Synopsis of Proposal to Amend N.J.A.C. 11:3-29.4;

SYNOPSIS OF PROPOSAL TO AMEND N.J.A.C. 11:3-29.4;

TO REPEAL N.J.A.C. 11:3-29, APPENDIX, EXHIBITS 1-5, AND 7; AND

PROPOSE NEW RULES N.J.A.C. 11:3-29, APPENDIX, EXHIBITS 1, 1A, 2-5, AND 7

PERSONAL INJURY PROTECTION BENEFITS DISPUTE RESOLUTION AND MEDICAL FEE SCHEDULE: AUTOMOBILE INSURANCE PERSONAL INJURY PROTECTION AND MOTOR BUS MEDICAL INSURANCE COVERAGE

N.J.S.A. 39:6A-4.6(a) provides for a biennial inflation adjustment to the fee schedules and for the addition of new medical procedures. The Department proposes to perform the statutorily required inflation adjustment and to make other amendments to the rules.

On February 6, 2017, the Department of Banking and Insurance (“Department’) notified interested parties about its intention to propose amendments to regulations that govern Personal Injury Protection (“PIP”) Benefits Dispute Resolution and Medical Fee Schedules pursuant to Governor Christie’s Executive Order 2. The Department received a number of comments stating that it was not possible to provide feedback on the changes to the fee schedules in Appendix, Exhibits 1-5 and 7 unless the proposed new fees were available for review. The Department has decided to provide for comment the fee schedules that it intends to propose as part of an additional Executive Order 2 notification as well as notice of additional changes to N.J.A.C. 11:3-29 not included in the February 6 notification. The Department is therefore requesting your feedback on its intention to amend 11:3-29.2, additional subparagraphs of 11:3-29.4; to repeal N.J.A.C. 11:3-29, Appendix, Exhibits 1-5 and 7; and to propose new rules N.J.A.C. 11:3-29, Appendix, Exhibits 1, 1A, 2-5, and 7. The fee schedules can be accessed on the Department’s website at:

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N.J.A.C. 11:3-29

The Department proposes to amend N.J.A.C. 11:3-29.2 to change the edition of the Current Procedural Terminology (“CPT”) manual to 2017.
The Department proposes to amend N.J.A.C. 11:3-29.4(f)1 through 5 to reference the codes in the Physicians’ Fee Schedule, Appendix, Exhibit 1 for procedures subject to rules for multiple procedure reductions, bilateral procedures, assistant surgeons and co-surgeons.
The Department proposes to amend N.J.A.C. 11:3-29.4(f)8 to clarify that this provision does not apply to circumstances where the price of the device is included in the facility fee schedule amount for Ambulatory Surgery Centers (ASCs) and Hospital Outpatient services.

The Department is proposing to amend N.J.A.C. 11:3-29.4(f)11 to delete a reference to an Appendix in the CPT Manual that has been deleted and reference the current guidelines in the CPT Manual for the administration of conscious sedation for surgical procedures. N.J.A.C. 11:3-29.4(f)12 is proposed for deletion as its provisions are now covered in 29.4(f)11 above.

The Department is proposing a new N.J.A.C. 11:3-29.4(g)14 to provide that CPT codes 22526 and 22527 and HCPCS Category II codes 0062T and 0063T are not reimbursable under PIP. CMS conducted a national coverage determination that concluded that the evidence does not demonstrate that Thermal Intradiscal Procedures improve health outcomes and therefore the procedures represented by these codes are not reasonable and necessary for the treatment of low back pain and are not reimburseable under Medicare. Pursuant to N.J.A.C. 11:3-29.4(g), the Department follows Medicare in these determinations.

The Department is proposing to amend N.J.A.C. 11:3-29.4(h) to delete a reference to outdated CPT codes for nerve conduction tests and replace them with the current codes for these procedures.
The Department is proposing to amend N.J.A.C. 11:3-29.4(m) to apply the inflation adjustment to the fee for services commonly provided together, increasing it from $105 to $110.

The Department is proposing to amend N.J.A.C. 11:3-29.5(a)4 to reference the relevant Payment Status Indicators for procedures performed in ASCs and HOSFs.

The Department is proposing to amend N.J.A.C. 11:3-29.5(b) to clarify that pursuant to Medicare, Hospital Outpatient Surgical Facilities should be paid the HOSF fee for a service even if the included services appear separately on the bill with the surgical procedure.

N.J.A.C. 11:3-29 Appendix

The Department proposes to repeal N.J.A.C. 11:3-29, Appendix, Exhibits 1-5 and 7 and replace them with new fee schedules that reflect an upward adjustment for inflation over the fee schedule reimbursement amounts established in accordance with N.J.S.A. 39:6A-4.6(a) except where the scope of services or the relative value calculation by Medicare has significantly changed as explained more fully below. The current fee schedules were proposed on August 1, 2011, and adopted effective January 4, 2013.

The adjustment for inflation is based on the U.S. Bureau of Labor Statistics, Consumer Price Index (“CPI”) in the two Metropolitan Statistical Areas that comprise New Jersey. Between the second half of 2011 and the first half of 2016, costs increased an average 4.4 percent between the Philadelphia-Wilmington-Atlantic City area, corresponding to the fee schedule for Region 1 and the New York-Northern New Jersey-Long Island area, corresponding to the fee schedule for Regions 2 and 3. The numbers, rounded to the nearest dollar, reflect the CPI annual inflation averages for the periods indicated. Specific data regarding the Consumer Price Index can be found at www.bls.gov/cpi/home.htm.

Appendix, Exhibit 1
The Department is proposing to separate the Physician’s Fee Schedule and the ASC fee schedule into two Exhibits – Exhibit 1 and Exhibit 1A. A combined Exhibit could be confusing because the Department is adding columns for the Medicare status codes to the Physicians’ Fee Schedule and a Payment Indicator Column to the ASC fee schedule. The Department believes that placing the two fee schedules in separate exhibits will make them easier to use.

The Department has updated the version of the Current Procedural Terminology (CPT) codes used in the schedule to the 2017 edition as well as reflecting changes made by the Centers for Medicare and Medicaid Services (CMS) to the Medicare Physician Fee Schedule. Columns for the Medicare status codes for Multiple Procedure Reduction, Bilateral Procedures, Assistant Surgeon and Co-surgeon have been added next to the Modifier column. Pursuant to N.J.A.C. 11:3-29.4(g), the Department follows Medicare in these determinations.

The majority of codes on the Physicians’ Fee schedule have received the cost of living adjustment as calculated above. Certain fees and/or CPT code families were adjusted either in excess of the cost of living percentage or reduced overall from the current fee amounts because changes in CMS’ Resource Based Relative Value System (RBRVS), which has been consistently followed by the Department for development of the fee schedules, would have resulted in fees that would be outliers in ways, such as: the fee would be lower than 2017 Medicare reimbursement; the fee would be significantly higher than fees in similar CPT families under 2017 Medicare due to changes in RBRVS; or the fee would be an outlier in its CPT code family.

Appendix, Exhibits 1A and 7

The Department has updated the version of the Current Procedural Terminology (CPT) codes used in the schedule to the 2017 edition, as well as reflecting CMS’ additions to the procedures that can be performed in ASCs. Payment by CMS for services provided in ASCs and Hospital Outpatient Surgical Facilities (HOSFs) is based on the Ambulatory Payment Classification (APC), which groups CPT codes by similar characteristics and costs with the same fee.

In 2016 pursuant to statute, CMS implemented a major restructuring of its APC groups. The 765 APCs were reduced to 663 resulting in more than 200 APCs being given a new APC number. Pursuant to N.J.A.C. 11:3-29.4(g), the Department follows Medicare in these determinations. For example, in the existing ASC and HOSF fee schedules, which used the 2011 Medicare APC groups, CPT codes 31645 and 31646 were in the same APC group and had the same fee. After the 2016 changes by CMS, the two CPT codes are in different APC groups with different fees. Where these types of changes have occurred, it is not possible to apply the cost-of-living adjustment to the existing fee schedule because it would fail to capture the changes CMS has made to the work and cost value of these codes. As a result, where a number of codes with different APCs on the current fee schedule have been combined into one APC, the Department has set the fees for those codes using the same methodology it has used to calculate the fees in the existing fee schedule. In addition, many codes that had fees in the existing schedule have been reclassified by CMS as packaged codes with no separate reimbursement, and the new schedules will also reflect this change.

Appendix, Exhibits 2 through 5

The Department has updated the version of the Current Procedural Terminology (CPT) codes used in the schedule to the 2017 edition and applied the cost of living increase to these codes. The Department has set the fees for new codes using the same methodology it has used to calculate the fees in the existing fee schedule.

Please provide any feedback you wish the Department to consider on its intention to amend and N.J.A.C. 11:3-29.4; to repeal N.J.A.C. 11:3-29, Appendix, Exhibits 1-5 and 7; and to propose new rules N.J.A.C. 11:3-29, Appendix, Exhibits 1, 1A, 2-5, and 7 as noted above by e-mail to DeWayne H. Tolbert, Regulatory Officer, Office of Regulatory Affairs at by November 6, 2017.

Thank you for your participation in this important component of the rulemaking process.

EO2 Synopsis PIP Benefits Medical Protocols-Medical Fee Schedules v3/Regulations

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