On Monday, April 15, 2024, the United States Court of Appeals for the Third Circuit issued a groundbreaking precedential decision in favor of several of our medical provider clients. The appeal was managed by our healthcare litigation team, comprised of Andrew Gimigliano, Brian Block, and Mohamed Nabulsi. Specifically, the Third Circuit found that New Jersey Insurance Fraud Prevention Act (NJ IFPA) claims are arbitrable and need not be litigated in court.
This decision upends an area of insurance law regarding Personal Injury Protection (“PIP”) benefits, which had been backed by litany of federal district court decisions that held NJ IFPA claims could not be arbitrated. For years, certain PIP carriers would pay a provider for their services, as required by law and pursuant to the carrier’s pre-authorization procedures or an arbitration award pursuant to the state-mandated arbitration system, only to later sue the provider in court seeking to recover those same pre-authorized/arbitrated claims. They would allege that the provider violated the NJ IFPA and Racketeer Influenced Corrupt Organization Act by misleading the carrier into paying such claims. Essentially, earlier decisions enabled carriers to sidestep the legally and contractually mandated arbitration system to take another bite at the apple by wholesale disallowing previously adjudicated claims and seeking treble damages and attorneys’ fees from the provider in court litigation. The Third Circuit’s decision, however, makes clear that the correct forum for provider-related PIP disputes is arbitration and not in federal district courts.
Our team’s approach to this case was novel and challenged the status quo. With this approach, we were able to persuade the Third Circuit to substantially clarify the law governing PIP disputes in the State of New Jersey to the benefit of healthcare providers.
If you have any questions, please contact Mohamed Nabulsi, Healthcare Chair, at mnabulsi@mblawfirm.com.
These stories are successful case results from our attorneys. Please note that results may vary depending on your particular facts and legal circumstances.