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Justices split on discounted medical expenses

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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.

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  1. The is an unsigned editorial masquerading as a news story. Almost everyone quoted was biased in favor of letting all illegal immigrants remain in the U.S. (Ignoring that Obama deported 3.5 million in 8 years). For some reason Obama enforcing part of the immigration laws was O.K. but Trump enforcing additional parts is terrible. I have listed to press conferences and explanations of the Homeland Security memos and I gather from them that less than 1 million will be targeted for deportation, the "dreamers" will be left alone and illegals arriving in the last two years -- especially those arriving very recently -- will be subject to deportation but after the criminals. This will not substantially affect the GDP negatively, especially as it will take place over a number of years. I personally think this is a rational approach to the illegal immigration problem. It may cause Congress to finally pass new immigration laws rationalizing the whole immigration situation.

  2. Mr. Straw, I hope you prevail in the fight. Please show us fellow American's that there is a way to fight the corrupted justice system and make them an example that you and others will not be treated unfairly. I hope you the best and good luck....

  3. @ President Snow - Nah, why try to fix something that ain't broken??? You do make an excellent point. I am sure some Mickey or Minnie Mouse will take Ruckers seat, I wonder how his retirement planning is coming along???

  4. Can someone please explain why Judge Barnes, Judge Mathias and Chief Judge Vaidik thought it was OK to re weigh the evidence blatantly knowing that by doing so was against the rules and went ahead and voted in favor of the father? I would love to ask them WHY??? I would also like to ask the three Supreme Justices why they thought it was OK too.

  5. How nice, on the day of my car accident on the way to work at the Indiana Supreme Court. Unlike the others, I did not steal any money or do ANYTHING unethical whatsoever. I am suing the Indiana Supreme Court and appealed the failure of the district court in SDIN to protect me. I am suing the federal judge because she failed to protect me and her abandonment of jurisdiction leaves her open to lawsuits because she stripped herself of immunity. I am a candidate for Indiana Supreme Court justice, and they imposed just enough sanction so that I am made ineligible. I am asking the 7th Circuit to remove all of them and appoint me as the new Chief Justice of Indiana. That's what they get for dishonoring my sacrifice and and violating the ADA in about 50 different ways.

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