N.J. Reforms Auto Accident Patient Care
By Mark E. Ruquet
NU Online News Service, June 4, 2:44 p.m. EST? As part of the effort to improve New Jersey's auto insurance system, state regulators said they will begin work on improving the healthcare delivery system that carriers use for claimants.
The New Jersey Department of Banking and Insurance announcement was the first update on the efforts of the Auto Working Group, a coalition of the insurance industry, attorneys, medical providers and an advocate for injury victims.
Department Commissioner Holly C. Bakke said the department would be taking immediate action on six issues raised by the group.
The department said it would begin to certify medical networks used by automobile insurers that treat accident victims and set standards for the quality of care the injured receives. Carriers would also be required to give more information to policyholders and seek approval for the medical networks.
The fee schedule for medical providers set by the Auto Insurance Cost Reduction Act of 1998 will be reviewed, the department said.
The department will seek to reduce treatment delays for accident victims by "revamping care paths, which regulate treatment and require ?decision points' for certain common spinal injuries."
There will also be an effort to reduce arbitration time and costs. The department said this would be accomplished, in part, by enforcing prompt-pay standards by auto insurers.
To catch fraud in the underwriting process, the department said it would boost scrutiny of insurers and develop tests for fraud prevention in the department's Market Conduct exams.
The Insurance Service Organization will be enlisted to perform a comprehensive study to compare the cost of the state's no-fault system with a fault-based system in an effort to determine whether the program should be scrapped.
Mary Caffrey, the department's assistant commissioner for public affairs, said this is only the beginning of the process to reform auto insurance in the state. She said the department has "a lot of faith" in the process of the working group to produce "a lot of results."
"This is the basis of the dialogue to come," Ms. Caffrey said.
The Coalition for Auto Insurance Competition issued a statement expressing concern that the department's panel is not focusing on the need for reforms that would promote competition and bring more insurers back to New Jersey.
John Friedman, chairman the of coalition of insurance companies, associations and other business groups, said it is time for the administration of Gov. James E. McGreevey to put forward "specific proposals that will prevent a further shortage in auto insurance availability."
In response, Ms. Caffrey said the department is aware of the issues facing companies. She said both the department and working group will continue to work on the "thorny issues" facing the industry and legislators through the summer, and to develop proposals for reform.
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