Short Answer

In North Carolina, “medical payments” (often called “MedPay”) is typically a separate, no-fault coverage that can pay reasonable medical bills up to the MedPay limit without waiting for the bodily injury (BI) claim to settle. Using MedPay usually does not automatically waive or release the separate BI claim, but you must be careful about the paperwork and any release language. MedPay payments can also affect how a final case resolution is handled if the insurer treats the payment as an “advance payment” that must be credited against any later judgment.

Understanding the Problem

In North Carolina, if you are pursuing a bodily injury claim against the at-fault driver’s insurance and you also want to use medical payments benefits, the key question is whether you can open and process MedPay without harming the separate BI claim or settlement, especially where the claim is already pending and you are trying to confirm what coverages exist.

Apply the Law

MedPay is generally designed to pay medical expenses promptly, regardless of who caused the crash, up to the policy’s MedPay limit and subject to the policy terms. A BI claim is different: it is the liability claim against the at-fault party for damages caused by negligence (medical bills, pain and suffering, lost wages, and more). Because these are different coverages with different purposes, MedPay can often be handled as its own “bucket” of benefits while the BI claim continues.

That said, the way MedPay affects a later resolution depends on (1) whose policy provides the MedPay (your client’s policy versus the at-fault driver’s policy), (2) what the insurer requires to open and pay MedPay, and (3) whether any payment is treated as an “advance payment” that must be credited against a later judgment. North Carolina also has specific rules about how advance payments are credited in litigation and how releases must be drafted to avoid unintentionally settling more than intended.

Key Requirements

• Separate coverage determination: Confirm whether MedPay exists on the relevant policy and whether your client qualifies as an “insured” or covered person for MedPay under that policy’s definitions.
• Covered expenses and causation: MedPay typically pays reasonable and necessary medical expenses that are related to the accident, up to the MedPay limit, and subject to policy conditions.
• Proper claim opening and documentation: The insurer usually requires a MedPay claim to be opened separately (even if the BI claim is already open) and will request itemized bills, proof of payment or balances, and medical records tying treatment to the accident.
• No unintended release: Any MedPay paperwork, settlement receipt, or check endorsement should be reviewed to ensure it does not include broad release language that could be argued to settle the BI claim.
• Credit/offset risk if treated as an advance payment: If the payment is characterized as an advance or partial payment made “by or on behalf of” the party you are suing, North Carolina law allows a credit against any later judgment (handled by motion and hearing in the case).
• Subrogation/liens from other payers: Even if MedPay itself is no-fault, other payers (like certain government plans) may have reimbursement rights that affect settlement distribution and timing.

What the Statutes Say

• N.C. Gen. Stat. § 1-540.3 (Advance payments) - Allows advance/partial payments for bodily injury without admitting liability, and provides a procedure to credit qualifying payments against any later judgment.
• N.C. Gen. Stat. § 1-540.2 (Property damage settlement not a BI release) - Explains that settling one part of a motor-vehicle claim does not automatically release other claims unless the written settlement says so.
• N.C. Gen. Stat. § 135-48.37 (State Health Plan subrogation) - Gives the State Health Plan subrogation and lien rights for medical expenses it paid that relate to a third-party injury.
• N.C. Gen. Stat. § 108A-57 (Medicaid subrogation) - Establishes Medicaid’s subrogation rights and includes timing rules (including a 30-day window to seek a court determination in certain disputes after settlement).

Analysis

Apply the Rule to the Facts: Because you are already handling a BI claim under another party’s policy and you are verifying available coverages, the first practical step is to confirm whether MedPay exists on that policy and whether your client is a covered person for MedPay under that policy’s terms. If MedPay is available, you can usually pursue it as a separate benefit stream to pay medical bills while the BI claim continues, as long as you avoid signing or accepting anything that could be read as a full settlement or release of the BI claim. You should also clarify in writing whether any MedPay payment is being treated as an “advance payment” connected to the liability claim, because that can matter later if the case ends in a judgment.

Process & Timing

1. Who files: The injured person (often through counsel). Where: With the insurance carrier’s claims department handling the applicable policy. What: A written request to open MedPay, plus the carrier’s MedPay application/authorization forms (if any), and supporting medical billing/records. When: As soon as you confirm MedPay exists and you have enough documentation to show accident-related treatment.
2. Document submission and follow-up: Provide itemized bills (CPT/HCPCS detail if available), dates of service, provider information, and proof of what remains owed versus what has been paid. Carriers commonly request medical authorizations and records to confirm the treatment relates to the accident and falls within the policy’s MedPay terms.
3. Payment and coordination with BI: Ask the adjuster to confirm in writing that MedPay is being processed under the MedPay coverage and that payment is not conditioned on settling the BI claim. If the carrier issues checks to providers, confirm how they will handle balances, write-offs, and any provider billing disputes.

Exceptions & Pitfalls

• Release language on “MedPay” paperwork: A MedPay check, receipt, or form should not include a broad release of “all claims.” If it does, negotiate corrected language before signing or endorsing.
• Advance payment credit issues: If the insurer later argues MedPay was an advance payment made “by or on behalf of” the defendant, it may seek a credit against any judgment under N.C. Gen. Stat. § 1-540.3. Clarify the payment’s characterization early and keep clean documentation showing it was paid under MedPay coverage.
• Policy conditions and documentation gaps: MedPay is contractual. Missing itemization, missing records tying treatment to the crash, or incomplete authorizations can slow or derail payment.
• Coordination with other payers: Health plans and government programs may assert reimbursement rights that affect the net settlement and the timing of disbursement. Identify these early so the BI settlement is not delayed at the end.
• Assuming the at-fault policy’s MedPay applies: Many times, MedPay is on the injured person’s own auto policy (or a household policy), not the at-fault driver’s liability policy. Confirm the correct policy and covered-person status before investing time in documentation.

Conclusion

In North Carolina, MedPay benefits are usually separate from a bodily injury claim and can often be pursued to pay accident-related medical bills without waiting for the BI settlement. The main risks are paperwork that accidentally releases the BI claim and later disputes about whether the payment should be credited as an advance payment if the case goes to judgment. The next step is to request written confirmation of MedPay availability and open a MedPay claim with the carrier by submitting itemized bills and accident-related medical documentation.

Talk to a Personal Injury Attorney

If you’re dealing with a bodily injury claim and trying to use MedPay at the same time, an attorney can help you confirm which policy applies, submit the right documentation, and avoid release or credit issues that can reduce the value of the separate BI claim. Reach out today.

Disclaimer: This article provides general information about North Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney-client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed North Carolina attorney.