed by the commissioner, shall state the issues in dispute, the findings and conclusions on which the decision is based, and shall be signed by the dispute resolution professional. All decisions of a dispute resolution professional shall be binding. The dispute resolution organization shall provide for the retention of all documents used in dispute resolution proceedings under this section and section 25 of this amendatory and supplementary act, including the written decision for a period of at least five years, in a form provided by the commissioner, or such additional time as may be established by the commissioner. The written decisions of the dispute resolution professional shall be forwarded to the commissioner, who shall establish a record of the proceedings conducted under the dispute resolution procedure, which shall be accessible to the public and may be used as guidance in subsequent dispute resolution proceedings.
Under the pre-1999 no fault law, AAA arbitrations were heard by a single arbitrator chosen by AAA. The arbitrator would fix the time and place for each oral hearing. Persons having a direct interest in the arbitration are entitled to attend hearings. Parties may offer such evidence as is relevant and material and shall produce such additional evidence as the arbitrator may deem necessary to an understanding and determination of the dispute. The arbitrator may subpoena witnesses or documents on his own initiative or upon the request of any party. The arbitrator shall be the judge of the relevancy and the materiality of the evidence offered, and conforming to legal Rules of Evidence is not necessary. An arbitrator may receive and consider the evidence of witnesses by affidavit, but it shall give it only such weight as the arbitrator deems it entitled to after consideration of any objections made to its admission.
According to the New Jersey No Fault Automobile Arbitration rules published by the American Arbitration Association "if the claimant prevails in the arbitration proceeding, the arbitrator shall direct the insurer to pay all the costs of the proceeding, including reasonable attorney's fees.
5b. New Emergent- Relief Arbitration Under PIP Ordinarily, the minimum time for a regular arbitration is three months, including a 45 day initial waiting period and a 20 day notice of hearing. New Rule 3A of the American Arbitration Association's rules governing Personal Injury Protection Arbitration requires appointment of an arbitrator within one business day of the demand, the establishment of a schedule for consideration within two business days of the appointment and the granting of any relief within three additional days. 160 N.J.L.J. 373, NJ Law Journal May 1, 2000, p 5. The new rules were drafted by the state Department of Banking and Insurance. They went into effect April 1, 2000 and are posted on the AAA's Web site (www.adr.org/rules/state/nj no-fault rules.html).
6. SUIT IN SUPERIOR COURT INSTEAD OF ARBITRATION AND REIMBURSEMENT OF ATTORNEYS FEES In Miskofsky v. Ohio Casualty Insurance Co., 203 N.J. Super. 400 (Law Div. 1984) the court examined a Superior Court PIP suit and found medical benefits must be afforded. The court awarded attorneys fees, holding:
Counsel for plaintiff has submitted an affidavit of services based on an hourly rate of $100.00 which this court believes to be fair and reasonable. "I shall, therefore, award counsel fees against defendant and in favor of plaintiff in the amount of $1,790.00 as well as costs representing actual disbursements in the amount of $123.12 or a total of $1,913.12" Miskofsky at 416 417.
All other reported cases indicate attorneys fees should be awarded to Plaintiff's counsel. Additionally, the court in Olewinsky v. Aetna Casualty and Surety, 234 N.J. Super. 429 (Law Div. 1988) examined an application and request for attorney's fees for services rendered in connection with the personal injury claim. The plaintiff was pregnant at the time she was involved in an automobile accident. Defendant Aetna refused to pay certain medical expenses to the plaintiff and for her child. A claim was brought for medical payments. Both claims were settled at a conference in which the court participated. Upon motion of the plaintiff, the court in Olewinsky held: "based upon consideration of the underlying purpose of Rule [4:42 9(a)(6)] allowing attorney's fees as well as the nature of PIP claims and the realities of PIP settlements, this court concludes that attorney's fees should be allowed when a case is settled at anytime after the commencement of suit, for a sum which exceeds the original offer by the insured made prior to the institution of suit". Id. at 432. The court also noted in a footnote that attorney's fees are also allowed under the PIP statute, N.J.S.A. 39:6A 5, where an insured claimant prevails in an arbitration proceeding for PIP benefits.
The court concluded: The intent of the Rule allowing attorney's fees is to charge the insurer with additional expenses necessitated by an insured who is forced to bring suit for his claim. But, the realities of PIP settlements are that the insured must pay his own attorney fees. This effectively undermines the intent of the Rule. In order to implement the intent of the Rule, the definition of a "successful claimant" must be given liberal interpretation so as to encompass not only judgments and last minute settlements, but settlements effectuated prior to trial as well. Clearly, a claimant who obtains a judgment for the full amount of his claim is a "successful claimant". Similarly, a claimant who obtains a judgment for less than the full amount he seeks is also a "successful claimant" under the law. Therefore, logic should dictate that a claimant who obtains either a settlement for the full amount of his claim prior to the trial date or who obtains a settlement for a sum less than the full amount of his claim, but for more than that which he was offered prior to the institution of suit, should similarly be categorized as a "successful claimant". He is, after all, getting more than that which he would have obtained in the first place. In this respect, therefore, he is successful.
Finally, it is simply unfair to burden an insured with attorneys fees in order to receive moneys to which, at least in part, he was entitled to in the first place. Olewinsky . at 433 434.
The court in Olewinsky held that the plaintiff was entitled to an award of attorney's fees. The court held that the sum of $4,500.00 plus expenses, was fair and reasonable for payment of attorney's fees. Today, the statute N.J.S.A. 39:6A 5(c) requires that if a claimant prevails at arbitration, the insurer shall pay all costs, including reasonable attorney's fees. Thus, the imposition of attorney's fees is mandatory.
In Van Houten v. New Jersey Manufacturer's Insurance Co., 159 N.J. Super. 208 (Cty. Ct. 1978), aff'd 170 N.J. Super. 415 (App. Div. 1979), an insured who brought a cause of action against an insurer for failure to provide personal injury protection coverage for his medical expenses was determined to be a successful claimant and as provided by the Rule permitting attorney's fees. The court noted that a party need not prevail in every claim in order to be successful. Id. at 211. The court in Van Houten found persuasive plaintiff's argument that an insured is already a weak party to an insurance contract, and to make him hire an attorney throughout the trial or motion would put him at an even greater disadvantage. It is incongruous to require plaintiff to bypass a settlement offer and to proceed to trial in order to "earn" counsel fees, especially when a settlement and trial would have substantially achieved the same result. Also compelling plaintiff to try the case under these circumstances would be contrary to the strong public policy and judicial commitment that justice be served by encouraging the settlement of claims thereby avoiding or terminating litigation. Id. at 212. (Citations omitted). The court in Van Houten, concluded that had the plaintiff proceeded to trial, there is no doubt that the judge could have awarded a counsel fee. The court in Van Houten noted certain facts: 1. After the accident there was a substantial and unreasonable delay by defendant in conducting its investigation and providing a measure of coverage under No Fault. Such delay is distinguishable from mere tardiness by an insurer in forwarding payment. 2. This unnecessary delay on defendant's part induced plaintiff to seek the services of an attorney to intercede on his behalf, with the necessity of bringing suit. 3. After the complaint was filed, defendant continued to resist coverage under a color of contention which in this case was inappropriate. 4. And finally, after a period of eight months following the accident, defendant, just prior to trial, only then agreed to pay plaintiff an amount closely approximate to the original claim for loss of income coverage sought by the insured. 159 N.J. Super. at 215.
A denial of counsel fees, would thwart the underlying public policy that insurers not raise groundless disclaimers, abandon their insured and induce costly and protracted litigation. Van Houten at 215. To require an insured to fully litigate his claim to a successful adjudication essentially because his accumulated counsel fees cannot otherwise be obtained is contrary to the principles of the rule and the spirit underlying the No Fault Act. Rather, it was the opinion of the Van Houten court that an award of counsel fees would more equitably serve the principals upon which No Fault is founded. Id. at 216. The court noted "upon review of the discovery section of the No Fault Act it is clear that the burden of investigating personal injury claims was primarily with the insurance carrier and not with the insured. N.J.S.A. 39:6A 13 et seq. Under the Act the injured person is essentially required to "...sign all forms, authorizations, releases for information ...which may be necessary to the discovery of the above facts, in order to reasonably prove the injured person's losses. [N.J.S.A. 39:6A 13(f)]. The Van Houten court was satisfied that the plaintiff substantially complied with these obligations. The carrier is entitled to substantial discovery from the claimant's doctor, hospital, clinic, etc. or from the carrier's own physician. See N.J.S.A. 39:6A 13(b) and (d). The court noted if defendant encountered difficulty with such discovery, then it ought to have sought the appropriate relief from plaintiff's doctor and/or employer. N.J.S.A. 39:6A -13(g). Van Houten. at 217.
It has been uniformly held by the courts that Rule 4:42 9(a)(6) permitting an award of counsel fees against an insured's personal insurance company was adopted in order to prevent or discourage groundless disclaimers by the insurance carrier. See e.g. Tooker v. Hartford Accident and Indemnity Co., 136 N.J. Super. 572, 576 (App. Div. 1975). Maros v. TransAmerica Insurance Co., 143 N.J. Super. 307 (Law Div. 1976); New Jersey Manufacturer's Insurance Co. v. Consolidated Mutual Insurance Co., 124 N.J. Super. 598 (Law Div. 1973). In each of the above cases the courts deemed that counsel fees be awarded with a view towards equity for the insured.
7. Interest on unpaid bills N.J.S.A. 39:6A-5 (g) provides “personal injury protection coverage benefits shall be overdue if not paid within 60 days after the insurer is furnished written notice of the fact of a covered loss and the amount of same. N.J.S.A 39:6A-5E (h) added that all overdue payments shall bear simple interest at the percentage of interest prescribed by the Court Rules. An insurer can avoid the payment of interest only where it "has reasonable proof to establish that the insurer is not responsible for the payment..." The allowance of interest is not, as defendant argues, dependent upon the presence or absence of good faith on the part of the insurer. Ortiz at 508-509 The court also affirmed the awarding of the counsel fee.
8. Statute of Limitations Pursuant to N.J.S.A. 39:6A 13.1 an action for payment of benefits must be commenced not later than 2 years after the expense, or when in the exercise of the reasonable diligence insured the should know the loss was caused by the accident, or not later than 4 years after the accident, whichever is earlier; provided, if benefits have been paid before then an action for further benefits may be commenced not later than 2 years after the last payment of benefits. In Zupo v. CNA Ins. Co., 98 N.J. 30 (1984), the Supreme Court adopted the principal that when an automobile liability insurance carrier has made payments of personal injury protection (PIP) benefits in connection with a compensable injury and is chargeable with knowledge at the time of its last payment that the injury will probably require additional treatment in the future, then the "two years after payment" provision of N.J.S.A. 39:6A 13.1 will not bar an action brought within a reasonable time after rejection of a prompt claim for payment of additional medical expenses for such treatment. Id. at 31 32. Our New Jersey Supreme Court has often rejected a limitations defense where the defendant has contributed to the delay. Zaccardi v. Becker, 88 N.J. 245, 256 (1982)
CONCLUSION In conclusion, If the claimant is successful, case law, the statute and the AAA rules make counsel fees and interest available. Action must be taken to help the injured party have their medical bills paid prior to the expiration of any statute of limitation.
[This article was revised and copyright in 2000, undated from Kenneth Vercammen's original article that appeared in the New Jersey Law Journal August 29, 1994 (c)1994 New Jersey Law Journal ]