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What Is the Billed Versus Paid Law in North Carolina?

The North Carolina legislature passed a law (House Bill 542 Tort Reform for North Carolina Citizens and Businesses) nicknamed the "billed vs. paid" law, which went into effect in October 2011. Prior to this law, when injury victims received a bill for medical expenses and their health insurance covered part of the costs, they were not required to disclose how much of the bill their health insurance covered as a plaintiff in a personal injury case.

Under the new law, injury victims must disclose health insurance benefits received, and defendants do not have to pay what the health insurance company covered.

This new law clearly favors insurance companies and ultimately works to reduce the amount of settlements or jury awards an injury victim can recover when they bill their health insurance company for medical treatment. In effect, injury victims pay for medical damages through their healthcare premiums instead of holding the at-fault party accountable for damages through that party’s liability insurance.

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