Personal Injury Law

List of North Carolina Medicaid lien contacts for 2022 to request lien statements for personal injury cases

Hey wait, when did there get to be multiple insurers providing Medicaid benefits!?  And who do I contact to get a Medicaid lien?

Great questions!  Some answers:

Back on Feb. 4, 2019, the North Carolina Department of Health and Human Services announced the selection of Prepaid Health Plans that will participate in Medicaid managed care when the program launches in November 2019. The Department awarded contracts to five entities:

  • Statewide PHP contracts were awarded to the following entities which will offer Standard Plans in all regions in North Carolina:

        -  AmeriHealth Caritas North Carolina, Inc.

        -  Blue Cross and Blue Shield of North Carolina

        -  UnitedHealthcare of North Carolina, Inc.

        -  WellCare of North Carolina, Inc.

        - A regional PHP contract was awarded to Carolina Complete Health, a provider-led entity, which will offer plans in Regions 3 and 5.

Plaintiff lawyers who represent clients who are Medicaid recipients who have been in car wrecks need to track what these entities pay for medical treatment in order to account for the Medicaid lien and repay the government.

Before this privatization of Medicaid, all of the subrogation has been handled by a group called HMS.  Now that the PHPs have come along, we have to request subrogation information from each PHP.

Here is a list of the subrogation contacts for the Medicaid PHPs.

PHP Medicaid Lien Contact Information:


  • Carolina Complete Health

Rawlings Group

4 Eden Parkway

La Grange, KY  40031

Phone: 888-285-1276  

Fax: MANUAL FILE COORDINATOR at 502-440-1100

Email: [email protected]


  • WellCare:

Rawlings Group

4 Eden Parkway

La Grange, KY  40031

Phone: 888-285-1276  

Fax: MANUAL FILE COORDINATOR at 502-440-1100

Email: [email protected]

  • Healthy Blue

 P.O. Box 659940

San Antonio, TX 78265-9939

Phone: 844-916-3651

Fax: 844-634-2520

Email: [email protected]


  • AmeriHealth

Attn: Subrogation Unit

200 Stevens Drive

Philadelphia, PA 19113
Phone: 215-863-5837

Fax: 215-863-5221
Email: [email protected]


  • United Healthcare

Optum Subrogation

11000 Optum Circle

Eden Prairie, MN 55344

Fax: 800-842-8810

Email: [email protected]


  • Trillium: 

Phone: 877-695-1296



The subrogation providers above are subject to change, but this is the list as of 8/25/2022.


Chris Nichols

Nichols Law Firm

North Carolina and Raleigh Personal Injury Lawyer 1.800.906.5984

What happens when I get hurt or injured by a drunk driver in North Carolina?

I had the great pleasure of teaching a class to over 110 criminal defense lawyers on February 28, 2020.  They were all gathered to learn how to defend their clients who have been charged with DWI or DUI.  I was there to tell them how it works when I sue their clients for injuring my clients in drunk driving accidents.

So what does happen when someone gets hurt or killed by a drunk driver in North Carolina?


First, let me make this clear:  Nichols Law Firm only represents people injured or killed by drunk drivers.  We never defend drunk drivers. When I teach a class to lawyers who defend drunk drivers, I'm teaching them the best ways to help my injured clients, which sometimes can be mutually beneficial to their client.

Drunk Driving Accidents

When a North Carolina drunk driver wrecks your car and injures you or your loved ones, we all hope that they are arrested at the scene.  The arresting officer will do field sobriety tests, and if the driver does poorly on the tests, there will be probable cause to request a breath test for blood alcohol concentration.  The drunk driver can refuse that test but the arresting officer can force a blood draw to get the results.  Any blood alcohol concentration over .08% will result in an arrest for driving while intoxicated.  Some refer to that simply as DWI or DUI.

Is a personal injury claim against a drunk driver any different from a regular personal injury claim?

A personal injury case against a drunk driver is pretty similar to one against a non-drunk driver.  An adjuster from the drunk driver's insurance company will want to take a recorded statement from you over the phone.  They may ask you about all the ways you think the driver was intoxicated.  It's really important to get that right and make sure that you tell them all the signs of intoxication you saw:  glassy eyes, smell of alcohol, unsteady on feet, slurring words, and of course, any statements the other driver made about drinking.  

So what are punitive damages in drunk driving cases?

In North Carolina, under General Statute Chapter 1D, Punitive Damages, anyone hurt or killed by a drunk driver, who proves the driver was drunk and driving negligently, may be entitled to receive punitive damages on top of the compensatory damages present in every injury case.  Compensatory damages are things like medical bills, lost wages, pain and suffering, permanent scars, lost work, ambulance and doctor bills, and permanent disability.  Punitives damages are damages on top of the compensatory damages and are meant solely to punish the drunk driver and deter other people from drunk driving.

§ 1D-1.  Purpose of punitive damages.

Punitive damages may be awarded, in an appropriate case and subject to the provisions of this Chapter, to punish a defendant for egregiously wrongful acts and to deter the defendant and others from committing similar wrongful acts. (1995, c. 514, s. 1.)

In general, punitive damages are limited to 3 times the amount of the compensatory damages, or $250,000, whichever is greater.  But the Legislature made an exception to the cap on punitive damages in North Carolina:  drunk drivers.

§ 1D-26.  Driving while impaired; exemption from cap.

G.S. 1D-25(b) shall not apply to a claim for punitive damages for injury or harm arising from a defendant's operation of a motor vehicle if the actions of the defendant in operating the motor vehicle would give rise to an offense of driving while impaired under G.S. 20-138.1, 20-138.2, or 20-138.5. (1995, c. 514, s. 1.)

Accidents Caused by Drunk Drivers

Do I need a lawyer to represent me when I have been hit by a drunk driver?

If you or a loved one gets hit by a drunk driver in Raleigh, Durham, or Chapel Hill, it is a good idea to at least have a free consultation with a lawyer.  There are many reasons for this.  First, you may be required to come to court as a witness in the drunk driving prosecution.  Or you may be called on to give a victim impact statement at the drunk driver's sentencing hearing.  While the local District Attorney offices do a great job with victims, they can't "represent you" or give you legal advice.  Having your own lawyer, right from the start, means that I can come to the criminal court trial with you and help you through out.  It also means that I will monitor the criminal case, and make sure the drunk driver receives appropriate punishment.

How does my lawyer help when I'm called as a witness or victim of a drunk driver?

Along the same lines, the criminal defense attorney can sometimes coordinate with me, as your attorney, to be very helpful to the injured party by facilitating money settlements with the injured party as part of criminal restitution or civil settlement.  Sometimes the drunk driver's lawyer will also coordinate with me to make sure that the insurance company for the drunk driver is paying a fair amount of money, considering the compensatory and punitive damages.

What experience does Nichols Law Firm and Chris Nichols, Attorney have making claims against drunk drivers?

I've been practicing law for 25 years and my first few years I actually defended drunk drivers when I worked for a senior attorney.  This gave me great practical insight into how the criminal prosecution works.  As a civil lawyer, I also have to prove the defendant was intoxicated, and having worked on both sides of this, I have a lot of knowledge.  At any given time, my office usually has 4 or 5 cases against drunk drivers.  Because of this, we have developed systems to catch drunk drivers in any lies or exaggerations they make about their alcohol use and rehabilitation.  It's not unusual for a criminal defendant to testify they have "put down the bottle", only to have our private investigator see them buy booze at the ABC store and drive away on a limited permit that does not allow for that.  When we catch defendants in lies like this, the cases against them often settle for more money and faster.  Rarely do we have to try one of the civil cases against drunk drivers.

If you or a loved one has been hurt or killed by a drunk driver, you can call me, Chris Nichols, directly, for a free consultation:  919.915.0212

Be safe out there!

Chris Nichols

Nichols Law Firm 1.800.906.5984

How long do I have to settle my case in NC? What do I have to do at my three year statute of limitations for personal injury? How long do I have to settle a wrongful death case?

People!  Do not let the statute of limitations slip past on your personal injury cases in North Carolina.  I've had three calls this week from people who did not have lawyers and who waited until the last second, or past the last second, to call for advice. None of these calls ended on a happy note.


In NC you have three years to settle or file a lawsuit for personal injury (but not death, that's two years)

In North Carolina you have three years to either settle a personal injury case or file a lawsuit.  I did not say "file a claim."  I did not say "talk with an insurance adjuster".  I did not say "be in the middle of negotiations."  


On the third anniversary of your car wreck, you either need to have a settlement worked out, in writing and agree upon by the insurance adjuster and you, or you need to file an actual lawsuit in a court of law in NC.

Image result for one second left on clock

If you are still negotiating with that adjuster at midnight on the third anniversary of your car wreck, you can never get anything for your claim.  The next minutes that adjuster will say "Sorry, your statute of limitations ran, you have no claim."  And so you ask, "Wouldn't the insurance company tell me that my time is running out?"  The answer is NO.  In fact, I've seen situations where the insurance adjusters actively seek to delay the settlement.


The wrongful death statute in North Carolina has a two year statute of limitations

If the car wreck resulted in a death, or wrongful death in North Carolina, the time limit is TWO YEARS. Also, to sue for the wrongful death of a loved one, there must be an Estate set up in the name of the deceased and an Administrator or Executor must actually be the party that sues.  Cases like that look like this:

The Estate of John Doe, Susan Doe, Administrator      V.       Big Truck Company, LLC 


Setting up an Estate takes time. And even though there may be one type of Estate set up, it might not be the right type to bring a wrongful death claim.


I think I get this statute stuff, do I have to have a lawyer?

Not every case needs a lawyer.  Really, a lawyer just told you that.  I talk to a lot of people on the phone, give them a few pointers and send them on their way.  It's sometimes a good idea to settle your own case when it is simple and small.  But complicated cases probably need lawyers. So it's always a good idea to call a lawyer like me, and ask.


But really, if you call me on the day that your statute of limitations is about to run out, there is a 95% chance that I will not be able to save you and your case.  Lawyers can not send an email to the court to file a lawsuit.  It sometimes takes days to draft the paperwork.  We have to find the Defendant and make sure we can serve them with papers. We need to see police reports.  This takes time.


In law we frequently abbreviate Statute of Limitation as SOL. And if you miss one, you are SOL on your SOL. 


When is the latest you should call a lawyer for a personal injury case?

I would say that the latest that I would get in touch would be six months before the statute runs out.  Put another way, two and half years after the accident for personal injury and one and a half years for wrongful death.  That gives the lawyer time to gather your medical records, talk to experts, file the lawsuit, and get it served on the defendant.  You see, even though the insurance company pays the claim, the other driver is the one who gets named in the lawsuit. So it's not as easy as my office sending a letter to State Farm. We actually have to send the Sheriff or a certified letter to someone so they can be "served."

If you waited past two and half years, you should still call for advice.  Just know that a lot of lawyers don't like taking cases that close to the statute of limitations.


What about children or kids?  How long do minors have to settle their personal injury claims or file a lawsuit?

In NC, a minor is anyone under age 18.  Minor's statute of limitations work differently than adults. A  minor's statute does not BEGIN to run until they are age 18.  Then it runs the normal 3 years for personal injury.  Crazy, right?  So if you are in a car accident at age 2, you will have until your 21st birthday to settle the claim or file a lawsuit!  This is also true for other injury claims, like sexual abuse.

But there is a catch....  (there is always a catch, right?).  The catch is this:  In North Carolina, the medical bills for an injured minor (anyone under age 18) "belong" to the mom, dad, or legal guardian of the minor.  What does that mean?  It means that because a minor can't sign a contract, when a minor goes to the hospital or doctor and has a bill for services, that bill is actually the parent or guardian's bill.  Don't pay it?  The parent or guardian gets sued by the hospital, not the minor.

So what's the catch?  Well, the catch is this- in the example above where the two year old gets hurt in a car wreck, let's assume the medical bills are $50,000.  Three years from the date of the wreck, the parent/guardian's statute of limitations to sue for those medical bills expires. So on 3 years +1 day, the minor can still sue for pain and suffering and other economic wages, but NOT for past medical expenses.

But, there is a catch to the catch!  There is a way for the parents to assign the claim for medical bills to the minor child so that those medical bills become part of the claim for the minor that does not run out until age 21.  This can be tricky and I recommend lawyer supervision to deal with this.  The good news is that it can be done quickly, so if you are reading this on the 2 year 364th day of the anniversary of an injury to a minor, it might not be too late to fix that problem.  Call me!


I spoke to someone today who told me that the adjuster was discussing her case with her one day before her three year statute of limitations. She even asked if that was going to be a problem and the adjuster said "you have an open file claim." That made the person feel good, even though it was a meaningless phrase.


When she called the day after the 3 year anniversary of her accident, the adjuster said "sorry, you didn't file a lawsuit in time, you have no claim."


No, she can't sue him for that.  Adjusters work for the driver that hit you!  Their job is to pay you the least amount of money possible. That's what they get paid to do. Not all of them are this heartless, some would warn you to get a lawyer or file a law suit. A lot of them are very good people. But consumers don't really have the information or ability to decide who is who.


I had to tell this fine person that she no longer had a claim.  It was a heartbreaker.


So if you've been waiting, even if you are still being treated for injuries, please call me or another lawyer and just get some advice (free and over the phone) on your time limits and whether you even need a lawyer.  I've been doing this (looks at watch) for 23 years now, so I've probably handled a case like yours before.  Let's talk.


Chris Nichols, Attorney

800-906-5984 1.800.906.5984

Medicaid: "Ahlborn hearings" are back thanks to the 2018 federal budget which makes Medicaid provide lien reduction hearings again. But watch the deadlines!

I'll put the most important thing first, then explain it.  This is just my opinion, and applies only to North Carolina law, but since deadlines may be running, I wanted to get it out there.
If you settled a case (by minor settlement, signed release, or Industrial Commission approval) in which Medicaid claimed a lien, between October 1, 2017 and February 9, 2018, you have 30 days from February 9 to file a motion in Superior or District court to seek a reduction of the lien under NCGS 108A-57.  30 days runs on the weekend of March 10-11, so calendar that for Friday March 9, 2018 (unless you want to play chicken with the weekend rule).  Example:  You settled a claim on October 15, 2017 that had a Medicaid lien that exceeded 1/3 of the settlement. You paid Medicaid 1/3 of their lien (or held the money) because there was no longer a statutory mechanism to reduce the lien.  You now have until March 9, 2018 to file a motion to reduce Medicaid's lien.
Let's define "settled" since that is the event that triggers the 30 day time limit to file the motion. Medicaid defines "settled" as:
        1)  The date upon which all parties execute a full Release of Claims; or,
        2)  For a minor, the date upon which the settlement is approved in a minor settlement hearing; or,
        3)  For a case in litigation that is tried, the date upon which Judgment is entered, or,
        4)  For a Workers Compensation case, the date upon which the Clincher is approved.
In addition to cases "Settled" during the period of October 1, 2017 and February 9, 2018, if you had a claim that settled up to 29 days before October 1, 2017, you may still have time to file for the lien reduction.  I can't tell you if you get only the remaining time you had left as of October 1, 2017, or if you get until March 9, 2018. Play it safe and choose the shorter time and file. Example:  You settled a claim on September 15, 2017.  Your 30 day window to file a motion for reduction would have run on Sunday, October 15, 2017.  But because federal law and state law changed on October 1, 2017, you could not file for a hearing.  I think, in the most conservative view, you now have the remainder of the time you would have had after and including October 1. And that remaining time begins to run again starting February 9, 2018.  October 1 to October 15 is 15 days.  February 9, 2018 plus 15 days is Saturday, February 24, 2018.  You would need to FILE the motion before February 24, 2018.  Think of it as a statute of limitations which is stayed because a person goes into a coma and becomes incompetent, but then they regain consciousness 5 months later and the statute starts ticking again where it left off.
Below I set out the history on this and then pose some questions you might have.  Pay attention to the part where we discuss what happens if you paid Medicaid from October 1, 2017 until February 9, 2018.  You may have an obligation to ask for a refund.
How did this get so screwed up, and what's Medicaid subrogation?
Up until 2006, the law was clear that NC Medicaid was entitled to 100% of their lien, not to exceed 1/3 of a settlement, prorated with medical providers who had valid liens.
In 2006, SCOTUS ruled in Arkansas v. Ahlborn that state medicaid subrogation statutes could not just set a percentage recovery of the settlement as the amount of subrogation and ingnore the relationship between the gross settlement, the client's recovery and the amount claimed in the medicaid lien. Ahlborn said states had to allow for a hearing mechanism for courts to set the lien in light of the recovery amount and how much of the recovery was for medical treatment as a proportion to the whole recovery.  Most states revised their Medicaid subrogation statues in 2006 and started to allow hearings to reduce Medicaid recovery.  They called them "Ahlborn hearings."
North Carolina did NOT follow Ahlborn. Much to everyone's frustration.
Several lawyers in NC challenged Medicaid's refusal to follow SCOTUS' ruling in Ahlborn.  All of the state actions challenging Medicaid's refusal failed in our appellate courts.
Then in April of 2013 SCOTUS issued an opinion in Wos v. E.M.A., upholding a 4th Circuit opinion (coming from North Carolina), and declaring that the North Carolina medicaid lien statute was in violation of the court's ruling Ahlborn.   By July of 2013, NCAJ had negotiated changes to the Medicaid lien statute to bring it into compliance with Wos and Ahlborn and provide a statutory mechanism to request a lien reduction hearing.  Those hearings need to be requested (i.e., filed with a court) within 30 days of the settlement (defined by the signing of a Release or a minor settlement or Industrial Commission approval).  This is the statute that was passed:  NCGS 108A-57
Finally, NC was compliant with Ahlborn and the few others states that ignored Ahlborn were changing too.  Meanhwile, in December of 2013, Congress was battling with President Obama to pass the first budget in years.  In October of that year, Congress allowed the government to shut down for 16 days until they passed a temporary continuing funding resolution. On December 26, 2013, Congress (to the surprise of many) passed the Bipartisan Budget Act of 2013.  Not until after it was signed into law did anyone notice this section:



LIABILITY SETTLEMENTS.— (1) STATE PLAN REQUIREMENTS.—Section 1902(a)(25) of the Social Security Act (42 U.S.C. 1396a(a)(25)) is amended— (A) in subparagraph (B), by striking ‘‘to the extent of such legal liability’’; and (B) in subparagraph (H), by striking ‘‘payment by any other party for such health care items or services’’ and inserting ‘‘any payments by such third party’’. (2) ASSIGNMENT OF RIGHTS OF PAYMENT.—Section 1912(a)(1)(A) of such Act (42 U.S.C. 1396k(a)(1)(A)) is amended by striking ‘‘payment for medical care from any third party’’ and inserting ‘‘any payment from a third party that has a legal liability to pay for care and services available under the plan’’.(3) LIENS.—Section 1917(a)(1)(A) of such Act (42 U.S.C. 1396p(a)(1)(A)) is amended to read as follows: ‘‘(A) pursuant to— ‘‘(i) the judgment of a court on account of benefits incorrectly paid on behalf of such individual, or‘‘(ii) rights acquired by or assigned to the State in accordance with section 1902(a)(25)(H) or section 1912(a)(1)(A), or’’.EFFECTIVE DATE.—The amendments made by this section shall take effect on October 1, 2014.

The very small change to the subrogation language in federal law had the effect of rendering Ahlborn and Wos moot as both cases depended on the specific language  which said "payment by any other party for such health care items or services" and  "payment for medical care from any third party" as the basis for the court's reasoning that Medicaid must, for lack of a better term, prorate settlement funds with the victim of negligence.
I called several members of Congress and found out that the provisions had been slipped in at the last minute and had been pushed by private third-party subrogation companies like Rawlings and HMS who are contractors for many state Medicaid offices.  Because these private companies take a percentage of recoveries they recover for the statse, they did not want to have payments to Medicaid (and their profits) lowered in favor of injured victims.
The statute changes did not go into effect until October of 2014, and under pressure from consumer groups, advocates for the disabled, and AAJ, the effective date was pushed to October of 2016.  Then as we got closer to October of 2016, it was pushed to October of 2017. Victims of negligence who faced massive injuries with small liability policies were receiving relief from unwieldy Medicaid liens.  Injured Plaintiffs could then use those funds to pay for services that Medicaid would not cover for the disabled Plaintiffs. Additionally, Medicaid was still prorating their recovery with valid medical lien holders under NCGS 44-49.
Meanwhile, in 2017, with a new Congress and new President, the North Carolina legislature inserted a change to NCGS 108A-57 in the July 2017 Budget (Senate Bill 257). The changes included a complete re-write of NCGS 108A-57, which eliminated a lien reduction hearing, re-instituted the 1/3 cap on Medicaid recovery (the Plaintiff repaid Medicaid 100% of the lien up to 1/3 of the gross settlement) and the proration with unpaid medical providers with valid liens was eliminated.
This new law only went into effect IF the federal changes from 2013 went into effect on October 1, 2017.  The prelude to the change in NC law was a classic "IF/THEN" proposition (highlight added):

NC Senate Bill 257


 SECTION 11H.23. If Section 202(b) of the Bipartisan Budget Act of 2013, P.L. 113-67, takes effect on October 1, 2017, as provided in Section 202(c) of that act, as amended by Section 211 of the Protecting Access to Medicare Act of 2014, P.L. 113-93, and Section 220 of the Medicare Access and CHIP Reauthorization Act of 2015, P.L. 114-10, then G.S. 108A-57 reads as rewritten:

"§ 108A-57. Subrogation rights; withholding of information a misdemeanor.

(a) As used in this section, the term "beneficiary" means (i) the beneficiary of..... (then went on to rewrite the subrogation statute)

Consumer lobbying groups were unable to persuade Congress and HHS to delay the implementation of the October 1, 2017 changes, and therefore NC law changed on October 1, 2017 pursuant to the "IF/THEN" portion of the statute.
Which brings us to February 9, 2017. As many of you will recall, after a brief shut down of the US government from midnight of February 8 to the early hours of February 9, Congress passed and the President signed  H.R.1892 - Bipartisan Budget Act of 2018.  
Thanks to consumer lobbying by AAJ and other disability advocacy groups, the new federal budget repealed the changes to Medicaid law in the 2013 budget as follows:



(b) Delay In Effective Date And Repeal Of Certain Bipartisan Budget Act Of 2013 Amendments.—

(1) REPEAL.—Effective as of September 30, 2017, subsection (b) of section 202 of the Bipartisan Budget Act of 2013 (Public Law 113–67; 127 Stat. 1177; 42 U.S.C. 1396a note) (including any amendments made by such subsection) is repealed and the provisions amended by such subsection shall be applied and administered as if such amendments had never been enacted.

(2) [Does not apply to subrogation]

(3) EFFECTIVE DATE; TREATMENT.—The repeal and amendment made by this subsection shall take effect as if enacted on September 30, 2017, and shall apply with respect to any open claims, including claims pending, generated, or filed, after such date. The amendments made by subsections (a) and (b) of section 202 of the Bipartisan Budget Act of 2013 (Public Law 113–67; 127 Stat. 1177; 42 U.S.C. 1396a note) that took effect on October 1, 2017, are null and void and section 1902(a)(25) of the Social Security Act (42 U.S.C. 1396a(a)(25)) shall be applied and administered as if such amendments had not taken effect on such date.

So where does this leave us?

Based upon the language of the Bipartisan Budget Act of 2018, the changes to the key language which vitiated Ahlborn and Wos in 2013 and went into effect on October 1, 2017, are now a nullity.  According to the newest federal law, the changes in 2013 were never put into effect on October 1, 2017, because they were repealed on September 30, 2017.
And because Section 202(b) of the Bipartisan Budget Act of 2013, did not take effect on October 1, 2017, there is no change to NCGS 108A-57, the Medicaid subrogation statute.
Which means that 108A-57's requirements to request a lien reduction hearing are still in effect. NCGS 108A-57requires:
(a2)      A medical assistance beneficiary may dispute the presumptions established in subsection (a1) of this section by applying to the court in which the medical assistance beneficiary's claim against the third party is pending, or if there is none, then to a court of competent jurisdiction, for a determination of the portion of the beneficiary's gross recovery that represents compensation for the Medicaid claim. An application under this subsection shall be filed with the court and served on the Department pursuant to the Rules of Civil Procedure no later than 30 days after the date that the settlement agreement is executed by all parties and, if required, approved by the court, or in cases in which judgment has been entered, no later than 30 days after the date of entry of judgment. The court shall hold an evidentiary hearing no sooner than 30 days after the date the action was filed. All of the following shall apply to the court's determination under this subsection:
So what is the deadline to file for 108A-57 hearings to reduce Medicaid's lien for cases settled from October 1, 2017 to February 9, 2018?
The way the federal changes were implemented on February 9, 2018 leaves a vacuum from October 1, 2017 until February 9, 2018 for all settlements where Medicaid claimed a lien on settlement proceeds.  Obviously, during that time period, a Plaintiff had no statutory mechanism to file for a Medicaid reduction hearing under NCGS 108A-57.  So there can be no 30 day time limit to file during those months.
So what happens to Plaintiff cases that settled (by release, minor settlement of Industrial Commission Order) from October 1, 2017 until February 9, 2018?
The only logical conclusion is that the 30 day time limit to file a motion for Medicaid lien determination for cases settled from October 1, 2017 through February 9, 2018,  begins on February 9, 2018 and runs 30 days until and including Friday March 9, 2018 (or Monday March 12, 2018 if you want to use the "weekend rule", but why risk it?).
This means that if you settled a case during that time, you MUST file,"by applying to the court in which the medical assistance beneficiary's claim against the third party is pending, or if there is none, then to a court of competent jurisdiction, for a determination of the portion of the beneficiary's gross recovery that represents compensation for the Medicaid claim. An application under this subsection shall be filed with the court and served on the Department pursuant to the Rules of Civil Procedure no later than 30 days after the date that the settlement agreement is executed by all parties and, if required, approved by the court, or in cases in which judgment has been entered, no later than 30 days after the date of entry of judgment."
Practically, this means you need to file a motion for determination if you have a case pending, and if you don't, you will need to file a Complaint in the underlying action and include a motion to determine Medicaid's lien. 
What if I had a case settle less than 30 days before October 1, 2017, but I didn't get a motion filed before October 1, 2017?
I think that the most conservative approach would be that you get whatever time you had left in your 30 day time limit added on beginning February 9, 2018.  So if 25 days had gone past from the settlement of your case in September of '17 when October 1 happened, you would get 5 more days to file, beginning February 9, 2018 and ending February 13 (or maybe 14th depending on how you count it).
What if I paid Medicaid 100% or 1/3 of the settlement from October 1, 2017 through February 9, 2018?
If you paid Medicaid during the "vacuum time" of October 1, 2017 through February 9, 2018, I think you have a 30 day window to request a hearing to have the lien payment evaluated by a court.  I would assume that if you convinced the Judge that your client did not need to pay the Medicaid lien 1005 of 1/3 of the settlement, that the Judge could order Medicaid to issue a refund for the overpayment.  Also keep in mind that Medicaid now has to pro-rate with unpaid medical providers with valid liens.
What if I paid Medicaid 100% or 1/3 of the settlement from October 1, 2017 through February 9, 2018 and I'm ok with the amount BUT I wasn't able to pay valid medical lien holders because Medicaid would no pro-rate under the revised statute in effect at that time?
This is a harder question.  Before October 1, 2017, you could tell Medicaid you had valid lien holders, prove that with copies of the liens, and reduce Medicaid's lien by the prorated amounts of the medical lien holders.  You didn't need a hearing to make Medicaid prorate.  It was by operation of law in all scenarios where you pay subrogation:.

NCGS 108A-57

(a5)      The medical assistance beneficiary or any attorney retained by the beneficiary shall, out of the proceeds obtained by or on behalf of the beneficiary by settlement with, judgment against, or otherwise from a third party by reason of injury or death, distribute to the Department the amount due pursuant to this section as follows:

(1)        If, upon the expiration of the time for filing an application pursuant subsection (a2) of this section, no application has been filed, then the amount presumed pursuant to subsection (a1) of this section, as prorated with the claims of all others having medical subrogation rights or medical liens against the amount received or recovered, shall be paid to the Department within 30 days of the beneficiary's receipt of the proceeds, in the absence of an agreement pursuant to subsection (a3) of this section.

(2)        If an application has been filed pursuant to subsection (a2) of this section and no agreement has been reached pursuant to subsection (a3) of this section, then the Department shall be paid as follows:

a.         If the beneficiary rebuts the presumption arising under subsection (a1) of this section, then the amount determined by the court pursuant to subsection (a2) of this section, as prorated with the claims of all others having medical subrogation rights or medical liens against the amount received or recovered, shall be paid to the Department within 30 days of the entry of the court's order.

b.         If the beneficiary fails to rebut the presumption arising under subsection (a1) of this section, then the amount presumed pursuant to subsection (a1) of this section, as prorated with the claims of all others having medical subrogation rights or medical liens against the amount received or recovered, shall be paid to the Department within 30 days of the entry of the court's order.

(3)        If an agreement has been reached pursuant to subsection (a3) of this section, then the agreed amount, as prorated with the claims of all others having medical subrogation rights or medical liens against the amount received or recovered, shall be paid to the Department within 30 days of the execution of the agreement by the medical assistance beneficiary and the Department.

I do not think the 30 day deadline to file a motion applies to this situation if you have already paid Medicaid.
I think you should only have to write a letter to HMS/Medicaid, show them what you paid, prove that there were valid liens when you overpaid Medicaid, and ask that Medicaid refund the portion of the proceeds which should have been paid to valid medical lien holders. I don't know if Medicaid would want to make that check payable to your client (I'm guessing they will want to do that), or to the medical providers.  Then it would be up to you to distribute the funds.
Practically, if you had the valid medical liens during this time, you need to notify your client of the changes in the law and that the client has the option of having you ask Medicaid to make a refund that will be paid toward their unpaid medical balances.
But wait, I paid Medicaid on some liens from October of 2017 until February of 2018.  I don't think those cases needed a lien reduction hearing. Do I HAVE to look back and see if any of those files had valid medical liens that should (had the law allowed at the time) have been prorated with Medicaid?
Do you HAVE to ask for a refund of the (now) overpayment to Medicaid when there were valid medical provider?  Probably so. 
Why?  You have a legal duty pursuant to NCGS 44- 49 and 50, and now an ethical duty, pursuant to 2017 Formal Ethics Opinion 4,  to honor valid medical provider liens, regardless of the client's desires.  When you combine your duty to pay a valid medical lien under NCGS 44-49 and 50 with the ethical duty imposed to honor valid legal liens, I think you have to go back and look at any Medicaid payments you made from October 1, 2017 until February 9, 2018.
In summary, this is all great news for Plaintiffs, but we have to watch the potential deadline issues!
Questions?  Feel free to email at [email protected]
Chris Nichols 1.800.906.5984

Last week was an exciting week at the Nichols Law Firm as I (Chris Nichols) assumed the presidency of the North Carolina Advocates for Justice.  NCAJ is one of the largest state trial lawyer's associations in the United States.

My law school covered the event.


Chris Nichols 1.800.906.5984

Highlights of the new Medicaid Subrogation lien statute after Wos v EMA Supreme Court Case

I'm a little late posting this new statute on my blog because I was so involved in getting the new Medicaid subrogation statute trimmed down and written in a way that it would be workable for trial lawyers.  These changes were the result of the US Supreme Court Ruling in Wos v EMA issued March 20, 2013.

The Governor signed the new bill incorporating the holding of Wos on July 18, 2013.  The bill is effective immediately.  You can view House Bill 982, in final mark-up version here:  House Bill 982 

Here are the things we KEPT in the old § 108A-57. Subrogation rights; withholding of information a misdemeanor:

  • Medicaid is still limited to a maximum of 100% of the lien OR One Third (1/3) of the gross settlement.
  • Medicaid still prorates within their 1/3 with unpaid medical providers asserting liens.
  • Payment by the lawyer of the 100% or 1/3 of the gross settelement is full and final payement of Medicaid's lien (but medical lien holders paid pro-rata still get are owed their balances pursuant to NCGS 44-49 and 50
Here are the NEW provisions that reflect the Supreme Court's determination that our previous Medicaid statute was in conflict with Federal law:
  • Medicaid recipients can challenge the 1/3 or 100% lien by filing a Petition with a court of competant jurisdiction for "a determination of the portion of the beneficiary's gross recovery that represents compensation for the Medicaid claim."
  • TIMING OF PETITION:  Those petitions must be filed within 30 days of all parties signing a settlement agreement OR court approval of the settlement OR a judgment being issued.
  • The Court will conduct an evidentiary hearing and may consider any factors it deems just and reasonable in determining the allocation of the settlement.
  • The burden of proof is on the petitioner to prove by "clear and convincing evidence" that Medicaid is demanding too large a portion of the settlement.

One other excellent part of the new statute says Medicaid can compromise the liens at any time:  

(a3) Notwithstanding the presumption arising pursuant to subsection (a1) of this section, the medical assistance beneficiary and the Department may reach an agreement on the portion of the recovery that represents compensation for the Medicaid claim. 

In the past, Medicaid took the position they could not negotiate their lien with recipients.  This new portion allows for that negotiation to occur at any time, even before a petition is filed.

Chris Nichols 1.800.906.5984

Useful link to Medicare and MSPRC billing and diagnostic codes for auditing conditional payment letters

I found this link with MSPRC's website and thought it might be helpful to some of you.  This link takes you to the PDF lists of all the Medicare diagnosis codes dating back to 2002.

You can download the pdf files and open them in Acrobat and then CTRL F search for the codes that show up on your conditional payment letters from Medicare.  This will help you sort out medical visits that have been "coded" for payment for non-related medical procedures and visits.
This makes it easier to find and eliminate appointments for pre-existing conditions.  You can also scan in a long conditional payment spread sheet, do a conversion to searchable text (OCR) and then use the search feature on that to find the billing codes.
Hope this is helpful to some of you.
Chris Nichols 1.800.906.5984

NC Senate Bill 33 and Loss of Liberty: How the NC GOP rolls back 235 years of independence and makes big PHARMA the new "King"

Two Hundred and Thirty-five years ago to the day, North Carolina was the first of the Colonies to authorize its delegates to declare independence from Great Britain.  

So how is this relevant to "tort reform" and the pending legislation called Senate Bill 33 in the North Carolina House?  Well, this law, proposed by Rep. Johnathan Rhyne (R- Lincolnton), takes away an essential ingredient of Liberty of the people of North Carolina-  The right to a jury trial.

Rep. Rhyne's bill says that when a citizen is hurt or killed by a negligent emergency room physician, or nurse, or hospital worker, that injured person has no right to sue for negligence.  Further, the bill says that when a citizen of North Carolina is injured or killed by a defective drug manufactured ANYWHERE in the world, that citizen can not sue the manufacturer if the drug has been "approved" by a state or federal agency.  Taking away the "right to redress" or "the right to sue" is the same as depriving someone the right to a jury trial.  If you can't sue, you can't get a jury.  The doors to the court house are closed to these people.

The Halifax resolves speciically address the right to trial by jury.  In the Resolves the authors talk about the King seizing "Ships belonging to America" which "are declared prizes of War" and that the colonies have been deprived the legal right to get these ships back or enter into a process of determining the legal rights to the ships:  "And ...the United Colonies and their sincere desire to be reconciled to the mother Country on Constitutional Principles, have procured no mitigation of the aforesaid Wrongs and usurpations and no hopes remain of obtaining redress by those Means alone which have been hitherto tried."

Rep. Rhyne's proposed legislation takes us back to the days of being subjugated to the King and the Crown.  Of course, one might make the distinction that under Rhyne's law, the State of North Carolina is not "profiting" from the people.  That is true, but Rhyne's law is even WORSE.

Under Rhyne's proposals, the State of North Carolina not only denies "obtaining redress" but does so to the financial advantage of international drug companies and for-profit hospitals and corporate physician groups.

This law is a glaring example of "Big Government" taking fundamental liberties of THE PEOPLE and redistributing the spoils of war to anti-liberty, big monied cronies.

Thomas Jefferson, the author of the Declaration of Independence and the third President of the United States, said, "I consider trial by jury as the only anchor ever yet imagined by man, by which a government can be held to the principles of its constitution."

Senate Bill 33 takes away the trial by jury of people injured by negligent doctors and also those hurt or killed by defective drug products. These people are completely deprived of their liberty to hold bad actors accountable for their wrongs.

Why is the NC GOP rolling back our rights to pre-independence days?

Why did certain colonists remain loyal to the King? Scholars say one unifying characteristics of Loyalists to the Crown during the Revolution was this:  They had a long-standing sentimental attachment to Britain, often with business ties.  Also known as MONEY. 

How much did Rep. Jonathan Rhyne take from Big PHARMA and Medical Lobbyists?

PLEASE: preserve your liberty and rights. Call Anyone on this list and tell them to vote NO to SB33:

The below is from:


Excerpted from "Historical Miscellanea: An Early History of North Carolina," North Carolina Manual, 1991-1992, published biennially by the NC Department of the Secretary of State.

Halifax Resolves

North Carolina, on April 12, 1776, authorized her delegates to the Continental Congress to vote for independence. This was the first official action by a colony calling for independence. The 83 delegates present in Halifax at the Fourth Provincial Congress unanimously adopted the Halifax Resolves, which read as follows:

The Select Committee taking into Consideration the usurpations and violences attempted and committed by the King and Parliament of Britain against America, and the further Measures to be taken for frustrating the same, and for the better defence of this province reported as follows, to wit,

It appears to your Committee that pursuant to the Plan concerted by the British Ministry for subjugating America, the King and Parliament of Great Britain have usurped a Power over the Persons and Properties of the People unlimited and uncontrouled and disregarding their humble Petitions for Peace, Liberty and safety, have made divers Legislative Acts, denouncing War Famine and every Species of Calamity daily employed in destroying the People and committing the most horrid devastations on the Country. That Governors in different Colonies have declared Protection to Slaves who should imbrue their Hands in the Blood of their Masters. That the Ships belonging to America are declared prizes of War and many of them have been violently seized and confiscated in consequence of which multitudes of the people have been destroyed or from easy Circumstances reduced to the most Lamentable distress.

And whereas the moderation hitherto manifested by the United Colonies and their sincere desire to be reconciled to the mother Country on Constitutional Principles, have procured no mitigation of the aforesaid Wrongs and usurpations and no hopes remain of obtaining redress by those Means alone which have been hitherto tried, Your Committee are of Opinion that the house should enter into the following Resolve, to wit

Resolved that the delegates for this Colony in the Continental Congress be impowered to concur with the other delegates of the other Colonies in declaring Independency, and forming foreign Alliances, resolving to this Colony the Sole, and Exclusive right of forming a Constitution and Laws for this Colony, and of appointing delegates from time to time (under the direction of a general Representation thereof to meet the delegates of the other Colonies for such purposes as shall be hereafter pointed out.

Hooper, HewesBW, PennThe Halifax Resolves were important not only because they were the first official action calling for independence, but also because they were not unilateral recommendations. They were instead recommendations directed to all the colonies and their delegates assembled at the Continental Congress in Philadelphia. Virginia followed with her own recommendations soon after the adoption of the Halifax Resolution, and eventually on July 4, the final draft of the Declaration of Independence was signed. William Hooper, Joseph Hewes, and John Penn were the delegates from North Carolina who signed the Declaration of Independence. 1.800.906.5984

Why conservatives should hate NC "tort reform" in Senate Bill 33: A Tea Party primer

The North Carolina Legislature is considering passing a law which was written, largely, by multinational pharmaceutical corporations.  The Bill would make NC the worst state in the nation in terms of protecting its citizens from wrongdoers.

The legislators who have bought into the corporate lobbyist's money agenda in Senate Bill 33 would gladly sacrifice the liberty of the citizens at the throne of the new "King": international pharmaceutical corporations and insurance companies.


This BOLD parts are from the "core values"  listed for the "Tea Party Patriots" and serve as an example of Tea Party values.

Core Values of the Tea Party

  • Fiscal Responsibility
  • Constitutionally Limited Government
  • Free Markets

Fiscal Responsibility: Fiscal Responsibility by government honors and respects the freedom of the individual to spend the money that is the fruit of their own labor. A constitutionally limited government, designed to protect the blessings of liberty, must be fiscally responsible or it must subject its citizenry to high levels of taxation that unjustly restrict the liberty our Constitution was designed to protect. Such runaway deficit spending as we now see in Washington D.C. compels us to take action as the increasing national debt is a grave threat to our national sovereignty and the personal and economic liberty of future generations.

Why "tort reform" proposed by the NC legislature is contrary to these values:

Fiscal responsibility emanates from the individual and is embodied by the government which derives its existence from the will of the people.  "Tort reform" in the form of arbitrary caps on damages and immunity from certain forms of negligence by certain "classes" of individual (for example, immunity for negligent emergency room doctors) shifts the natural consequences of actions from the wrong doer to the government.  Individuals who do harm should be held personally responsible for the full extent of their harm and not shift financial responsibility to government entitlement programs.

"Tort reform" in the form of NC Senate Bill 33, simply redistributes the cost of individual harm from the wrong doer to the tax payer.  More specifically, by providing immunity to certain types of negligent physicians, when those physicians cause great harm to individuals, the harmed individual will eventually take tax dollars in the form of entitlement programs such as medicare, social security disability, and medicaid.  The harmed citizen will be a drain on our government and our taxes. 

Fiscal responsibility demands that the individual causing harm rely on their own resources and insurance converge in a robust free market- not the government to use tax dollars to bail out the negligent.

"Tort reform" is not fiscally responsible.

Constitutionally Limited Government: We, the members of The Tea Party Patriots, are inspired by our founding documents and regard the Constitution of the United States to be the supreme law of the land. We believe that it is possible to know the original intent of the government our founders set forth, and stand in support of that intent. Like the founders, we support states' rights for those powers not expressly stated in the Constitution. As the government is of the people, by the people and for the people, in all other matters we support the personal liberty of the individual, within the rule of law.

Why "tort reform" proposed by the NC legislature is contrary to these values:

There is no question that our founders believed in, and enshrined with the Constitution, the unalienable right to a jury trial for civil suits, which our Founding Fathers protected through the 7th Amendment to the Constitution after centuries of recognition in British law and Judeo-Christian writings.

Historically, the right to a trial by jury was the basis for "The Declaration of the Causes and Necessity of Taking Up Arms," which was a document issued to explain why the colonists had initiated armed conflict against Great Britain, and was written by John Dickinson of Virginia based on a draft by Thomas Jefferson.

Dickinson wrote in the Declaration, "Parliament was influenced to adopt the pernicious project, and assuming a new power over them, have in the course of eleven years, given such decisive specimens of the spirit and consequences attending this power, as to leave no doubt concerning the effects of acquiescence under it. They have undertaken to give and grant our money without our consent, though we have ever exercised an exclusive right to dispose of our own property; statutes have been passed for extending the jurisdiction of courts of admiralty and vice-admiralty beyond their ancient limits; for depriving us of the accustomed and inestimable privilege of trial by jury, in cases affecting both life and property..." -- Declaration of the Causes and Necessity of Taking Up Arms, enacted July 6, 1775 by the Second Continental Congress

The "tort reform" proposed by the North Carolina legislature fundamentally deprives citizens of the right to a trial by jury in several ways.  First, it grants blanket immunity from suit to certain classes of citizens, namely, emergency physicians and emergency room personnel, and corporate producers of pharmaceuticals (drugs).  The proposals say, quite plainly, that a citizen injured or killed by any of these privileged groups can not sue and have a jury determine the fairness of their claim.

The Constitution clearly guarantees the right to a trial by jury to all citizens in the 7th Amendment.

In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any Court of the United States, than according to the rules of the common law.

John Adams wrote:

As the Constitution requires that the popular branch of the legislature should have an absolute check, so as to put a peremptory negative upon every act of the government, it requires that the common people, should have as complete a control, as decisive a negative, in every judgment of a court of judicature.

He also wrote, "Representative government and trial by jury are the heart and lungs of liberty.  Without them we have no other fortification against being ridden like horses, fleeced like sheep, worked like cattle and fed and clothed like swine and hounds."

Thomas Jefferson, the author of the Declaration of Independence and the third President of the United States, said, "I consider trial by jury as the only anchor ever yet imagined by man, by which a government can be held to the principles of its constitution."

James Madison, the author of the Constitution and the fourth President of the United States, said, "Trial by jury in civil cases is as essential to secure the liberty of the people as any one of the pre-existent rights of nature."

"Tort reform" as proposed in SB33 and other bills curtails the natural right to trial by jury and should be opposed.

Free Markets: A free market is the economic consequence of personal liberty. The founders believed that personal and economic freedom were indivisible, as do we. Our current government's interference distorts the free market and inhibits the pursuit of individual and economic liberty. Therefore, we support a return to the free market principles on which this nation was founded and oppose government intervention into the operations of private business.

Why "tort reform" proposed by the NC legislature is contrary to these values:

A free market economy rewards entrepreneurs for their actions that benefit society.  The manufacturer who builds a superior product wins in the marketplace, and few would question that manufacturer's right to reap the rewards of its own ingenuity.  This is largely because the manufacturer has, in the effort to succeed, shouldered a risk of failure.  It is the marketplace, comprised of ordinary people, rather than the government, which determines whether the manufacturer wins or loses.

If the efficient production of material wealth is all that concerns us, then the marketplace needs no other rewards or penalties.  Most will agree, however, that manufacturers should be encouraged to create safe as well as efficient products, for the number of deaths and injuries annually caused by defective products is astronomical.  According to the 2003 Annual Report of the U.S. Consumer Product Safety Commission, there were 4,509 deaths and 13,690,526 injuries associated with just 15 categories of consumer products during that one-year reporting period.  Deaths and injuries caused annually by toxic pharmaceutical products also rival these numbers.

By making manufacturers liable to the people they have injured, the once-revered common law tort system creates an incentive for the manufacturer to build a safer product.  Those who advocate more government might suggest that safety can best be engineered from above, by governmental regulation, but true advocates of a free market will agree that it is better to permit the manufacturer to determine how to make its own product safe for consumer use, rather than some government bureaucrat.  In exchange for the right to determine the most efficient way to make its products safe, however, a manufacturer must be subject to suit for failure to perform this undertaking.

"Tort reform" as proposed by the NC legislature in SB33 relieves manufacturers of defective products and providers of negligent services from the natural free market consequences of their actions.  This creates imbalance in the market and also encourages an increase in governmental regulations.

The free market demands that consumers have a right to recoup their losses through the fundamental right of trial by jury.  This provides natural incentives for "good behavior" in the marketplace. 1.800.906.5984

Will NC be the worst state for manufacturers? The unintended consequence of HB 542: Destroys insurance and business subrogation for losses from product fauilure

I am attaching below the letter I sent to three members of the North Carolina House Select Committee on Tort Reform.

I believe that House Bill 542 may "look" good for business but have the unintended consequence of making North Carolina the WORST place for manufacturing in the entire United States.  I've inserted a few comments below in [BOLD]  brackets.

Rep. Stam, Rep. Weiss, and Rep. Murray:

I am a lawyer, like each of you, and I would like to call to your attention what I think is a major unintended consequence of HB 542.  I called each of your offices today to discuss this issue.

HB 542 destroys the right of a NC manufacturer and their insurance company to subrogate on catastrophic losses caused by defective products.  This hurts manufacturing, business, and insurance interests in North Carolina.

Please read the below example:

Products Liability Immunity Destroys Business and Insurance Subrogation:  HB 542 gives immunity from suit to any company that produces a faulty product that has been "approved for sale" by any State of Federal regulatory agency.  This bar would apply to insurance subrogation claims against the original tortfeasor and therefore bars insurance companies and the self-insured from recouping losses caused by faulty products.

EXAMPLE.  Power Plant Explosion:  A North Carolina power company buys a defective industrial boiler from a Chinese (or any) manufacturing company. This product is "approved" by several state and federal agencies as required by law."  [Does this sound like the Apex Chemical explosion?]

That boiler explodes and spreads toxic ash over a 3 mile radius. The environment is polluted, people are made sick, and the business site is shut down. The NC business itself suffers a $300 Million dollar business and property damage loss and is sued by the State and citizens for the toxic ash injuries.  The insurer for the power company  (or self-insured company itself) must pay for the business loss, claims of injuries and property loss, but would be prohibited by HB542 from seeking a recovery from the negligent Chinese manufacturer.  The State of North Carolina would be prohibited from seeking compensation for the loss to the environment and the toxic clean up costs. This will increase the cost of insurance for business and the State and possibly force insurers to stop insuring for loss from product defect.

HB542 uses the following definitions:  [See page 8 of HB542] " (1) "Claimant" means a person or other entity asserting a claim"

"Product liability action" includes any action brought for or on account of personal injury, death or property damage caused by or resulting from the manufacture, construction, design, formulation, development of standards, preparation, processing, assembly, testing, listing, certifying, warning, instructing, marketing, selling, advertising, packaging, or labeling of any product."  (Emphasis added)

"No manufacturer or seller shall be held liable in any product liability action if any one of the following apply:"

Under this very simple language above, businesses that suffer catastrophic losses due to product defects will NOT be able to recoup those loses.

Moreover, what will be the effect on Business Insurance Policies?  A standard loss policy would have language like the following:

 "If we pay a claim under your policy, we will take over your right to recover that amount from any other person or organization. You agree to cooperate with us and not do anything that will interfere with our chances of recovery".

Insurers would be subrogated to the right of the North Carolina company.  Because subrogation is "the substitution of one person in the place of another with reference to a lawful claim, demand, or right, so that he who is substituted succeeds to the rights of the other in relation to the debt or claim, and its rights, remedies, or securities," the North Carolina Company would have no right to recover under HB542 and thus the insurance company would be subrogated to nothing.

North Carolina will be the ONLY state in the nation with such a law.

This raises many difficult questions:

1)  Will insurance companies issue large commercial policies to North Carolina manufacturers know there will be no right to subrogate in failed products cases?  Can businesses operate without this insurance?

2)  Will North Carolina manufacturers receive insurance rate increases due to the higher cost risk for North Carolina claims?

3)  Will manufacturers avoid locating in North Carolina because they will not be protected from defective products they purchase for their business?

4)  Will insurance products for consumers be impacted by the lack of subrogation for faulty manufacturing?  Will home owner insurance rates increase due to the number of fires caused by defective products where there will be no subrogatable interest for the insurance company?

5)  Why would a manufacturer choose North Carolina over 49 other states  knowing that it had no protections from faulty products within its own facility?

I ask that you stop HB542 before it further erodes North Carolina's business economy.

Chris Nichols



A non-hypotehtical Example of Products Liability Subrogation In Insurance

Here is an excellent example of how subrogation works in the context of product liability claims.  This is a blog post from Cozen O'Conner, a national law firm that helps insurance companies recover funds from manufacturers of defective produts when those products cause damage which is insured.  Here is a link to their full blog post. Lasko Recalls 4.8 Million Box Fans

The case involved a massive barn fire at a breeding farm in Hondo, New Mexico. Six world class race horse breeding stallions were killed in the fire and the barn itself was totaled. Cozen O’Connor represented over sixty sophisticated horsemen clients who had ownership interests in the stallions, and their insurers. The insurers for the horses and the barn went to great lengths to preserve the fire scene, and as a direct result of their diligence the experts were able to examine each electrical device in the barn and identify the fatal flaw in the Lasko fan motor.

On March 24th (long after the fire) the Consumer Product Safety Commission announced a voluntary recall of 4.8 million Lasko box fans. The recall notice reports “an electrical failure in the fan’s motor poses a fire hazard to consumers.” The CPSC cites a “barn fire resulting in extensive property damage” as a basis for the recall.

If this fire had occurred in North Carolina under House Bill 542, the lawyers at Cozen O'Conner would have been barred from seeking recovery from Lasko.  The insurer would have paid out millions and not been reimbursed by the negligent manufacturer of the fan.  And who would absorb the cost of the unreimbursed expenses?  Anyone who buys insurance.


Hopefully this will make a difference.  This bill is not just about people injured by defective products, but also business.

This is an actual photo of the Apex, NC plant explosion at a chemical storage facility.

RLK_EQ_Fire 1.800.906.5984