Reimbursing Medical Expenses: Billed vs Paid

In personal injury cases, sometimes hospitals and healthcare providers accept payments for medical bills for less than they charged. Perhaps the victim’s private insurance or Medicare provides for lower than market rates for services, so the victim gets a discount. However, in most jurisdictions, the victim can still claim the full amount of the bill as an economic loss and recover the fair market value of the service rather than the actual cost to the victim. But now, under recent tort reform legislation, certain states, including North Carolina, have decided that victims can only sue negligent defendants for the amounts they actually paid for medical services. So, in essence, the benefit of the victim’s discount gets passed on to the person who caused the harm.

In North Carolina, Rule 414 of the Code of Civil Procedure (new in 2011) 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 raises a question of fairness regarding the victim’s recovery. What is the better gauge of the victim’s loss: the fair market value of reasonable medical services or the highly discounted rates? The rates that are discounted because of private insurance are only low because the victim has purchased, either through labor or cash, private insurance. That discount is the victim’s earned asset, which is now forfeited to the defendant. That forfeit is even more serious when there are limits on a victim’s private insurance coverage.

Likewise, victims on Medicaid or Medicare are billed significantly below the market rate because the law limits how much a healthcare provider can charge them. Restricting a victim’s recovery amounts to a penalty for being elderly or poor.

The situation gets even worse, because juries often use medical expenses as a factor in determining how much to award for intangible losses like pain and suffering. A victim whose recovery for economic losses has been reduced already under 414 may see a further reduction in noneconomic damages.

If you are in North Carolina and are subject to Rule 414, it is even more important to have an experienced personal injury attorney who can manage your case and maximize your recovery. Call Marcari, Russotto, Spencer & Balaban at (888) 351-1038 or contact our office online to schedule a free consultation.

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