North Carolina Personal Injury Tort Reform Law

North Carolina House Bill 542 passed in July 2011, now drastically changes the evidentiary rules as to personal injury trials. However, insurance companies are also attempting to use this law in a manner to reduce settlements before even going to trial. How so? This law requires the injured party to submit medical bills to your insurance provider(s) to obtain the “insurance” contract rate (as between the medical provider and your insurance company) instead of the “uninsured” contract rate that arises between the medical provider and an uninsured injured person.

What does that mean? Medical providers, including hospitals, ambulance services, doctors, all negotiate contracts with different insurance companies for the amount of coverage for a particular service. For example, a hospital and insurance company may negotiate a rate for a Cat Scan for $1,800 whereas that same hospital will charge an uninsured patient $2,400 for the very same Cat Scan.

Prior to the law, the innocent party’s insurance company was rarely involved with injuries arising out of a motor vehicle accident. Medical providers oftentimes refuse to bill the innocent person’s insurance when there has been a motor vehicle accident in the hopes to collect on the higher rate for the services provided. Additionally, many times, you won’t want to use your own insurance as there is the expectation that the monthly premiums will increase as a result.

Now, this tort reform law creates an avenue whereby the at-fault party’s insurance company gets the benefit of the innocent party having purchased insurance and diligently paid their monthly premiums. At-fault insurance companies are attempting to reduce their liability by forcing the innocent party to submit the medical bills to their insurance first, in order to obtain the lower rate, and therefore agree to a settlement with the lower medical bills they could not fully cover all medical bills.

The result? The innocent party may end up with portions of unpaid medical bills that still needs to be paid and are then sued by the hospitals for the unpaid balance. This new law makes it even more imperative that you are represented by attorneys that understand the changing laws and how it can affect your case. Just because you’re the innocent party does not mean the law will protect you.