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New Jersey Proposes Substantial Changes to PIP Regulations

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The New Jersey Department of Banking and Insurance has issued a notice of proposed substantial changes to the Personal Injury Protection regulations.

The original regulation was proposed Aug. 1, 2011.  Due to the large volume of comments received, the Department of Banking and Insurance decided to make substantive changes, which will trigger a further comment period, ending April 21, 2012.

Changes include:

· A new, separate fee schedule for hospital outpatient departments, the Hospital Outpatient Surgical Facility. Previously ASCs and HOPD were lumped together on the same fee schedule. This new HOSF includes procedures that are not payable if performed at ASCs, and the rates are higher.
· Deletion of 117 procedure codes performed by neuro and spine surgeons from the physician fee schedule. These will now be paid UCR for the professional fee. Some remain on the Outpatient Surgical Facility and HOSF schedules, so the facility would be reimbursed per fee schedule. 
· Deletion of WCMCO network language.
· Correction of various errors.

Codes on the Physician Fee Schedule that do not have an amount in the outpatient surgical facility column are not reimbursable if performed in such facilities. "The continued exclusion of procedures allowable in an ASC setting which [the New Jersey Association of Ambulatory Surgery Centers] addressed in it’s comments is most disturbing," says Jeffrey Shanton, chair of the advocacy & legislative affairs committee for NJAASC. "We question whether DOBI has the authority to mandate what procedures can and cannot be performed in an ASC."

In its new proposals, the Department of Banking and Insurance notes that CMS allows for higher reimbursement in HOPD than ASC for the same services. It also notes that it is not aware of any available paid fee information for outpatient surgical procedures other than Medicare. Mr. Shanton says the problem is the use of Medicare policies and fee schedules by DOBI. "This is a classic example of trying to fit a square peg in a round hole," he says. "Medicare policies and fee schedules are meant for Medicare patients, not for the general public, let alone accident victims."

Mr. Shanton says the PIP statue provides that the carriers must pay at 75 percent of market value. "To me, that would seem to indicate that it is incumbent upon someone -- be it the MVA carriers and/or DOB -- to collect data and formulate a fee schedule specific to PIP and New Jersey, and not wholesale import and use Medicare regulations," he says.  

The proposed new HOSF indicates that certain outpatient surgical services not eligible for reimbursement in an ASC may be reimbursed if they are performed in HOPD. This is based upon criteria recently issued by CMS deeming the risk of performing those procedures in ASCs to be unacceptably high, but approving their administration in HOPD. "Most of the procedures in question that are excluded from the ASC fee schedule have been safely and routinely performed in ASCs for quite some time," Mr. Shanton says. "Advances in technology have allowed many procedures once considered as inpatient only, to be safely performed in an outpatient setting. CMS tends to be somewhat slow and behind the times in recognizing this."

"CMS collects data on procedures performed upon Medicare patients only as a basis for inclusion on its fee schedule," he says. "Thus if procedures are not performed on this segment of the population, there is no compelling reason for CMS to include them on the ASC approved procedure list, safety issues aside."

"Once again, trying to 'shoe horn' Medicare policies into PIP is the problem," he says. "While indeed some procedures may be risky for Medicare aged patients, that is not the case for the general public." He says he went back over the data for his own center and pulled up all the PIP patients for whom these procedures were performed and found that none of the patients were of Medicare age. 

DOBI also noted in its comments that procedures performed in HOPD are more costly than those performed in non-hospital outpatient surgical facilities. Mr. Shanton emphasizes that using a HOPD over an ASC increases the cost by 43 percent, as surgery centers are paid 56 percent of HOPD by Medicare. "If one of the more basic tenants of the proposed PIP regulations is to reduce cost, it would seem to me that you would encourage use of the least costly option – ASCs," says Mr. Shanton.

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