Key Takeaway
New Jersey court rules PIP carriers cannot use intercompany arbitration against major medical insurers when seeking reimbursement for incorrectly paid claims.
This article is part of our ongoing no-fault coverage, with 271 published articles analyzing no-fault issues across New York State. Attorney Jason Tenenbaum brings 24+ years of hands-on experience to this analysis, drawing from his work on more than 1,000 appeals, over 100,000 no-fault cases, and recovery of over $100 million for clients throughout Nassau County, Suffolk County, Queens, Brooklyn, Manhattan, and the Bronx. For personalized legal advice about how these principles apply to your specific situation, contact our Long Island office at (516) 750-0595 for a free consultation.
| PALISADES INSURANCE COMPANY VS. HORIZON BLUE CROSS BLUE SHIELD OF NEW JERSEY, A-2830-19 |
One of the interesting aspects or evolution of New Jersey PIP law is that is has devolved from a comprehensive all encompassing benefit to one that is either limited or non-existent. The historians will remember that until the 1990 Fair Automobile Insurance Reform Act, there was not coverage limit. That changed to $250,000 in 1990 along with the ability to have major medical be deemed primary.. In 1998, AICRA brought the common $15,000 PIP policies and mandated arbitration.
The question that lurked is what happened when major medical said go to PIP, PIP as secondary pays and then seeks to subrogate against the major medical carrier.
The Appellate Division said you’re out of luck.
(1) “When a PIP-as-secondary insurer receives a claim eligible for primary coverage, it must deny coverage and send the insured a notice advising them to submit the claim to their health insurer”
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(2) ” Health insurers are also required to make prompt payment of claims, but are governed by N.J.A.C. 11:22-1.1 to -1.16″
(3) “Reimbursements of payments incorrectly made by auto carriers are permitted by inter-company agreement or arbitration amongst PIP insurers, N.J.S.A. 39:6A-11, but this court has determined that health insurers are not subject to PIP arbitration”
(4) “A health insurer’s duty to process a claim, however, does not arise until it has received a request for payment directly from the insured or a healthcare provider. N.J.A.C. 11:22-1.5(a); Bull. No. 05-25. If, after proper submission, a health insurer disputes coverage of a requested medical expense, the insured must pursue the internal appeals
process under the plan.”
(5) “Where both the PIP and health insurer dispute coverage, the health insurer becomes obligated to act as the
primary. N.J.A.C. 11:3-37.11(a)”
(6) This is the most important part of the opinion ” If plaintiff believed that defendant unreasonably denied coverage, it could have requested that P.M. pursue defendant’s internal appeals process, or obtained an assignment of rights from the insured and pursued the appeal itself. Instead, it simply paid the claim. Consequently, plaintiff has failed to establish any right of subrogation
(7) When PIP pays, they forfeit their recovery right.
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Legal Context
Why This Matters for Your Case
New York's no-fault insurance system, established under Insurance Law Article 51, is one of the most complex insurance frameworks in the country. Every motorist must carry Personal Injury Protection coverage that pays medical expenses and lost wages regardless of fault, up to $50,000 per person.
But insurers routinely deny valid claims using peer reviews, EUO scheduling tactics, fee schedule reductions, and coverage defenses. The Law Office of Jason Tenenbaum has handled over 100,000 no-fault cases since 2002 — from initial claim submissions through arbitration before the American Arbitration Association, trials in Civil Court and Supreme Court, and appeals to the Appellate Term and Appellate Division. Jason Tenenbaum is one of the few attorneys in the state who both writes his own appellate briefs and tries his own cases.
His 2,353+ published legal articles on no-fault practice are cited by attorneys throughout New York. Whether you are dealing with a medical necessity denial, an EUO no-show defense, a fee schedule dispute, or a coverage question, this article provides the kind of detailed case-law analysis that helps practitioners and claimants understand exactly where the law stands.
About This Topic
New York No-Fault Insurance Law
New York's no-fault insurance system requires every driver to carry Personal Injury Protection (PIP) coverage that pays medical expenses and lost wages regardless of who caused the accident. But insurers routinely deny, delay, and underpay valid claims — using peer reviews, IME no-shows, and fee schedule defenses to avoid paying providers and injured claimants. Attorney Jason Tenenbaum has litigated thousands of no-fault arbitrations and court cases since 2002.
271 published articles in No-Fault
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Disclaimer: This article is published by the Law Office of Jason Tenenbaum, P.C. for informational and educational purposes only. It does not constitute legal advice, and no attorney-client relationship is formed by reading this content. The legal principles discussed may not apply to your specific situation, and the law may have changed since this article was last updated.
New York law varies by jurisdiction — court decisions in one Appellate Division department may not be followed in another, and local court rules in Nassau County Supreme Court differ from those in Suffolk County Supreme Court, Kings County Civil Court, or Queens County Supreme Court. The Appellate Division, Second Department (which covers Long Island, Brooklyn, Queens, and Staten Island) and the Appellate Term (which hears appeals from lower courts) each have distinct procedural requirements and precedents that affect litigation strategy.
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