One of the interesting aspects or evolution of New Jersey PIP law is that is has devolved from a comprehensive all encompassing benefit to one that is either limited or non-existent. The historians will remember that until the 1990 Fair Automobile Insurance Reform Act, there was not coverage limit. That changed to $250,000 in 1990 along with the ability to have major medical be deemed primary.. In 1998, AICRA brought the common $15,000 PIP policies and mandated arbitration.
The question that lurked is what happened when major medical said go to PIP, PIP as secondary pays and then seeks to subrogate against the major medical carrier.
The Appellate Division said you’re out of luck.
(1) “When a PIP-as-secondary insurer receives a claim eligible for primary coverage, it must deny coverage and send the insured a notice advising them to submit the claim to their health insurer”
(2) ” Health insurers are also required to make prompt payment of claims, but are governed by N.J.A.C. 11:22-1.1 to -1.16″
(3) “Reimbursements of payments incorrectly made by auto carriers are permitted by inter-company agreement or arbitration amongst PIP insurers, N.J.S.A. 39:6A-11, but this court has determined that health insurers are not subject to PIP arbitration”
(4) “A health insurer’s duty to process a claim, however, does not arise until it has received a request for payment directly from the insured or a healthcare provider. N.J.A.C. 11:22-1.5(a); Bull. No. 05-25. If, after proper submission, a health insurer disputes coverage of a requested medical expense, the insured must pursue the internal appeals
process under the plan.”
(5) “Where both the PIP and health insurer dispute coverage, the health insurer becomes obligated to act as the
primary. N.J.A.C. 11:3-37.11(a)”
(6) This is the most important part of the opinion ” If plaintiff believed that defendant unreasonably denied coverage, it could have requested that P.M. pursue defendant’s internal appeals process, or obtained an assignment of rights from the insured and pursued the appeal itself. Instead, it simply paid the claim. Consequently, plaintiff has failed to establish any right of subrogation
(7) When PIP pays, they forfeit their recovery right.
This is interesting, right?