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Legislature Gives Green Light to Boarding Excess PIP Medical Expenses as "Economic Losses" (NJ)

August 29, 2019

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<p style="text-align: justify;">Back in March, the New Jersey Supreme Court issued a landmark decision in <a href="https://www.wcmlaw.com/wp-content/uploads/2019/08/Haines-v.-Taft.pdf"><em>Haines v. Taft,</em></a> that substantially impacted boardable medical expenses in motor vehicle accident cases. As <a href="mailto:BGibbons@wcmlaw.com">Brian Gibbons</a> and Steve Kim <a href="https://www.wcmlaw.com/2019/04/game-changing-nj-supreme-decision-impacts-boardable-medical-expenses-in-nj-pip-cases/">first reported back in April</a>, the Court’s decision essentially barred plaintiffs from admitting evidence of medical expenses that exceeded PIP policy limits. In reaching its conclusion, the Court analyzed the intent of the No-Fault scheme and evaluated the legislative history underpinning its formation – and invited lawmakers to intervene if they disagreed.</p>
<p style="text-align: justify;">The New Jersey Legislature responded, at breakneck speed, and recently passed two laws that supersede the <u>Haines</u> decision. The first piece of legislation, <a href="https://www.wcmlaw.com/wp-content/uploads/2019/08/2432_R1.pdf">S-2432</a>, allows injured victims of motor vehicle accidents to seek payment for medical expenses due to another’s negligence <em>specifically</em> when they exceed PIP coverage limits. The second piece of legislation, <a href="https://www.wcmlaw.com/wp-content/uploads/2019/08/3963_I1.pdf">S-3963</a>, confirms that injured victims may only recover unreimbursed medical expenses and clarifies that any excess expense must be limited to costs prescribed by the statutory PIP medical fee schedule.</p>
<p style="text-align: justify;">The result is a boon for the plaintiff’s bar, which has increasingly used snowballing medical expenses to raise arbitration awards and shock juries into increasing verdict amounts across the state. With the passing of S-2432 and S-3963, plaintiffs will now be firmly permitted to board any and all medical expenses in excess of PIP policy limits as “economic loss” damages – subject only to the cost limits prescribed by the existing statutory PIP medical fee schedule.</p>
<p style="text-align: justify;">Oddly enough, the <u>Haines</u> Court disapproved of the very outcome the legislature adopted, warning that treating excess medical expenses as boardable economic losses (while not permitting the recovery of PIP medical expenses themselves) may result in instances where lower PIP coverage limits ($15,000) with high boardable “economic loss” medical expenses yield higher reimbursements than standard PIP policies ($250,000) with no boardable medicals.</p>
<p style="text-align: justify;">Thanks to Brent Bouma for his contribution to this post. Please email <a href="mailto:VPinto@wcmlaw.com">Vito A. Pinto</a> with any questions.</p>

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