The New Jersey Supreme Court had to decide who must pay the medical bills for a person who was injured in a car crash in 1977. At the time of the accident, the motorist had an insurance policy that provided him with unlimited personal-injury-protection (PIP) benefits. But the crash left him paralyzed from the waist down. Years later, the motorist discontinued his insurance policy and went on Medicare. In 2016 — while he was on Medicare — the motorist sought additional treatment for complications from his accident-related injuries. His insurance company of yore informed him that Medicare is the appropriate primary payer for treatment related to the crash. The Supreme Court reasoned that, as of 1977, New Jersey’s No Fault Act placed the primary responsibility for payment of medical expenses from automobile insurance carriers to certain collateral sources, such as Medicare. And Under the No Fault Act’s collateral source rule, Medicare had primary responsibility and the PIP carrier secondary responsibility for paying medical bills arising from automobile accidents. In 1977, for those enrolled in Medicare, federal law authorized Medicare to pay for an enrollee’s medical expenses, including expenses arising from automobile accidents. As a result, the Court held that Medicare was obliged to pay for the motorist’s 2016 hospital stay. That was a notable blow to the billing hospital — the plaintiff in this case; the bill was more than $800,000, but Medicare’s fee schedule limited payment to closer to $80,000.
