CAN A DEFENDANT PRESENT EVIDENCE THAT A PORTION OF MEDICAL BILLS WERE WRITTEN-OFF BY A HEALTHCARE PROVIDER IN A PERSONAL INJURY CASE?

Sometimes the black letter law passed by the legislature is unclear. The legislature can’t anticipate every possible fact scenario when they pass a law, so it lay to the courts to interpret the law and give guidance to what it means. This interpretation is called case law. When the court decides a certain meeting to the law it essentially answers a legal question. Lawyers and other courts then can rely on that ruling when they have a similar issue in their case. The following case answers the question above.

Martinez v. Milburn Enterprises, Inc., 290 Kan. 572, 233 P.3d 205 (2010).

This case addresses the following issue:

Can a defendant present evidence that a portion of medical bills were written-off by a healthcare provider in a personal injury case?

This case dealt with the effect of the “collateral source” rule on the admissibility of insurance write-offs for healthcare bills. Id. at 208. The collateral source rule prevents a defendant from presenting evidence that the plaintiff received payment from “a source wholly independent of and collateral to the wrongdoer.” Id. This almost exclusively arises in the context of health insurance for personal injury claims, as was the case here. Id. The court ultimately found that write-offs did fit within the collateral source rule, but the billed amounts and accepted amounts did not, because the amount billed and amount accepted are highly relevant to the fact question of what “the reasonable value of the medical treatment” received by the plaintiff is. Id.

In this case, the plaintiff suffered a slip-and-fall at a shopping center. Id. Her medical bills totaled $70,496.15. Id. However, the medical provider ultimately accepted only $5,310 to satisfy this full amount, and plaintiff herself only paid $621 (deductible and co-pay). Id. The trial court disallowed any evidence of the full billed amount, instead limiting the plaintiff to evidence of $5,310 of payment. Id. The Kansas Supreme Court was asked to decide what was proper to present to the jury: the full billed amount, the amount actually paid, or the amount written off. Id.

The court began by reviewing the current Kansas case law and case law of other states concerning the collateral source rule. Id. at 221-23. The collateral source rule had developed to ensure that a plaintiff is not punished for having the foresight to carry health insurance. Id. at 221. However, Kansas also recognizes that it is the task of the jury to determine what the reasonable cost of medical services are in a personal injury case. Id. at 222. Taking these two together, the court determined that the total billed amount was highly relevant to assisting the jury in determining the value of medical services. Id. at 229. Additionally, the ultimate amount of accepted by the medical provider is also relevant and useful for a jury. Id.

What the court was not willing to have placed before the jury was the amount paid by the plaintiff’s insurance or the specific write-off amount. Id. This would undermine the collateral source rule altogether, in that it would entice the jury to punish the plaintiff for having insurance—precisely what the collateral source rule was developed to prohibit. Id. Thus, this information is not permissible to place before a jury, though the jury will easily be able to figure out this amount based upon the billed amount and accepted amount. Id.