Patchett v. Lee – Establishing the Reasonable Value of Medical Care

In personal injury law, establishing the reasonable value of medical care is an important factor in determining how much will actually be paid. seat buckleIn the recent Indiana Supreme Court case of Patchett v. Lee, the court was asked to determine whether discounted reimbursements negotiated between a plaintiff’s medical provider and their private health insurer could be considered in court, as long as the actual insurance isn’t noted. The court had previously held in 2009 that such information was worthy and relevant to measure the reasonable value of the medical care the plaintiff received. The specific issue in Patchett was whether this thinking was equally applicable to discounted reimbursements from government-backed insurers. The court held that it was.

According to court records, the defendant didn’t deny she negligently drove her vehicle into oncoming traffic one day four years ago. In so doing, she struck the plaintiff’s vehicle, causing injuries to the plaintiff that necessitated medical treatment. The defendant admitted she was responsible for the collision and generally agreed the plaintiff received medical treatment that was necessary for her crash-related injuries.

That meant the only issue here was the reasonable value of the plaintiff’s medical care. The ensuing trial was solely a matter of damages.

Both sides agreed the state’s evidence rules allowed the plaintiff to admit her accident-related bills, totaling nearly $88,000, to be used as evidence those charges were reasonable. However, the two sides disagreed about whether the defendant could produce evidence that the plaintiff’s doctors had accepted reduced amounts as payment in full. Specifically, the plaintiff was enrolled in the state’s government-sponsored health care program. Her medical providers, as participants in that program, accepted the prevailing reimbursement rates of just $12,000 as the full satisfaction of those charges. That was an 86 percent discount from the total amount billed.

The plaintiff moved to prevent jurors from hearing that the rates had been reduced. The defense objected, but the trial court granted the plaintiff’s motion. The judge ruled the reduced payments were subject to the collateral source statute and not permitted under the 2009 ruling. Also, the judge ruled the lower rates would only serve to confuse jurors. The trial court certified the question to the appellate court, which affirmed. However, the state supreme court vacated the appellate court’s opinion and reversed.

The justices explained that “reasonable value” is something that can be proved in a number of different ways. One of those is to show the amounts billed for health care services. In fact, medical bills can be prima facie evidence that such charges are reasonable.

The 2009 decision by the court, Stanley v. Walker, held that another metric of value is the amount actually paid in full for those services. Previously, the common-law collateral source rule prohibited evidence of compensation that plaintiffs received from collateral (i.e., non-party) sources. That was later abrogated, allowing collateral source payment information to be admitted, except in certain circumstances. The Stanley case resulted in a finding that the collateral source rule doesn’t prohibit evidence of discounted amounts in order to determine what the reasonable amount was for a discounted service.

The latest decision will mean that, at least in Indiana, judges overseeing catastrophic injury lawsuits may be abusing their discretion if they exclude evidence of reduced government reimbursements for medical services.

The good news for injured North Carolina residents is that evidence of a plaintiff’s receipt of benefits for his or her injury or disability from collateral sources is generally not admissible, as held in the 1987 appellate court case of White v. Lowery.

Contact the Carolina injury lawyers at the Lee Law Offices by calling 800-887-1965.

Additional Resources:

Patchett v. Lee, Oct. 21, 2016, Indiana Supreme Court

More Blog Entries:

Peoples v. Tuck – North Carolina Appeals Court Weighs Horse Owner Liability for Escape That Caused Crash, Oct. 24, 2016, Charlotte Injury Attorney Blog

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