Plaintiff’s injury lawyers cringe…Robinson gets strengthened by the Supreme Court

A large part of my practice at Isaac Brant is defense litigation.  For example, Bob gets injured in a construction site accident and sues for his injuries.  Bob naturally goes to the doctor to get better.  Modern medicine is not perfect and its not magic either.  Humans cannot be rebuilt better, stronger, and faster than they were before.  In real life, Bob has been left with permanent injuries to his body and will suffer a lifetime of pain that can only be managed – not cured.

Ohio juries will hear how much the doctor took, not how much she charged.

If the people that Bob sued are found responsible for his injuries, it is only fair that they should pay his medical bills.  For his continued pain and suffering, our society has determined that money is supposed to make it all better.  For a very long time, a common outcome for legitimate injury cases was an award of the plaintiff’s medical bills multiplied by three.  Bob has $25,000 in medical bills, so a fair settlement or jury verdict could be $75,000 to account for his bills and his continued pain and suffering.

Now, enter BIG health insurance and our lovely health care system.  What a lot of people do not realize is that, when a doctor charges $1,000 for a medical procedure, she has a contract with the health insurance companies where she previously agreed to accept $500 for that procedure and call it “paid in full.”  In many real life scenarios, Bob would produce his medical bills at trial showing that his doctor charged $25,000 for his medical treatment where, in actuality, only $9,000 was paid.  So what’s fair?  Is it fair for the jury to hear that Bob has $25,000 in medical bills knowing that $14,000 was just written off?  Or is it fair for the jury to hear that $9,000 was the amount accepted as payment in full for Bob’s treatment?

In the world of 3 x bills plaintiff awards, this is a $48,000 question for Bob.  This question was addressed in Ohio by a case called Robinson v. Bates in 2006.  The Supreme Court of Ohio held that a defendant was allowed to tell the jury about the $14,000 in write-offs from Bob’s $25,000 medical bill.  This decision was hotly contested by Plaintiff’s injury lawyers given how the Robinson decision was written.  Lots of loopholes and questions.  Those loopholes appear to have been closed this week by the Ohio Supreme Court with its decision in Jaques v. MantonJaques clears up certain evidentiary questions left open by Robinson.  What does this all mean?  It means there will continue to be a downward shift in Plaintiff’s awards for injury cases.  Defense lawyers are happy and Plaintiff’s lawyers are frustrated.

There is A LOT to both the Robinson and Jaques decisions regarding how this whole process works.  This article only provides a snapshot and a little commentary about how the system works.  It seams reasonable that a jury has a right to hear the actual amount paid for a medical procedure.  Standard Garage Sale rules should apply, right? How often does a garage sale toaster with a $20 price tag sell for $20.00?  As a shopper, you know you’ll get it for $10 and maybe even $5.  Should the seller tell his buddies the next day that the toaster went for $20 when he actually sold it for $5?  This is the premise behind Robinson and Jaques – it does not matter how much you demanded to be paid, what matters is what you ended up living with.

Agree or disagree?  Let us know in the comments.

If you’re in to the nitty-gritty details of the case, you can read the Supreme Court’s official release summarizing the Jaques decision and read the case itself by clicking:

From the Supreme Court of Ohio:

(May 4, 2010) The Supreme Court of Ohio ruled today that the defendant in a personal injury lawsuit is not barred by Ohio’s collateral source statute from introducing at trial evidence of “write offs” accepted by medical service providers that reduced the actual cost of the plaintiff’s medical treatments to a lower amount than those providers originally billed for their services.

The Court’s 5-1 decision, authored by  Justice Terrence O’Donnell, reversed a ruling by the 6th District Court of Appeals.

Richard Jaques was injured in a December 2005 traffic accident for which the other driver, Patricia Manton, admitted liability. When the parties could not agree on the amount of damages, Jaques filed suit against Manton seeking recovery for his medical injuries, lost wages and pain and suffering. During pretrial proceedings, Jaques sought and was granted a motion barring Manton from informing the jury that while he had been billed a total of $21,874 for medical treatments arising from the accident, his health care providers had accepted $7,484 as payment in full for those services, having “written off” $14,390 from their original bills based on their contractual agreements with his health insurance provider, Medical Mutual of Ohio.

At trial, the jury was able to consider only the amount billed by the medical providers, not the amount accepted as full payment. The jury subsequently awarded Jaques damages totaling $25,000, with $15,500 of that amount designated for medical expenses. Manton moved for a new trial on the basis that the judge had erred in not allowing her to introduce evidence about the write-offs on Jaques medical bills. The trial court denied the motion and certified the jury’s verdict.

Manton appealed.  The 6th District Court of Appeals affirmed the trial court’s evidentiary ruling, holding that evidence of the write-offs was barred by the state’s collateral source statute, R.C. 2315.20.  Manton sought and was granted Supreme Court review of the trial and appellate courts’ decisions.

Writing for the majority in today’s decision, Justice O’Donnell noted that in a similar case decided in 2006, Robinson v. Bates, the Supreme Court held that under the common law collateral source rule in force prior to the enactment of R.C. 2315.20, a defendant was permitted to introduce evidence of write offs that reduced the amounts of the plaintiff’s medical bills. In this case, he observed, the pivotal question is whether the legislature’s enactment of R.C. 2315.20 effective in April 2005 compels a different conclusion with regard to the admissibility of similar evidence.

Justice O’Donnell wrote: “The general collateral-source-rule provision in R.C. 2315.20

pertains only to ‘evidence of any amount payable as a benefit to the plaintiff.’  This formulation is no different substantively from the common-law rule described in Robinson … as excluding only: ‘evidence of benefits paid by a collateral source.’ …  Our common-law analysis from Robinson applies equally in the context of the statute.  Both versions of the collateral-source rule are concerned with actual payments made by third parties to the benefit of the plaintiff, but the focus of the statute is to prevent a double-payment windfall for the plaintiff while the focus of the common-law rule was to prevent the defendant from escaping the full burden of his tortious conduct. Write-offs are amounts not paid by third parties, or anyone else, so permitting introduction of evidence of them allows the fact-finder to determine the actual amount of medical expenses incurred as a result of the defendant’s conduct.  This result supports the traditional goal of compensatory damages—making the plaintiff whole.”

Justice O’Donnell acknowledged Jaques argument that R.C. 2315.20 prohibits trial evidence about insurance benefits received by a plaintiff when those benefits are subject to subrogation (reimbursement of the insurer from any damages recovered by the plaintiff  through a lawsuit against the at-fault party), and that admitting evidence of the care providers’ write-offs would allow jurors to calculate the amount Jaques received in insurance benefits that were subject to subrogation. He wrote, however, that: “While Jaques’ concerns may not be unfounded, we see no indication of those concerns in the language of the statute. We are required to apply the plain language of a statute when it is clear and unambiguous. … A write-off indicates only that the provider accepted less than the amount originally billed for its services. While this may typically occur due to an insurance agreement, that is certainly not always the case. R.C. 2315.20 does not indicate a legislative intent to bar such evidence.”

“Because R.C. 2315.20 does not prohibit evidence of write-offs, the admissibility of such evidence is determined under the Rules of Evidence. A plaintiff is entitled to recover the reasonable value of medical expenses incurred due to the defendant’s conduct. … The reasonable value may not be either the amount billed by medical providers or the amount accepted as full payment.  ‘Instead, the reasonable value of medical services is a matter for the jury to determine from all relevant evidence.  Both the original medical bill rendered and the amount accepted as full payment are admissible to prove the reasonableness and necessity of charges rendered for medical and hospital care.’  The trial court and court of appeals both erred in refusing to admit evidence of write-offs by medical providers relating to Jaques’ care.  R.C. 2315.20 does not apply to write-offs, and therefore, our conclusion from Robinson controls—evidence of write-offs is admissible to show the reasonable value of medical expenses.”

Justice O’Donnell’s opinion was joined by Justices Evelyn Lundberg Stratton, Maureen O’Connor, Judith Ann Lanzinger and Robert R. Cupp.

Justice Paul E. Pfeifer entered a dissent stating that in his view the majority failed to apply R.C. 2315.20 according to the plain terms of that statute.

He wrote: “At issue in this case is whether a defendant may introduce evidence of a write-off.  In this case, Jaques was billed $21,874.80 for medical expenses. The medical provider accepted $7,483.91 as payment in full, effectively writing off $14,390.89. Jaques understandably wants the jury to think that he incurred $21,874.80 in medical expenses; Manton understandably wants the jury to think that Jaques incurred only $7,483.91 in medical expenses.  R.C. 2315.20(A) answers the question before us:  evidence of the amount payable may not be introduced because ‘the source of the collateral benefits has a … contractual right of subrogation.’ Jaques did not negotiate the write-off, neither did Manton.  The provider of Jaques’s medical care did not initiate the lesser payment. Who is left to be the source of the collateral benefits?  It can only be Jaques’s insurance company. They initiated and negotiated the write-off and they have a contractual right of subrogation. Accordingly, evidence of the collateral benefits may not be introduced.”

A pdf and video of the oral argument of this case can be found here.