Author: Tyler Nabors, Personal Injury Attorney
Crumley Roberts, LLP
North Carolina Rule of Evidence 414 and How Injured People are Subsidizing the Auto Insurance Industry
“Why do I have to use my health insurance if it’s the other person’s fault?” This is a question I receive all too often. When people are injured due to the fault of another person and attempt to seek a fair settlement from an auto insurance carrier, it’s often one sucker punch after another. Not only are they short-changed on their property damage settlement, and not only do they have to wait until they complete their medical treatment before they are compensated for their medical expenses, pain and suffering, and missed time for work, but since October 1, 2011, they are forced to use their own health insurance to cover the medical bills that the responsible party caused them to incur. While this is as unfair as it sounds, it was embodied by a law recently passed by the North Carolina General Assembly that, in effect, requires the injured person to use health insurance available to them to reduce the expense the responsible party is obligated to pay.
On October 1, 2011, the North Carolina General Assembly passed the following law that created the new North Carolina Rule of Evidence 414 that 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. This rule does not impose upon any party an affirmative duty to seek a reduction in billed charges to which the party is not contractually entitled.
In terms of law and rules of evidence, this Rule is rather new and has yet to be interpreted by the North Carolina courts. Unfortunately, the lack of interpretation and examination of the courts has created a “free for all” as to what medical expenses are considered by an auto insurance carrier. The harshness of this uncertainty is felt most by injured people not represented by an attorney. Meanwhile, the auto insurance industry has attempted to pervert this rule in order to pay those who are injured much less than they deserve.
For example, some insurance carriers will require the injured party to direct their medical providers to bill their private health insurance (as well as Medicare, Medicaid, Tricare, and the State Employee’s Health Plan) before the auto insurance carrier will make any offer of settlement. Other carriers will take an arbitrary 30% reduction from all medical bills where the medical providers did not submit the claim to health insurance, regardless of the actual amount owed on the bill. Still other insurance carriers will not consider any treatment where the health insurance was not used. This results in an unfair burden on the injured party to essentially act as health insurance claims agent for the automobile insurance carrier, and in reality, results in an unfair settlement for the injured party.
However, there is a silver-lining to this predicament. While the automobile insurance carriers have attempted to use the lack of legal clarity for this new law to their advantage, an experienced, skilled, and creative attorney can also leverage that same lack of clarity in order to level the playing field. Although the insurance companies often demand it, until a law suit is filed, there is no legal obligation to turn over health insurance information. Portions of medical bills can be redacted to show only the information that the automobile insurance carrier has a right to examine. An experienced attorney can inform you what the law requires you to disclose, as compared to what the carriers want to see. As we all know, “you can’t always get what you want”, and there are protections under the law to prohibit what the carriers can request and obtain. An experienced attorney can help you understand your rights, and strategically navigate around common pitfalls to which many people fall victim.
The law is constantly changing, sometimes in favor of injured parties, sometimes to their detriment. If you’ve been injured, and can’t afford to be taken advantage of, it’s best to trust the advice of an experienced attorney in personal injury law who can protect you, and who can reach the best possible resolution for your case.
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