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Sykes v. Vixamar

Court of Appeals of North Carolina

June 18, 2019

DERRICK SYKES, Plaintiff,
v.
EMMANUEL VIXAMAR and PROGRESSIVE UNIVERSAL INSURANCE COMPANY, Defendant-Intervenor, Defendants.

          Heard in the Court of Appeals 30 January 2019.

          Appeal by defendant from judgment entered 5 February 2018 by Judge Walter H. Godwin, Jr. in Nash County No. 16-CVS-744 Superior Court.

          Ricci Law Firm, P.A., by Meredith S. Hinton, for plaintiff-appellee.

          Teague, Rotenstreich, Stanaland, Fox & Holt, PLLC, by Camilla F. DeBoard and Kara V. Bordman, for defendant-appellant.

          Christopher R. Nichols; Kluttz, Reamer, Hayes, Adkins & Carter, by Michael S. Adkins; and The Law Offices of James Scott Farrin, by J. Gabe Talton, for amicus curiae North Carolina Advocates for Justice.

          DIETZ, JUDGE.

         Derrick Sykes was injured in a car accident and sought care at Nash Hospital. After learning that another driver likely was liable for Sykes's injuries, the hospital made a choice that is the heart of this appeal: it chose not to bill Sykes's health insurer for his medical care and instead to rely on a statutory medical lien on any payments Sykes received from the other driver.

         That choice matters because there is a statute prohibiting hospitals from billing patients for charges that would have been covered by health insurance if the hospital had timely submitted a claim. See N.C. Gen. Stat. § 131E-91(c). The issue in this case is whether Section 131E-91(c) prevents a hospital from choosing to rely solely on a medical lien on a future liability judgment, rather than also billing the patient's health insurer.

         As explained below, we hold that hospitals may make this choice without abandoning their medical liens. First, the text of the applicable statutes permits it. Second, a contrary interpretation would frustrate the purpose of Section 131E-91(c) by forcing patients to pay unnecessary deductibles and other charges upfront-even though the hospital would have been content to wait and recover those costs from a court judgment or settlement later.

         Accordingly, the trial court did not err by permitting Sykes to introduce evidence of the hospital's lien and underlying medical charges, and by rejecting counter-evidence seeking to show that Section 131E-91(c) barred the hospital from billing Sykes directly for those charges.

         Facts and Procedural History

         In September 2015, Plaintiff Derrick Sykes and Defendant Emmanuel Vixamar were involved in a motor vehicle accident when Vixamar failed to stop at a red light and collided with the rear of Sykes's vehicle. Following the accident, Sykes sought medical treatment at Nash Hospital. The charges for Sykes's treatment at the hospital totaled $6, 463.

         Two months later, the hospital sent Sykes a letter and accompanying notice of medical lien informing Sykes that the hospital asserted a lien on any liability recovery, medical payments, or uninsured/underinsured motorist coverage. Sykes had health insurance through Blue Cross Blue Shield but the hospital did not submit the charges to Sykes's health insurer and did not seek to collect the charges directly from Sykes.

         On 20 May 2016, Sykes filed this negligence action against Vixamar. Progressive Universal Insurance Company, who insured the owner of the vehicle that Vixamar was driving, later intervened as a defendant.

         During discovery, the parties deposed Demetrius Hagins, a billing clerk at Nash Hospital. Progressive asked Hagins a series of questions concerning the hospital's decision to rely on the medical lien to recover for its medical services, rather than billing Sykes's health insurer:

Q. With that lien, it means you will obtain funds based on the outcome of any lawsuit that he has or settlement, correct?
A. Correct.
. . .
Q. Okay. In the event that his recovery is less than the amount you have in this lien, which is $6, 463, what happens to the remainder of the balance?
A. If it's less, we accept a pro rata share at settlement, and ...

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