Paying for medical bills related to injuries that you sustained in a car accident can be incredibly stressful. Generally, when a negligent third party causes you injuries, you will be able to seek compensation for those medical bills through either a settlement or a judicial award.
Unfortunately, in late 2011 a new law was passed in North Carolina known as Billed Versus Paid or Rule 414. This law was created to limit what evidence could be offered as proof of past medical expenses. Billed Versus Paid limits evidence of medical expenses to the amount actually paid to satisfy the bills, regardless of the source of the payment. Further, the bill requires evidence of the amount necessary to satisfy the outstanding medical bills that have not yet been paid. The most common situation in which this rule applies involves health insurance companies providing contractual discounts for accident victims’ medical treatment.
This information is extremely confusing, so please be sure to read carefully. Should you have a question about Billed vs. Paid, visit our N.C. Accident Forum where you can communicate with North Carolina lawyers about any accident-related questions.
While the difference between billed medical expenses and paid medical expenses may seem insignificant, it is important to understand the drastic ramifications this law may have on your personal injury claim. The creation of this law ensures that the at-fault party benefits from the injured having health insurance coverage. Many have argued that the consequences to this rule are unfair and prejudicial to accident victims. Being limited to assert evidence that shows what has actually been paid or what is payable toward your medical expenses significantly decreases your ability to recover damages in North Carolina, for both medical expenses and pain and suffering.
This rule constitutes a complete change in how medical evidence is presented to support damages for both accident victims and North Carolina personal injury attorneys in settlement negotiations and trials.
Rule 414 affects your ability to recover damages from the insurance company because your own health insurance has made payments for your medical expenses. Why does this matter? The simple answer is that your health insurance company does not pay the same price for medical treatment or procedures as an individual without health insurance would pay.
Health insurance companies enter into sophisticated negotiations with medical provider networks to ensure that your medical treatment is performed at a contractually reduced price. Essentially, hospitals and medical providers want patients, and health insurance companies want cheap medical care. As a result, hospitals and medical providers will offer health insurance companies discounts to ensure that the health insurance companies send customers to their facilities for treatment.
As such, health insurance companies rarely pay full price for what medical providers charge for their treatments. Most health insurance providers have pre-negotiated lower rates for these services.
To better illustrate this issue, let’s look at a hypothetical situation:
Let’s say Steve was injured in an accident and has to go to the hospital. Steve’s hospital bills and treatment add up to $50,000. Steve presents his insurance card to the hospital, and the hospital bills the medical treatment to Steve’s health insurance. Steve’s health insurance only has to pay $20,000 for his treatment, instead of the full $50,000. Steve incurred $50,000 in medical expenses but is limited to presenting only the amount that was necessary to satisfy the medical expense of $20,000 to the at-fault party’s insurance company for his medical expenses related to his injuries. Thus, Steve was billed $50,000 but only paid $20,000, illustrating Billed Versus Paid.
As this hypothetical situation indicates, Rule 414 significantly impacts accident victims in North Carolina. Billed Versus Paid limits what you as an accident victim may present as evidence in your personal injury claim.