By: Hristo Zevilkaris, Esq. and Samantha E. Hahn, Esq. 
On August 15, 2019, Governor Phil Murphy signed into law two bills that effectively overturn the New Jersey State Supreme Court’s ruling in Haines v. Taft and now permit a successful claimant to recover all uncompensated medical expenses, even those which exceed the applicable PIP limits. As previously reported in GRSLBG&B’s News Update: New Jersey State Legislature Passes Bills to Overturn Haines v. Taft, the two bills passed the New Jersey State Legislature and were pending the Governor’s approval since May 2019.
By way of background, in Haines, the plaintiff incurred $43,000 in medical bills as a result of a motor vehicle accident after choosing a less expensive automobile insurance policy (“basic policy”) which provided only $15,000 in personal injury protection benefits (“PIP”). Haines could not maintain a lawsuit for personal injuries as he elected the limitation-on-lawsuit options and could not satisfy the threshold. Accordingly, Haines filed a lawsuit seeking to recover only the remaining $28,000 in unpaid medical bills from the negligent driver. The trial court barred Haines from recovering the medical bills as they exceeded his elected PIP coverage.
At issue in Haines was the interpretation of N.J.S.A. 39:6A-12, and whether “the Legislature clearly intended Section 12 to allow fault-based suits consisting solely of economic damages claims for medical expenses in excess of an elected lesser amount of available PIP coverage.”
On appeal, the Plaintiffs argued that N.J.S.A. 39:6A-12, which provides that “[n]othing in this section shall be construed to limit the right of recovery, against the tortfeasor, of uncompensated economic loss sustained by the injured party,” when read with the definition of economic loss in N.J.S.A 39:6A-2(k), permits a cause of action for medical expenses exceeding their elected PIP coverage limits. In response, the Defendants argued that such an interpretation would essentially create a fault-based system by “reliev[ing] insureds of the intended consequences of minimizing coverage in exchange for less money,” and would result in a higher volume of litigation. The parties further disagreed on the meaning of the undefined phrase, “amounts collectible,” which plaintiffs interpreted to mean the policy limit, and defendants contend means the $250,000.00 limit available to every consumer.
On March 26, 2019, in a 3-2 decision, the New Jersey Supreme Court held that a motorist who elects PIP limits of less than $250,000 (“standard policy”), has no right to recover medical expenses exceeding the amount elected. You can read more about the Haines Decision in GRSLBG&B’s Article, “You Get What You Pay For.”
The Supreme Court found that the overall goals of the No-Fault Law were to reduce court congestion and reduce the cost of automobile insurance. To permit “fault-based suits consisting solely of economic damages claims for medical expenses in excess of an elected lesser amount of available PIP coverage,” would lose sight of those goals. The Supreme Court was similarly unpersuaded that the amendment of the definition of “economic damages” to include uncompensated medical expenses, created “a right to bring a new cause of action where before one could not.” The Court stated that such interpretation could theoretically allow a driver who elects a lower PIP coverage amount to receive a higher overall reimbursement than a driver who elects $250,000.00 in coverage.
The Supreme Court’s decision, which welcomed legislative intervention, prompted significant and immediate lobbying efforts by both sides of the bar, as well as the insurance industry, to address its implications. The New Jersey Legislature passed two bills seeking to effectively overturn the Court’s Decision. The first bill, S-2432, affirmatively permits an injured party to recover uncompensated medical expenses in a civil action for damages arising from an automobile accident. The bill effectively defines “economic loss” to include any “uncompensated medical expenses” by a party which exceed the available insurance coverage. This specifically includes any medical expenses incurred by individuals, such as Haines, that exceed the “basic policy” limits of $15,000 in PIP coverage. Now signed by Governor Murphy, this new law takes immediate effect and applies to all causes of action pending as of August 15, 2019
The second bill, S-3963, permits an injured party to recover all unreimbursed medical expenses, not covered by the applicable PIP limits, including those which exceed the “standard policy” PIP limits of $250,000. Most importantly, the bill requires that all medical expenses, even those which exceed the applicable policy limits, be subject to the automobile medical fee schedules. Also signed by Governor Murphy, this new law takes immediate effect, but applies only to accidents occurring on or after August 1, 2019.
These new laws favor automobile plaintiffs. The primary objective of both bills is to ensure that an injured party is adequately compensated for all medical expenses, even those which exceed the applicable PIP limits, regardless of whether the individual elects a “basic policy,” providing $15,000 in coverage, or a “standard policy,” providing $250,000 in coverage. The bills, however, also include cost-containment provisions favorable to the defense and insurance industry by requiring all medical expenses to be subject to the automobile fee schedules. While the bills’ cost- containment provisions address some uncertainty concerning the calculation of any medical expenses that exceed the applicable PIP limits, the bills do not address whose obligation it is to submit evidence of the appropriate fee schedule, which leaves some questions unanswered. Accordingly, it may be prudent to retain medical billing coders and specialists to audit, review, and apply the appropriate fee schedule whenever there is a possibility that the medical expenses could exceed the applicable PIP limits, until the evidentiary question is resolved by the Courts.
As a final note, there is a fee-shifting component to the bills, which permit a successful claimant to recover reasonable and necessary legal fees incurred in recovering a purely economic claim only (such as in the Haines matter) for uncompensated medical expenses. You may now see an increase in these types of lawsuits, which solely seek the reimbursement of medical expenses, given the enticement of the fee shifting provision, where previously, plaintiffs may have avoided pursuing such claims as they would not be conducive to a contingency fee arrangement.
 Hristo Zevilkaris, Esq. is an Associate in GRSLBG&B’s Litigation Department. He defends a wide variety of clients in various civil actions brought forth in New Jersey State and Federal Courts. Chris can be reached at CZevlikaris@grsl.com.
 Samantha E. Hahn, Esq. is an Associate in GRSLBG&B’s Workers’ Compensation Department. She defends employers, insurers, and third party administrators against workers’ compensation claims in New Jersey and Pennsylvania. Sam can be reached at SHahn@grsl.com