State Farm’s latest hex upon injury victims
*AGENT/FRIEND DISCLAIMER: I have several friends who are State Farm agents and at the same time kind and wonderful people. This is not meant as a slight against the agents of State Farm, but it is an accurate report of what the claims department of State Farm is doing now. Love you guys, but this stuff is going down and people should know.
While you were asleep in 2011 the Republican-controlled General Assembly of North Carolina passed a bill that is referred to as the “billed v. paid” legislation. This changed the Rules of Evidence to allow evidence of what was necessary to pay the bill, as opposed to what was actually billed, when people were seeking recovery for health care expenses. Here’s the text of the Rule:
“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.”
The best way to explain what this means is to go back in time before it was passed.
In the good old days, when you were attempting to recover against someone who harmed you, what they owed you was whatever was billed by your health care provider, regardless of your health insurance adjustments. That meant that if your hospital bill was $5000, your health insurance paid $3000, and the hospital wrote off the other $2000 as part of their contractual adjustment with the insurance company, the bad guy in your case owed you the full $5000 because that’s what was billed.
Now, what is allowed into evidence, and therefore all a victim is allowed to recover, is the amount that is necessary to pay the bill. So in the above example, you could only recover the $3000 on that bill, even though it was billed at $5000.
That’s right, now tortfeasors get credit for the health insurance that you pay for. Super fair, right?
That’s sarcasm, by the way. Of course it’s not fair.
We aren’t in a position to change that law now, and maybe will never be, so we have to deal with it.
What’s unfortunate is that, as insurance companies are wont to do, State Farm’s claims department is taking its own unilateral and irrational interpretation of this Rule of Evidence. State Farm claims is telling victims of their insureds that they don’t have to pay any bills that aren’t paid by health insurance.
Go back and look at the text of the Rule. There isn’t anything that even comes close to, “Thou shalt use thine health insurance.” There is no such compulsion in the rule whatsoever. But State Farm is claiming that there is.
This may seem simply like an annoyance to those of you who aren’t in a claims situation right now. But here is where it’s getting really, really ugly: Many people in auto accidents sustain soft tissue neck and back injuries that they believe to be best treated by chiropractic care. Health insurance isn’t exactly friendly about chiropractic care, and the co-pays are dreadfully expensive. As a result, what most people do is simply go to the chiropractor, not use their health insurance, and have the bill wait until the case is settled. If they are forced to use their health insurance, then they would have to be shelling out $40ish every time they are treated, which is normally 3 times a week for a few months. Who do you know that can sustain that sort of expenditure? And why should they when they are the victim and didn’t ask for this in the first place?
Why shouldn’t State Farm do this? Several reasons:
- Nowhere in this revised Rule of Evidence does it say that a victim has to use health insurance. Period.
- Your health insurance is yours. You can choose to use it or not, and the insurance company of the knucklehead who just ran you over shouldn’t be able to tell you when to use it.
- When you try to take the path of least resistance as a victim in this situation, you are victimized further because using your health insurance is going to cost you more out of pocket when you go to a chiropractor. You bear more of the burden than you should, for an injury that wasn’t your fault in the first place.
What can we do? Well, the only real solution is to file suit over and over again and beat State Farm on this issue enough to cost them money and get them to change course. The problem with that is not many people want to file suit given the uncertainty, time, and expense involved. But that’s the reality we are facing now.
So the next time you think that personal injury attorneys are the reason that law suits are filed, stop and think about how insurance claims departments can necessitate this uptick in litigation because of their opportunistic and manipulative practices.
If you have an auto accident, call me. I would like to help. 919-929-2992.
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