Document Category: Regulatory
State: Indiana
Subject Matter: Discounted Reimbursements By Government Payers Are Admissible To Prove The Reasonable Value of Medical Services In Indiana
Document Title: Discounted Reimbursements By Government Payers Are Admissible To Prove The Reasonable Value of Medical Services In Indiana

On October 21, 2016, the Indiana Supreme Court held that
discounted reimbursements by government payers that
are accepted as full payment of medical services rendered
are a “proba􀆟 ve, relevant measure of the reasonable
value of the plain􀆟 ff ’s medical care that a fac􀆞 inder
should consider.” Mary K. Patche􀆩 v. Ashley N. Lee, 29S04-
1610-CT-549. In other words, discounted amounts that a
health care provider accepts in sa􀆟 sfac􀆟 on of the amount
billed, regardless of whether the payer is a government
insurer or a private insurer, can be used as evidence of
the reasonable value of medicalservices
without running afoul
of the Collateral-Source Statute,
Indiana Code § 34-44-1 et seq. This
approach is consistent with one
goal of Indiana tort law – making
injured par􀆟 es whole.
In Stanley v. Walker, 906 N.E.2d 852
(Ind. 2009), the Indiana Supreme
Court determined that Indiana’s collateral-source
statute permits a defendant to introduce discounted
reimbursements nego􀆟 ated between a plain􀆟 ff ’s
medical provider and his private insurer to evidence the
reasonable value of medical services. In concluding that
the ra􀆟 onale of Stanley applies to reimbursements made
by government payers, the Patche􀆩 Court eff ec􀆟 vely
eliminated any uncertainty about how par􀆟 es prove
disputed medical-services losses at trial: the plain􀆟 ff
introduces evidence of the en􀆟 re amount billed, which is
almost never actually paid by the private or government
insurer, and the defendant then introduces evidence
of the discounted amount that a health care provider
accepted in sa􀆟 sfac􀆟 on of the amount billed.
Since the Supreme Court decided Stanley in 2009, six
states have precluded the admission of reimbursements
altogether, two states have concluded that only the
discounted amount actually paid for medical services is
admissible, and two states, now three including Indiana,
have concluded that evidence of both the amount
billed and the amount accepted is properly admi􀆩 ed as
evidence of the reasonable value of medical-services.
Not only is the hybrid approach that the Supreme Court
fi rst outlined in Stanley and reemphasized in Patche􀆩 ,
the fairest approach, it recognizes Indiana’s “deep abiding
faith in the jury system” by providing juries with all, not
just some, of the relevant medical-services loss evidence
and trus􀆟 ng that juries will get it right.
While the Supreme Court’s opinion
in Patche􀆩 will be viewed as a major
victory for the defense bar, both the
plain􀆟 ff bar and defense bar should
rejoice in the fact that the opinion
provides a clear roadmap to proving
medical specials at trial. Addi􀆟 onally,
certainty and clarity in the process of
proving medical-services losses at trial
will have a posi􀆟 ve eff ect upstream – on earlier phases
of the li􀆟 ga􀆟 on including ini􀆟 al case assessments and
se􀆩 lement nego􀆟 a􀆟 ons. Consequently, if medicalservices
losses may be a signifi cant focus of a plain􀆟 ff ’s
claim for damages, defendants would be wise to collect
the per􀆟 nent medical bills and specifi c informa􀆟 on
regarding amounts billed and amounts paid, as early as
possible in the li􀆟 ga􀆟 on.
Philip List
t: 317.464.4140

Document Author: Philip List
Firm/Company: SmithAmundsen
Document Date: October 31, 2016
Search Tags: IN
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