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In re Commissioner's Failure to Adopt 861 CPT Codes3/7/2003
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued: January 15, 2003
In this case, American Insurance Association (AIA), a national insurance trade association of property and casualty insurance companies licensed to do business in every state, appeals from the adoption of a physicians' fee schedule by the Commissioner of Banking and Insurance (Commissioner), N.J.A.C. 11:3-29 Appendix (Exhibit 1), and from the failure to adopt a hospital fee schedule. AIA appeals on behalf of its member insurers writing private passenger automobile insurance in New Jersey. AIA contends that by adopting a fee schedule for benefits payable under personal injury protection (PIP) laws which included only 92 Current Procedural Terminology (CPT) codes, after having proposed 953 codes, the Commissioner violated the Administrative Procedures Act (APA), N.J.S.A. 52:14B-1 to -25. AIA contends that the rule adoption should be invalidated because it departed substantially from the rule proposal. AIA also contends that the Commissioner failed to promulgate 861 additional CPT codes and to promulgate a hospital fee schedule, as required by N.J.S.A. 39:6A-4.6. We reverse the adoption of the Appendix, Exhibit 1, because of deficient notice and substantial deviation from the rule proposal. We remand to the agency for reproposal.
I.
On December 18, 2000, pursuant to N.J.S.A. 39:6A-4.6(a), the Department of Banking and Insurance (Department) published proposed new rule N.J.A.C. 11:3-29 Appendix, Exhibits 1 through 5; proposed repeal of N.J.A.C. 11:3-29.6; and proposed amendments N.J.A.C. 11:3-29.1, -29.2, -29.3, -29.4 and -29.5. 32 N.J.R. 4332 (a) (December 18, 2000). The proposal set forth medical fee schedules for automobile insurance PIP and motor bus medical expense insurance coverage, including a physicians' fee schedule (Exhibit 1), a home care services fee schedule (Exhibit 3), an ambulance services fee schedule (Exhibit 4), and a schedule for durable medical equipment and prosthetic devices (Exhibit 5). 32 N.J.R. at 4333, 4337-77. Exhibit 2, a dental fee schedule, was reserved. There was no proposed hospital fee schedule. Id. at 4357.
N.J.S.A. 39:6A-4.6 provides:
a. The Commissioner of Banking and Insurance shall, within 90 days after the effective date of P.L.1990, c. 8 (C.17:33B-1 et al.), promulgate medical fee schedules on a regional basis for the reimbursement of health care providers providing services or equipment for medical expense benefits for which payment is to be made by an automobile insurer under personal injury protection coverage pursuant to P.L.1972, c. 70 (C.39:6A-1 et seq.), or by an insurer under medical expense benefits coverage pursuant to section 2 of P.L.1991, c. 154 (C.17:28- 1.6). These fee schedules shall be promulgated on the basis of the type of service provided, and shall incorporate the reasonable and prevailing fees of 75% of the practitioners within the region. If, in the case of a specialist provider, there are fewer than 50 specialists within a region, the fee schedule shall incorporate the reasonable and prevailing fees of the specialist providers on a Statewide basis. The commissioner may contract with a proprietary purveyor of fee schedules for the maintenance of the fee schedule, which shall be adjusted biennially for inflation and for the addition of new medical procedures. b. The fee schedule may provide for reimbursement for appropriate services on the basis of a diagnostic-related (DRG) payment by diagnostic code where appropriate, and may establish the use of a single fee, rather than an unbundled fee, for a group of services if those services are commonly provided together. In the case of multiple p
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