Charlotte Injury Attorneys Blog

How much is the loss of an arm or leg due to a doctor's negligence worth to you? What about the loss of the ability to walk due to a medical error? North Carolina Republicans think that the maximum amount of money a jury should award for non-economic damages, such as the loss of an arm, leg or the ability to walk, due to medical negligence is $250,000. Not only that, but they want to remove the ability of a jury in North Carolina to award more than that to a person, even if the jury thinks the amount should be higher.

Under proposed Senate Bill 33, North Carolina Republicans seek to limit the amount a jury can award you for "pain, suffering, emotional distress, loss of consortium, inconvenience, physical impairment, disfigurement and any other nonpecuniary, compensatory damage." This includes the loss of one or more limbs, paralysis, even the loss of eyesight. This bill is an attack on the rights of the citizens of North Carolina and should not be tolerated.

This bill takes decision-making away from juries. The jury system is one of the hallmarks of our legal system. The ability to have your case heard by a jury of your peers is one of our most basic freedoms as Americans. Yet the Republicans in the North Carolina Legislature want to take this ability away from juries.

A jury in North Carolina is made up of 12 people who are selected at random from the county where the courthouse sits. It is extremely difficult to get 12 people to agree on anything. In a medical malpractice case, the jury must decide whether the doctor's actions fell below, or deviated from, the applicable standard of care. Then the jury must decide whether this deviation from the standard of care was a cause of the plaintiff's injuries. Finally, the jury must decide how much money to award as damages.

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A few weeks ago I posted about Medicare Liens and what people who suffer an injury as the result of someone else's negligence need to be on the lookout for if they have Medicare. Similar to Medicare, if a person has Medicaid and suffers an injury, Medicaid may be entitled to a lien on any proceeds received by the person. This lien extends to payments for medical expenses that Medicaid has made on behalf of the person for medical services related to the injury.

Medicaid is a government-run health insurance plan for people and families who have low income or low resources. Medicaid is jointly funded by the states and the federal government, but it is run by the states. Like Medicare, Medicaid must be paid back for any payments made on behalf of the Medicaid recipient. Also like Medicare, the Medicaid program is under-funded and over-worked.

At the earliest sign that Medicaid has made payments on an injured person's behalf, the attorney needs to immediately begin the process of notifying Medicaid and getting documentation of the benefits Medicaid is claiming have been paid on behalf of the injured person. Once the listing of payments is received from Medicaid, the attorney needs to carefully review all payments to make sure they are related to injuries sustained in the loss that was due to the other person's negligence. Due to recent rulings by North Carolina's appellate courts and a position taken by Medicaid, Medicaid believes that it is entitled to payment for all medical bills incurred by the Medicaid recipient between the date of the injury and the settlement. Medicaid's position on this issue is totally illogical. This is an on-going issue that is being fought by attorneys across the state.

Another issue facing attorneys in North Carolina is how to approach the issue of minor clients who are Medicaid recipients. This is because Medicaid's lien is based on reimbursement for medical expenses paid. However, a minor's parents are the persons who have liability and therefore the recovery right for medical expenses. The portion of a minor's settlement for pain and suffering belongs to the minor. So, the issue is whether a parent can waive the claim for medical expenses and allow the settlement to only be for the minor's pain and suffering. This would usually apply when there are severe injuries and limited insurance coverage.

As reported in several news outlets last week, including Business Week, Allstate Insurance Company will pay $10 million in a multi-state investigation into how the company handles bodily injury claims. As Business Week reported, "[t]he exam found "inconsistencies in Allstate's management and oversight" of a software program called Colossus, and that Allstate "failed to modify or 'tune' the software in a uniform and consistent manner across its claims handling regions." When a person suffers an injury in a car collision caused by the negligence of someone else, the person may have a bodily injury claim for the injuries suffered. This claim is separate and independent of a property damage claim.

This news is important for several reasons. First, it shows that at least some people are taking a hard look at how Allstate handles bodily injury claims. Attorneys who deal with Allstate on injury claims on a daily basis already know that Allstate is one of the most difficult insurance companies to deal with in getting fair compensation for injured clients. Second, it will hopefully lead to a more uniform treatment of injured persons.

The most important reason this story is important is that it highlights the Colossus program that is used by Allstate to evaluate claims. Colossus is a computer program that is used to evaluate claims. It takes the human element out of evaluating claims and has come under fire in numerous outlets. This program is usually hidden from public view and very little is known about it. The problem with Colossus is that it takes data from claims that Allstate handles and inserts into the computer program and then the program spits out a number. The computer program however, does not factor in any human element and fails to consider the differences in each claim. Instead it treats all injuries as the same when nothing could be further from the truth. Each person who is injured as the result of a car collision has a different body that has been through many different things. No person's body is the same, just like no bodily injury claim is the same. Hopefully more light will be shed on Allstate's dark Colossus program.

When a person suffers a personal injury, such as a car accident, that was caused by the negligence of someone else, the injured person may be entitled to collect monetary compensation for medical bills, lost wages, pain and suffering, or other losses. Settling an injury claim has never been more difficult. Over the past several years, various entities have begun claiming liens or rights of reimbursement on injury settlements or recoveries. These entities will not do anything to assist in the recovery of the funds. Instead, they want the injured person or his/her attorney to do all the work and then pay them back in the end. These various entities can include Medicare, Medicaid, or even the person's health insurance company. Over the next few weeks, we will look at these different entities and why it is important to be aware of them when settling or receiving compensation for a personal injury claim.

This week: Medicare.

Medicare is United States government-run health insurance plan which provides health insurance to people who are 65 years old or older, or who meet other special criteria. When a Medicare recipient suffers a personal injury and Medicare makes payment to a medical provider on behalf of the Medicare recipient, Medicare has a lien on any proceeds that the injured person receives to the extent of Medicare's payments. This means that Medicare must be paid back for any payments Medicare has made. If Medicare is not paid back, Medicare can pursue the Medicare recipient or the attorney, if an attorney was representing the Medicare recipient, for the money.

Dealing with Medicare is not an easy task. Medicare is under-funded and the employees are over-worked. Getting information from Medicare takes time and patience. It requires notifying Medicare early with the correct information, reviewing the payments that Medicare claims are related to the injuries sustained in the injury, and then obtaining the correct final information. When Medicare makes a claim for reimbursement, it may include charges for totally unrelated medical treatment. It is very important to make sure that only charges related to the injuries for which the person is making the recovery. The final step is to make sure that Medicare is paid within 60 days of the injured person or attorney receiving compensation.

Beginning in 2009, Congress enacted new legislation which changed some of the reporting requirements for Medicare. These new laws are being phased in over time. The changes require insurance companies to notify Medicare when they settle a claim involving a Medicare recipient. The laws impose severe penalties on insurance companies who fail to make the reports. As a result, the insurance companies are going overboard and reporting every settlement to Medicare. This is overkill and is not required by Federal law. When dealing with Medicare, it is important to know the law and procedures that are applicable.

I recently had a conversation with some colleagues about whether lost wages that are collected in a personal injury case are taxable as income. The answer is that they are not taxable and are excluded from a person's gross income. The IRS excludes from gross income all funds received as compensatory damages when a person has suffered a personal injury or sickness. The IRS has had a long-standing policy that such damages should not be taxed.

Compensatory damages include all damages for medical expenses, pain and suffering, and lost wages. It is important to note that the compensatory damages must be received as a result of personal injury or sickness. However, the personal injury need not be suffered by the person collecting the damages, if the damages are related. This applies when a person asserts a claim for loss of consortium. A claim for loss of consortium is a claim that the spouse of an injured person has if the non-injured spouse society, affection and companionship of the injured spouse.

The main issue in the conversation with my colleagues was whether damages received for lost wages were taxable. As stated above, they are not. I agree that lost wages should not be taxable in this context for several reasons. First, when a person settles a personal injury claim, as opposed to going to court for a trial, the settlement rarely, if ever, outlines what each dollar of the settlement is for. Second, if the case went before a jury, there would need to be expert testimony about how the lost wages would be taxed. This would require calling unnecessary witnesses and spending unnecessary court time. Third, it would require too much supervision by the IRS of settlements and lawsuits across the country.

The compensatory damages excluded from taxable income cannot be related to damages received for claims other than personal injury or sickness, such as a claim for breach of contract. Also, punitive damages are not compensatory damages and are not excluded from gross income by the IRS.