“Tort Reform” in Action
Although “tort reform” is a popular political talking point for many public officials — especially during an election year such as this one — few people really understand what proposed tort reform measures mean for actual personal injury victims when put into practice. One particular law that passed several years ago in North Carolina continues to exemplify how so-called “tort reform” measures can deny justice to injury victims.
In June 2011, the North Carolina General Assembly approved House Bill 542, titled “Tort Reform for Citizens and Businesses.” Section 1.1 of this bill created a new rule for personal injury cases, which states:
“Evidence offered to prove past medical expenses shall be limited to evidence of the
amounts actually paid to satisfy the bills that have been satisfied, regardless of the source of payment, and evidence of the amounts actually necessary to satisfy the bills that have been incurred but not yet satisfied.” (Rule 414. “Evidence of medical expenses.”)
In plain English, this rule means that during the course of a personal injury lawsuit, injury victims can only submit to a jury the amount necessary to pay off a bill — which is the amount private health insurance or Medicare/Medicaid paid plus any co-pays or deductibles — as evidence of medical bills, rather than being able to submit the entire amount that was billed for medical services related to an injury.
This difference is important because health insurance carriers often have contracts with health care providers that allow them to pay a discounted amount to satisfy medical bills. An insurance carrier might only pay $5,000 to satisfy a $10,000 hospital bill, for example.
H.B. 542, which North Carolina attorneys tend to refer to simply as “billed versus paid,” went into effect for all accidents or other personal injury incidents occurring on or after October 1, 2011.
This rule may at first seem like a common-sense measure to people who don’t work in the field of personal injury law: Why should a person be able to claim more in damages than they have actually paid? If the hospital or other medical provider reduced part of the bill because of a contract with the health insurance company, why should an injury victim receive damages based on that portion?
The important distinction, though, is that “billed vs. paid” does not just prevent a victim from receiving compensation for the full amount billed — it treats people who have health insurance and work hard to pay for it differently from those who do not.
How Dollar Amounts Influence Jury Verdicts
To see why “billed versus paid” might matter in a personal injury case, imagine that a person is hurt in a car wreck and has to go to the hospital. The hospital bills for $10,000 in medical services, but the person has health insurance through her job. The hospital has a contract with the health insurance company and reduces the bill to $5,000; the person pays $1,000 of this amount to satisfy their deductible and the health insurance carrier pays the rest.
If this person goes to court, she can only submit $5,000 in medical bills into evidence because of the “billed versus paid” rule.
Now imagine a second person is in the same wreck with the same injuries, and assume he goes to the same hospital for treatment; however, this person does not have insurance. This person gets to submit the entire $10,000 into evidence if he goes to court.
The first person in this example receives no consideration for the hundreds of dollars per month in health insurance premiums that she has paid for many years in order to be a responsible citizen. Not only that, but many private health insurance plans and both Medicare and Medicaid require that an injury victim notify them of any recovery and reimburse them for all payments made as a result of the injury in question.
As you can see, the insured person is at a disadvantage compared to the uninsured person on two counts: Their medical bills appear less to the jury because of “billed versus paid” — despite their injuries and treatment being the same — and they most likely have to pay back a portion of any recovery until their insurer or Medicare/Medicaid are reimbursed in full.
In our experience at Myers Law Firm, “billed versus paid” has worked over the past five years to push down the value of personal injury claims, presumably because some jurors tie their sense of fair and reasonable damages to the dollar amounts they see submitted into evidence.
This effect makes it even more important to work with an experienced personal injury attorney if you’ve been hurt in North Carolina. The “billed versus paid” law has created an uphill battle for injury victims, whose compensation often depends on making sure jurors understand the extent to which an accident has affected their health, well-being, income, and lifestyle — regardless of the amount they’ve paid toward medical bills.
Contact Myers Law Firm if You’ve Been Injured
At Myers Law Firm, we work to demand justice and fair compensation for the victims of senseless injuries. If you or a loved one has been injured due to someone else’s negligence, we can help. If you choose us to represent you, we will act as your advocate and use our legal experience to fight relentlessly on your behalf until your case reaches a resolution.
Call our offices today at 888-376-2889 or fill out the contact form on our website to schedule your free consultation with us. We will use this time to get to know you, learn about your case, and inform you about your legal options so you can go forward with confidence.
An act to provide tort reform for North Carolina citizens and businesses, Article 4, Chapter 8C, N.C. General Statutes. Rule 414. (2011). Retrieved from http://www.ncleg.net/Sessions/2011/Bills/House/PDF/H542v6.pdf