
I have encountered a lot of legal misinterpretation from adjusters lately, particularly Progressive adjusters, so I thought it worth documenting.
There is an idea being propounded that the NC Rule of Evidence 414 allows liability adjusters to make up their own adjustments and unilaterally “adjust” (which is a euphemism for “illegally refuse to pay”) bills where health insurance is not used. This is not allowed by law.
First, let’s start with the text of the Rule itself:
Rule 414. Evidence of medical expenses. 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. (2011‑283, s. 1.1; 2011‑317, s. 1.1.)
As you can see from the plain text of the rule, what we can put into evidence is “the amounts actually necessary to satisfy the bills…” In practice, that simply means the liability carrier gets a credit of health insurance adjustments that actually occurred. Period. What it does NOT say is that if health insurance adjustments don’t occur that the liability carrier gets to make up adjustments. They are not the arbiter of what is “reasonable and necessary” to pay the bills. The rule clearly states that we put into evidence the amount “actually necessary,” not an amount you’d like to be necessary, to satisfy the bills.
Moreover, there is no affirmative duty on our part to seek a reduction literally written into the rule. This means that neither the plaintiff’s attorney, the plaintiff, and certainly not the liability carrier have any duty (or right) to contact any providers and say, “We know the billed amount is X, but can’t you take a little more?” That. Doesn’t. Exist. The bills are what the bills are and the liability carrier owes them ALL if they owe any of them.
This brings up a related argument that liability adjusters like to make, which is that plaintiffs have a duty to file their health insurance.
They don’t.
This alleged duty does not exist. If you believe it does, please point to me the statute that creates it. As of this writing, it doesn’t exist. In fact, there are some real practical reasons why there should never be such a duty, not to mention the actual case law that exposes the myth of this duty.
The problem, particularly with ongoing care such as PT or chiropractic, is the ongoing, per-visit cost, as well as potential deductibles, that the patient will be responsible for. Remember, the plaintiff didn’t ask for this accident, so why should they have to pay $40 or whatever each time they go to get treatment? Why should a plaintiff, who didn’t ask for this situation to begin with, have to shell out his/her entire $5000 deductible JUST to get the care they need, when there is someone else who can and will be held responsible for this? This could drastically impact someone’s budget for other basic needs, so if there is an option (such as a lien) in place to help avoid out of pocket costs and disruptions, then it should be, and is, allowed in lieu of making someone suffer even more to carry their health costs.
There is also the problem that health insurers might limit or deny certain care. When a patient needs care, I think we can all agree that health insurance companies hurt more than help in these situations. The patient should get the care they need without having to jump through silly hoops made up to save the health plan money.
Then there’s the case of Sykes v. Vixamar and Progressive Univ. Ins. Co., 830 S.E.2d 669, 673, 830 S.E.2d 669.
The Court of Appeals held that a medical provider’s lien (rather than the billable amount for the plaintiff under a possible health plan) was evidence of the amount “actually necessary to satisfy the bills.” Plain and simple, if the court wanted to push a view that there was an obligation to use health insurance, it had ample opportunity to do so here. It did not.
The ultimate conclusion is this: The correct reading of the NC Rule of Evidence 414 is that if there are health insurance adjustments that were actually taken, then the liability carrier can take them into account (in other words, get a credit for them) when evaluating its responsibility to the plaintiff. But if there are no actual health insurance adjustments because the health insurance was not billed (for whatever reason) then liability carriers are legally compelled to consider the amount represented in the bill as the amount necessary to pay the bill.
If you’re running into some adjusters just making stuff up about your injury claim, give me a call at 919-929-2992







