New Jersey Automobile Medical Fee Schedule Held to Apply to New York No-Fault Claimant's Treatment in New Jersey

PIP – PREVAILING FEE FOR HEALTH CARE SERVICES RENDERED OUTSIDE NEW YORK – NEW JERSEY AUTOMOBILE MEDICAL FEE SCHEDULE
Matter of Arbitration Between Specialty Surgical of Secaucus, LLC and Geico Ins. Co.
(AAA Case 412012124315, Arbitrator Michael B. Parson, Esq., decided 1/13/2014)

A New York EIP, insured under a New York auto policy. (is picked up by a limo, driven to, and) treats in northern New Jersey for injuries sustained in a New York motor vehicle accident.  What fee must the NY PIP insurer pay for the the NJ health care provider's services?

11 NYCRR § 68.6, also known as Regulation 83, answers that question:

If a professional health service reimbursable under section 5102 (a)(1) of the insurance law is performed outside New York State, the permissible charge shall be the prevailing fee in the geographic location of the provider.  

So what is "the prevailing fee in the geographic location"?  Who decides what that is?  Can the rates set by the New Jersey Automobile Medical Fee Schedule be considered the prevailing fees for New Jersey locations?  In the opinion of AAA No-Fault Arbitrator Michael B. Parson, Esq., the answer to that last question is yes, the New Jersey fee schedule applies to determine the NY PIP-compensable fee.

Arbitrator Parson reasoned as follows:

The question before me therefore is, what is the prevailing fee and how is it to be determined in this forum? Applicant would argue that the regulation does not limit reimbursement to a foreign state's fee schedule. I agree to the extent that a fee schedule is not itself dispositive of the issue. However, I find that in a state like New Jersey, which has established a fee schedule specifically for patients being treated as a result of an automobile accident, the expectation of providers in New Jersey in treating such injuries is that they will be limited to the fees in the schedule. The fact that a person seeking treatment resides in another state, is, in my view, simply incidental and does not change that expectation. I find that the New Jersey fee schedule is therefore a fair indication of the prevailing fees for treating injuries sustained in a motor vehicle accident in the geographic location where the treatment was rendered in this case.

Treating a New York resident should not provide an opportunity for a provider to charge as high a fee for services as possible due solely to the accident of residency. Under the present health care system in the United States, there are many different fees charged for the same procedure in most jurisdictions, depending on the circumstances. For example, in situations that do not involve automobile accidents, a person with private health insurance will pay far less, as will the private insurance company, than someone who is not covered. Different insurance companies will pay different rates, depending on a number of factors. Because of these types of variances in fees charged and paid, I must look to the intentions of the foreign state relative to the treatment of persons injured in automobile accidents. Both New York and New Jersey have sought, by the institution of fee schedules for treatment of persons injured in automobile accidents, to limit fees that may be charged for such services. There are many policy reasons for this, not the least of which is to permit coverage and treatment that will not exhaust the policy limits of the injured parties. I note too that NJSA 11:3-29.1, in describing the purpose and scope of the New Jersey fee schedule for automobile accident related treatment does not make any exclusion for out of state patients, does not limit its terms to in-state accidents and states, at 11:3-29.5:

No health care provider may demand or request any payment from any person in excess of those permitted by the medical fee schedules and this subchapter, nor shall any person be liable to any health care provider for any amount of money that results from the charging of fees in excess of those permitted by the medical fee schedules and this subchapter.

Accordingly, I find that the New Jersey fee schedule should apply to the surgery and take judicial notice of that fee schedule. Although there was vigorous argument from Applicant's counsel that the New Jersey fee schedule should not be the basis upon which my determination of the prevailing facility fee in Northern New Jersey is made, both parties herein agreed at hearing that were I to find that that the New Jersey fee schedule applies, the sum provided in that schedule for the CPT code billed here, for the services rendered by the Applicant is $1,265.10. My own examination of the New Jersey fee schedule, reveals that the $1,265.10 figure is correct.

Accordingly, I find that the Applicant should be paid in the total sum of $1,265.10.