Well, the world's ugliest law blog has hit 30,000 unique visitors after a little less than 2 years of operations.
Not bad for a blog concentrating on one of the more boring topics in the world: liens and subrogation.
Here are the stats as of today:
Maybe I'll set my summer intern loose on trying to make this Blog look slick and sophisticated.... probably not.
Chris Nichols
I received a good question today and thought I would share my thoughts on the issue. The question concerns Medicaid and "med pay". In NC, Medicaid gets 100% of med pay (first party) insurance proceeds. The problem is that quite often physicians and chiropractors often receive the med pay before the lawyer is involved. Or, alternatively, the medpay is the only way for the client to receive certain non-Medicaid covered treatment.
So when you make a settlement which will not cover "all" the bills, how do you handle this scenario? I see two ways to go about making the disbursement. I can't say if one or the other is "right" as I don't think the statutes clearly cover this.
It should go like this, hypothetically:
Scenario 1
Assume:
Med pay $2,000 (already paid to Chiro 1)
Settlement $10,000
Medicaid Lien: $5,000
Chiro 1: $1,000 (balance after med pay received of $2,000)
Chiro 2: $2,000 balance
So, now let's apply the law and do the math:
$10,000 Settlement
-$3,333.33 Atty Fees
$6,666.66 Balance
1/3 of settlement is $3,333.33 for Medicaid purposes (Medicaid is limited to recovering 1/3 of settlement)
1/2 of Net is $3,333.33 for NCGS 44-49 lien purposes (Medical liens can only force the attorney to pay 1/2 of the Net settlement after attorney fees and it makes it easier when 1/2 of net and 1/3 are the same thing).
Medicaid shares pro-rata with unpaid medical providers within the 1/3.
$5,000 Medicaid
$1,000 Chiro 1
$2,000 chiro 2
$8,000 $3,333,3/$8,000 = 41.66% shares of the 1/3
Now we figure the prorata share for each lien holder using the percentage from above:
5,000 x 41.66% =$2,083.31
1,000 x 41.66% = $416.6
2,000 x 41.66% = 833.20
That's how the 1/3 should be distributed BUT, since Medicaid is entitled to 100% of the medpay, they will get another $2,000 on top of the share above.
So:
$10,000 Settlement
-$3,333.33 Atty Fees
$6,666.66 Balance
-$2,083.31 Medicaid
-$416.6 Chiro 1
-833.20 Chiro 2
$3,333.50
-$2,000 Medicaid Med pay
1,333.50 to Client
But there appears to be another way to do this. In the first scenario above we prorated Medicaid's full lien, then paid Medicaid the $2,000 from the remainder of the settlement.
The second method would pay Medicaid the $2k medpay FIRST, then use the balance of the lien for proration purposes. That would give the other providers more money under pro-ration.
The second method would look like this:
Scenario 2
$10,000 Settlement
-$3,333.33 Atty Fees
$6,666.66 Balance
1/3 of settlement is $3,333.33 for Medicaid purposes
1/2 of Net is $3,333.33 for 44-49 lien purposes (makes it easier when 1/2 of net and 1/3 are the same thing)
Medicaid shares pro-rata with unpaid medical providers within the 1/3. (We've already taken out the $2k Medicaid will receive)
$3,000 Medicaid lien
$1,000 Chiro 1
$2,000 chiro 2
$6,000 $3,333.33/$6,000 = 55.55% shares of the 1/3
Now we figure the prorata share for each lien holder using the percentage from above:
3,000 x 55.55% = $1,666.50
1,000 x 55.55% = $555.55
2,000 x 55.55% = $1111.11
Since Medicaid is entitled to 100% of the medpay, they will get another $2,000 on top of the share above.
So:
$10,000 Settlement
-$3,333.33 Atty Fees
$6,666.66 Balance
-$1,666.50 Medicaid
-$555.55 Chiro 1
-$1111.11 Chiro 2
$3,333.50
-$2,000 Medicaid (Med pay)
1,333.50 to Client
Let's compare scenarios now:
Scenario 1:
$2,083.31 (Medicaid prorated share) + $2,000 for med pay = 4,083.31 to Medicaid
$ 416.6 Chiro 1
$ 833.20 Chiro 2
Scenario 2:
$1,666.50 (Medicaid prorated share) + $2,000 for med pay = 3,666.50 to Medicaid
-$555.55 Chiro 1
-$1111.11 Chiro 2
So, technically, Scenario 2 is better for your client in my mind because Medicaid is paid in full with $3,666.50 and there is more money available for the doctors (who are not paid in full but might be more likely to accept the higher % payment as payment in full).
I don't know if there is a right or wrong to his one. I'm sure Medicaid would prefer to be paid more, and they may have a point since technically, the Medpay should have gone to them in the first place.
--Chris Nichols
As a personal injury lawyer in the state capitol, Raleigh, I hear a lot of "complaining" by physicians about "crazy lawsuits." I always tell them (many of whom are friends) that malpractice lawsuits in North Carolina are either declining or at worst, holding steady.
The main insurer for physicians, NC Medical Mutual, has just announced that they MADE so much money last year, they are issuing a refund to doctors. And guess what? This is NOT a result of tort reform. We have had no major laws pass in our state which resulted in "savings."
In fact, based upon actuarial studies, the reality appears to be that when lobbyists for the insurance companies were screaming for tort reform, what they were doing behind the scenes was RAISING premiums for physicains to create what I would call a "manufactured problem." The doctors' own insurance company was gouging them, and then asking them to donate money to "tort reform" causes, which of course, are insurance company lobby groups.
Looks like the physicians have finally reigned in their own insurance company by realizing that the "crisis", if there is one, is mostly in the minds (and wallets) of the insurance industry.
from the News and Observer
N.C. insurer to pay dividend
Medical Mutual will also pay off debt as drop in malpractice suits boosts profit
David Ranii, Staff Writer
The state's largest medical malpractice insurer says that fewer lawsuits filed against doctors will allow it to pay its policyholders a $3 million dividend -- its first dividend ever.
Raleigh-based Medical Mutual Insurance Co. of North Carolina said it posted a 7.4 percent increase in profit last year as the number of lawsuits filed against its policyholders fell to 298 last year. That's down from 326 in 2006.
In addition to paying the first dividend since the company was founded in 1975, Medical Mutual also plans to erase its $10 million in debt this year. And, over the next four years, it plans to refund $12 million in capital supplied by its policyholders in 2003 as part of a plan to shore up the company's finances and stabilize its premium rates.
In recent years the N.C. Academy of Trial Lawyers, whose members include the personal-injury attorneys who sue doctors for malpractice, has bashed Medical Mutual for charging rates that the lawyers' group labeled excessive.
Medical Mutual's CEO Dale Jenkins said the dividend and capital refund to shareholders demonstrates "we are a very good steward of the resources the [doctors] have provided to us. We recognize every day that it is their money."
Medical Mutual hasn't sought a rate increase from state regulators since 2005. The latest positive financial results will allow the insurer to hold rates steady again this year.
Medical Mutual's dividend will be in the form of a credit that physicians receive when they renew their policies, said Jenkins. The average credit will be about 5 percent of the annual premium for most of the 6,300 North Carolina physicians who are policyholders. Medical Mutual is a mutual insurance company that is owned by its policyholders.
"We're always glad to see a company ... able to give money back to its shareholders," said N.C. Insurance Department spokeswoman Chrissy Pearson.
Jenkins said the number of medical malpractice lawsuits has fallen nationwide. In addition, Medical Mutual has taken steps aimed at limiting lawsuits. The company has established stringent underwriting guidelines in order to avoid insuring doctors it considers high-risk, Jenkins said. "We do not take all comers," he said.
The company also sends out teams of nurses to assess doctors' practices and recommend ways to minimize risks, he said.
Profit last year totaled $26.1 million, up from $24.3 million in 2006, Medical Mutual reported. Assets increased by $44.9 million, to $416.2 million.
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Chris Nichols
NC Lawyers' Weekly has provided a great link to an article that was run in the Winston-Salem Journal about contributory negligence laws in North Carolina.
Contrubutory Negligence is an issue that people don't know or care about, until they face the problem themselves. Basically, in NC, even if you are hurt by someone else's negligence, if the other person can prove you are just a little bit to blame for your injury, you are barred from any recovery. That's right. Someone else is 99.9% to blame, and you are barred from recovery.
Columnist Scott Sexton has written a series of excellent articles on the subject and really puts a human face on this convoluted and political issue. I highly recommend reading these articles.
I'll also add this to the mix. One of the problems with contributory negligence is that it is so often a bar to people seeking legal representation. Lawyers who represent injured people know that they could spend years working on case and lose everything at trial simply because a jury felt the Plaintiff may have played some very small part in causing the accident.
Here are some the the previous articles by Sexton:
Contibutory Negligence: it's "an insurance company's dream "
"Never mind that Joshua was 7 years old and was within 3 feet of the curb, or that Logan was drunk and driving on the wrong side of the road. "By way of affirmative defense, Defendant Logan pleads the contributory negligence of the decedent Plaintiff Joshua Franklin Palomares-Beckles," wrote Rodney Guthrie, Logan's attorney. If a jury in North Carolina decides that you are even a tiny bit at fault in this sort of case, you are entitled to nothing under state law, under a concept called contributory negligence. "In general, I'd say contributory negligence is an insurance company's dream," said Walter Holton Jr., the attorney who filed the lawsuit on behalf of Beckles-Palomares. "
Wreck victim faces being victimized by outdated law
"After an automobile accident in New Hanover County involving his daughter, Ashley, a student at the University of North Carolina at Wilmington, Norris has become something of an expert on a legal concept known as "contributory negligence," an outdated and completely unfair area of insurance law used only here and in three other states. That leaves option C. "Our insurance company is also using the contributory-negligence law claim that Ashley is limited in what we can recover," Norris said.
'There is no lobby for the little people' in this state
"Just four states - North Carolina, Virginia, Alabama and Maryland - still hang on to the concept of contributory negligence, a relic from English Common Law. "
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| Scott Sexton | ||
| Bio | ||
On its face, insurance law - specifically a legal concept called “contributory negligence” - is something that only a serious policy nerd could love.
That is, unless (or until) you or someone you know gets hosed by that law. Then it’s not so boring.
Contributory negligence works like this: If you’re in an accident and deemed to be just 1 percent at fault, you’re not legally entitled to one red cent to cover your damages from the idiot (or his or her insurance company) who was 99 percent to blame.
Three recent columns explored some of the more outrageous abuses of this law. Possibly the worst was the insurance-company attorney who argued that a 27-year-old man killed by a hit-and-run driver in October 2003 while changing a flat tire in Orange County was partly responsible for his own death.
It’s a shameless, outdated blame-the-victim strategy. It also seems like an easy law to change.
Yet objections remain. The state, for example, could switch to a “comparative-negligence” system. If you’re 90 percent at fault, you (or your insurance company) pay 90 percent of the damages.
“Comparative negligence is a nightmare to apply. Few people agree on the percent fault they are assessed, it increases lawsuits, is a cash cow for lawyers, and raises everyone’s insurance rates,” wrote one reader who works in the insurance industry. “If you haven’t noticed, N.C. enjoys some of the lowest auto-insurance rates in the country.”
Good point. And it’s one worth exploring.
North Carolina does indeed enjoy consumer-friendly auto-insurance rates - the sixth lowest in the country, according to the N.C. Department of Insurance.
That’s not, however, because of any sense of fair play by insurance companies nor because contributory negligence keeps costs down.
The credit goes to a man who next to nobody has heard of, state Insurance Commissioner Jim Long. He is basically the final word on insurance rates in North Carolina.
Every Feb. 1, the N.C. Rate Bureau - an umbrella organization representing insurance companies - files a rate request. The bureau then makes a rate recommendation. Actuaries and attorneys with the Department of Insurance negotiate any changes with the rate bureau. If there’s no agreement, then Long decides.
“It’s a pretty long and pretty dull process unless you are an actuary,” said Chrissy Pearson, a spokeswoman for the Department of Insurance.
Given that background, I figured that Long’s thoughts on the merits of contributory negligence versus comparative merits would be worth hearing.
You can read the rest of the article by going to the Winston-Salem Journal.
-Chris Nichols
We've had a great decision published by our North Carolina Court of Appeals which finally clarifies the issue of prejudgment interest on Underinsured and Uninsured Motorist Arbitrations in North Carolina.
The gist of the problem was that the while the Uniform Arbitration Act provides that arbitration Awards can be reduced to judgments and filed as judgments, AND judgments in North Carolina are subject to prejudgment interest at 8% per annum, the insurance policies were not clear as to whether pre-judgment interest was covered under the policy.
That problem lead many arbitration panels to conclude that they did not have the authority to award pre-judgment interest. Then as an extra twist, there is North Carolina case law (see Palmer v. Duke) which stands for the proposition that if an arbitration panel does not award a certain damage, a Superior Court Judge can not change or modify that award to include the damage. In 2000, there was another Court of Appeals case which went on to say that if a panel failed to award something in their award, even if both parties agreed that the award was incorrect but one party objected to an amended award, the panel did not have the authority to amend the award (see North v. North)
Thus, Courts were ruling that they could not add prejudgment interest to the Award even when they were reducing the Award to a judgment.
Major Catch 22.
Finally, this has come to a Court of Appeals panel and we have some clarification. Sprake v. Lech, NC COA 06-1690. The case is best summarized in the last few paragraphs:
Defendant argues that the language of the agreement did not include any specific provision allowing prejudgment interest. The contract permits an insured party to demand arbitration when the parties “do not agree: 1. Whether that insured is legally entitled to recover compensatory damages from the owner or driver of an uninsured motor vehicle or underinsured motor vehicle; or 2. As to the amount of such damages . . . .” It is true that there is no explicit mention of prejudgment interest in this section. However, as our Supreme Court has stated,
[a]n ambiguity can exist when, even though the words themselves appear clear, the specific facts of the case create more than one reasonable interpretation of the contractual provisions. In interpreting the language of an insurance policy, courts must examine the policy from the point of view of a reasonable insured.This Court has applied the rule that “prejudgment interest up to the amount of the carrier's liability limit is part of compensatory damages for which the UIM carrier is liable.” Austin v. Midgett, 159 N.C. App. 416, 419, 583 S.E.2d 405, 408 (2003) (citing Baxley v. Nationwide Mutual Ins. Co., 334 N.C. 1, 11, 430 S.E.2d 895, 901 (1993)). This Court has also noted that “unless the policy of insurance provides to the contrary, prejudgment interest constitutes a portion of a plaintiff's damage award.” Ledford v. Nationwide Mutual Ins. Co., 118 N.C. App. 44, 50, 453 S.E.2d 866, 869 (1995). Given the law as it stands in this State, we hold that the provision granting the arbitration panel authorityto address issues of “compensatory damages” was ambiguous as to whether prejudgment interest was available. As such, we resolve our doubt “against the insurance company and in favor of the policyholder.” Register, 358 N.C. at 695, 599 S.E.2d at 553. The arbitration panel had the authority to address the issue and the trial court properly confirmed the amended award. Defendant's assignment of error regarding the trial court's denial of its motion to vacate the arbitration award is likewise without merit. We therefore affirm the order of the trial court.
Congratulations to Jay Ferguson, of Thomas, Ferguson & Mullins, L.L.P., of Durham. The above link tracks to the unpublished opinion, but the COA has agreed to make the case a published opinion so you can cite it in briefs now. This case will have two great side effects. First, insurance companies will not drag their feet on scheduling arbitrations because the extra time will cost them money. Second, arbitration panels will finally have some authority to "back up" interest awards.
If you have an arbitration in North Carolina, bring this case with you for your panel to consider. And as always, it is best to have this issue resolved in a pre-arbitration agreement if possible. Finally, I would calculate interest (or present to your panel) the interest running from the day the 30 day notice of tender of liability limits is made to the UIM carrier, or the day that the Demand package is sent to the UM carrier.
I think it is sufficient for the arbitration award to simply cite "that upon motion of the Plaintiff and based upon the authority vested in this pane pursuant to Sprake v. Lech, NC COA 06-1690, this arbitration panel awards prejudgment interest on the award to be paid by defendant or any unnamed defendant responsible for paying the award." Probably it would be better for the panel to award an actual sum so there is no post award battle over how the interest should be calculated.
Chris Nichols
Looks like Allstate is willing to pay $2.4 Million dollars to hide their claims practices:
Allstate won’t produce records despite $25,000-a-day fine
By JOE LAMBE
The Kansas City Star
Allstate Insurance Co. lawyers made this clear Tuesday to a Jackson County judge: They will not produce key records for public view no matter how much he fines them.
And Judge Michael Manners has already fined them $25,000 a day since mid September — a total of $2.4 million and growing.
And last month the Missouri Supreme Court ordered the documents produced,
At issue are the so-called McKinsey documents, a kind of holy grail for plaintiff lawyers nationwide.
Plaintiff lawyers allege they show how Allstate set up a claims payment system in the 1990s that shortchanges clients while earning huge profits.
Allstate contends the 12,500 pages prepared by consultant McKinsey & Co. are trade secrets used to create company policies, methods and claims procedures.
Until this year, state high courts had agreed with the company. But last month the Missouri Supreme Court ruled that it must provide them in the case before Manners.
Allstate still refused. Tuesday’s hearing took place in part so Manners could consider whether to increase his daily fine.
The case stems from a car wreck seven years ago on Interstate 70. Allstate client Paul Aldridge of Hawaii ran into the back of a truck and severely injured the driver. He is suing Allstate for bad faith for refusing to pay the claim for years.
As for the documents, Ronald Getchey, a San Diego lawyer representing Allstate, told the judge: “We won’t produce them without a protective order (sealing them).”
He questioned whether the $25,000-a-day fine was legal and whether the judge’s order finding them in contempt was too vague.
Plaintiff lawyer Steve Garner of Springfield called those arguments “silliness.”
Getchey argued that the matter is uncertain and noted that the Missouri Supreme Court ruled that the company could return there if Garner tried to collect the $25,000-a-day fine, which would go to Aldridge.
Garner said he was more concerned about getting the documents and going to trial, but he may start collecting the fine for his client.
Getchey told the judge: “We have a principled difference we’re not able to resolve until somebody says what the law is.”
Manners countered: “I’ve already said that, but you just don’t agree.”
Then he set a July trial date, the first time Garner had available.
Getchey noted that was a long time at $25,000 a day.
“We shouldn’t get a $5 million fine because counsel is not available to try the case,” he said.
Manners conceded the point and said he may not increase the daily fine after all.
Because I run a business that is, in part, dependent on advertising, I check out Google searches to see where my firm "places" in the Google rankings. While looking through some of the "top hits" I found a local Raleigh firm "recommended" by a Blogger. Sure, why not? Except that this "Blogger" is from another state, and if you read the "small print" she makes product endorsements for CASH. That's just wrong, and deceptive. Would you hire a firm that pays people to endorse them?
So, if you are looking for a Raleigh personal injury attorney, you have found one. My law firm, Nichols Law Firm, never pays anyone for endorsements. We provide personalized service to clients, and are available to meet with you during your hours, at your home if you need us too. There is never a fee for a consultation.
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Chris Nichols
I had a great time speaking to the New Lawyers at the North Carolina Academy of Trial Lawyers today.
I promised to post the supporting materials and you can download the Personal injury Checklist here:
Download final_pi_check_list.pdf
Good luck to all of you. If you need to ask any questions, just email me though my website.
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Chris Nichols
