TRENTON, NJ. , January 7 – The first steps in enacting a new auto insurance medical fee schedule have been taken, but the battle is far from over as insurance companies say the fees proposed are too much, while doctors who receive the payments say they are not enough.

The fee schedule covering 1,000 medical procedures for injuries suffered in private passenger automobile accidents is aimed at cutting car insurance costs, as the state continues to have the highest car insurance rates in the nation at an average of $1,221.

The car insurers say that those high premiums are the result of soaring medical costs.

The department is now reviewing the comments. If there are changes because of the comments, they will be published, according to Jim Gardner, Insurance Department spokesman. He said there is no set date for adoption yet.

The doctors, represented by the New Jersey Medical Society, have threatened to sue because they contend the proposed schedule would cut by more than half their payments under Medicare, and would lower their payments, not on billed amounts, but rather on the usual customary and reasonable fee by region.

Michael Kornett, chief executive officer of the New Jersey Medical Society, said the proposed medical fee schedule is probably the most devastating blow to doctor-patient relations that New Jersey has ever imposed. He called it a war against physicians in the state of New Jersey.

The medical society also warned that the proposed fee schedule, with its drastic cuts in reimbursement, will lower the number of physicians willing to take calls, or will force already trained hospitals to pay extra.

Opposing View

The industry position is mirrored in the complaints of the Property Casualty Insurers Association of America (PCI). The group contends the new schedule would set fees that would be over 400 percent of the Medicare rate of 130 percent. In some cases, the association said, there are reimbursement rates of 500, and even 1,000 percent above 130 percent.

One study showed that the cost of average accident-related medical claims was $10,776, nearly twice the national average.

The insurance industry contends that these higher-than-average medical costs are the reason New Jersey motorists pay the highest car insurance premiums in the nation.

Legislation has been introduced to block the regulations. It calls for further review.

Richard M. Stokes, regional manager and counsel for PCI wrote to the department, stating, The high cost of treating a no-fault patient has been allowed simply because the medical profession has been permitted to charge these patients higher fees with little control or oversight.

Stokes wrote, We do not believe it is appropriate for health care costs in general be balanced on the backs of the auto insurance policyholders.

He also questioned why the department is proposing codes for treatments unrelated to an auto accident, such as herpes testing, HIV testing, and surgical procedures for removal of skin tags and malignant and benign skin lesions.

Stokes indicated that, in nearly all cases, the proposed fees are significantly higher than those adopted by other states, including Pennsylvania and New York.

He said that the study by the insurers association found that the average PIP charges for certain medical professionals in New Jersey exceeded charges in Florida, New York, Oregon, and Pennsylvania, and, in all cases, exceeded countrywide average PIP charges.

For example, he noted, an average PIP charge to a New Jersey general practitioner was $1,465, while in New York it was $860, and $411 in Pennsylvania. Nationwide, the general practitioners received an average PIP charge of $817.