Discounted Portion of Medical Bills Given Asset Status
September, 2005
Arthur v. Catour, 216 Ill. 2d 72 and Foust v. McFarland, 698 N.W.2d 24 (Minn. App. Ct.), have aligned Illinois and Minnesota with those jurisdictions that permit plaintiffs to introduce full medical charges as billed - notwithstanding that those charges have been discounted pursuant to contract between the plaintiff’s medical insurer and the healthcare provider.
Those courts propose to justify the plaintiff’s recovery of such phantom sums billed by the medical provider by relying upon the collateral source rule which, as a matter of public policy, provides that benefits which the injured party secures through his purchase of insurance should not provide a windfall to the wrongdoer.
This reasoning is, in my opinion, fallacious. The windfall is the plaintiff’s recovery of damages not sustained. The Courts' reasoning runs afoul of the rule that the defendant should pay only the reasonable value of services rendered to the plaintiff. As the Arthur court acknowledged, the injury plaintiff cannot make out a prima facie case of reasonableness by simply introducing the bill because that plaintiff “cannot truthfully testify that the total billed amount has been paid.” Since the plaintiff thus must adduce evidence that the billed amount is reasonable, the defendant may, according to the Arthur majority, challenge the plaintiff’s proof upon cross-examination and also offer his own evidence pertaining to the reasonableness of the charges.
The fallacy in the Court’s “solution” is that the defendants’ challenge is not likely to be meaningful. The point was made by Chief Justice McMorrow’s dissent:
It is my belief that the evidentiary procedure required by the majority will be unworkable … Defendant, attempting to show that the billed amount does not reflect the reasonable value of the services provided, will cross-examine plaintiff’s witnesses and question whether the amounts charged by the provider are the amounts actually paid by the patient for the services rendered. It is very likely that plaintiff’s counsel would immediately object to such a line of questioning on the basis that these questions would ultimately reveal that the plaintiff received payment from a collateral source - her insurance company - and therefore violate the collateral source rule. Thus, under such a scenario, defendants may very well have no means of challenging the reasonableness of the billed amount of medical services as the measure of plaintiff’s damages. •
Back to CM Report of Recent Decisions (2005v3) 2005 Volume 3 Table of Contents
