NJM News

January 8, 2008

Contact: Patrick W. Breslin, 609-883-1300, ext. 7070

NJM Thanks Policyholders; Praises Legislative Leaders For Not Rushing PIP Fee Schedule Issue

WEST TRENTON, N.J. — New Jersey Assembly and State Senate leaders demonstrated laudable restraint by not holding a vote on A-3703/S-2402 in the rush to finish the Legislative session that ended today. This bill would have eliminated reasonable controls on medical cost increases for the treatment of auto accident injuries.

Medical services are covered under the Personal Injury Protection (PIP) portion of personal auto policies. Anthony G. Dickson, NJM's President and CEO, thanks the many NJM policyholders who contacted legislators on the Company's behalf, urging leadership not to move forward on this measure.

As the new Legislature is seated, NJM will continue to monitor this issue closely. The Company operates strictly for the benefit of policyholders. NJM will always look critically at any law or regulatory action that threatens to increase policyholders' costs with no corresponding benefit.

The New Jersey Department of Banking and Insurance's PIP Medical Fee Schedule adds a measure of predictability to the amount auto insurers will pay for approximately 1,500 procedures. These reimbursement levels should be considered more than adequate by medical practitioners – approximately 100% higher than the fees paid for the same services by Medicare. By contrast, private medical plans on average pay about 20% to 25% higher than Medicare.

Of particular concern are severely inflated "facility fees" charged for surgeries performed in a non-hospital setting. These surgery center charges are typically five, eight or even 10 times the levels authorized by Medicare. The fee schedule caps these at 300% of the Medicare reimbursement level.