ILNews

Justices split on discounted medical expenses

Back to TopCommentsE-mailPrintBookmark and Share

In a ruling about whether insurance discounts can be used to determine reasonable medical expenses, two Indiana Supreme Court justices say their colleagues have created a new rule that is "incomplete, misleading, and unfair" and will add "layers of complexity, time, and expense to personal injury litigation, impairing the efficient administration of justice."

In its 3-2 decision Wednesday afternoon in Brandon Stanley v. Danny Walker, No. 41S01-0810-CV-539, the majority held that those discounted benefits can be used to determine what's reasonable and actually paid by plaintiffs seeking damages for their injuries. That issue gives the court a chance to catch up with the modern managed health-care world.

Justice Frank Sullivan authored the opinion in the Johnson County case regarding a 2004 vehicle accident in which Danny Walker sustained injuries and ultimately received treatment from 11 different medical providers. He filed a negligence complaint against Brandon Stanley to recover incurred medical expenses, lost wages, and pain and suffering; Stanley admitted negligence before trial and the case proceeded on the damages issue.

The injured plaintiff, Walker, introduced medical bills totaling the original billed amount of $11,570; however he didn't show the $4,750 that was ultimately discounted by an agreement between the medical service providers and Walker's health insurer bringing the medical costs for which he and the insurance company were responsible to $6,820.

Disputing the originally billed amount because of the discounts, Stanley asked the trial court to admit the discounted medical bills totaling $6,820 into evidence, but Walker argued that violated Indiana's collateral source statute, Indiana Code § 34-44-1-2, which prohibits the introduction of "insurance benefits" evidence in personal injury cases. The court agreed and didn't allow the evidence, and the Court of Appeals affirmed in a decision last year that followed a $70,000 general verdict in Walker's favor.

In its ruling, the Indiana Supreme Court majority affirmed the judgment but remanded for the trial court to reduce the damage award by $4,750. The court noted that if Walker will not accept the reduction, he is free to retry the issue of damages before another jury.

Justice Sullivan adopted the approach in the Ohio Supreme Court decision of Robinson v. Bates, 857 N.E.2d 1195, 1200 (Ohio 2006), which held that a jury may determine the reasonable value of medical services is the amount originally billed, the amount accepted as payment, or some amount in between. That state's common law "collateral source rule" wasn't applicable to discounted bills because they weren't payments from a third party to the plaintiff, the court decided.

"We find this to be the fairest approach; to do otherwise would create separate categories of plaintiffs based on the method used to finance medical expenses," Justice Sullivan wrote, noting that parties can also introduce evidence and witnesses to show billed and paid amounts don't represent the reasonable value.

But Justices Brent Dickson and Robert Rucker dissented, saying the majority's holding contravenes the express requirements of Indiana's collateral source statute and is an "unfair and undesirable judicial policy."

With this rule, juries will receive a "distorted, misleading, and incomplete picture unless they are also able to consider the pecuniary value of all the benefits conferred upon health care providers in their symbiotic exchange with medical insurers," Justice Dickson wrote in his 9-page dissent. "... A new level of discovery will be needed to determine and quantify the value to providers. Plaintiffs will be required to expend considerable resources to marshal and present such evidence, thereby prolonging trials. New appellate issues will result.  ...

"This all seems very unnecessary," he wrote.

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Indiana State Bar Association

Indianapolis Bar Association

Evansville Bar Association

Allen County Bar Association

Indiana Lawyer on Facebook

facebook
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. Hail to our Constitutional Law Expert in the Executive Office! “What you’re not paying attention to is the fact that I just took an action to change the law,” Obama said.

  2. What is this, the Ind Supreme Court thinking that there is a separation of powers and limited enumerated powers as delegated by a dusty old document? Such eighteen century thinking, so rare and unwanted by the elites in this modern age. Dictate to us, dictate over us, the massess are chanting! George Soros agrees. Time to change with times Ind Supreme Court, says all President Snows. Rule by executive decree is the new black.

  3. I made the same argument before a commission of the Indiana Supreme Court and then to the fedeal district and federal appellate courts. Fell flat. So very glad to read that some judges still beleive that evidentiary foundations matter.

  4. KUDOS to the Indiana Supreme Court for realizing that some bureacracies need to go to the stake. Recall what RWR said: "No government ever voluntarily reduces itself in size. Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we'll ever see on this earth!" NOW ... what next to this rare and inspiring chopping block? Well, the Commission on Gender and Race (but not religion!?!) is way overdue. And some other Board's could be cut with a positive for State and the reputation of the Indiana judiciary.

  5. During a visit where an informant with police wears audio and video, does the video necessary have to show hand to hand transaction of money and narcotics?

ADVERTISEMENT