Taking an Eraser to the Blackboard: New Strategies for Combatting the Ever-Increasing Cost of Medical Care in Litigation

by Jones, Skelton & Hochuli, P.L.C.

It is a common fact pattern in personal injury litigation: Plaintiff is injured and the Defendant is clearly at fault. The medical care received seems reasonable, and it appears to be a straightforward claim, but then the demand arrives. It is no secret that the cost of post-accident medical care is increasing. Contributing to that increase is a dramatic cost increase in chiropractic and pain management care, including injections, radiofrequency ablations, and nerve blocks. Together, it has become common to see six-figure medical specials stemming from even minor, low speed automobile accidents. These outrageous totals are then black boarded for the jury, leaving Defendants struggling to justify an award for less than the medical bills.

The 2017 Manual of Model Civil Jury Instructions for the Ninth Circuit explains that when determining the measure of damages, the jury should consider “[t]he reasonable value of necessary medical care, treatment, and services received to the present time.” Traditionally, Defendants rely on their own medical experts to opine as to the reasonableness of treatment and expenses. But as medical offices grow, fewer and fewer medical experts are able or willing to testify as to their own billing practices, let alone commenting or critiquing the charges of another provider’s bill.

When Plaintiffs allege subjective pain complaints and transient, soft-tissue injuries, Defendants risk looking callous when explaining to a jury how the Plaintiff did not need the treatment that various doctors, chiropractors, and pain management specialists tell them they needed or would be helpful. And what if all of the care was reasonable? It has become common practice for many medical providers, especially those that cater to post-accident care, to “bill” for amounts far in excess of what they ultimately accept or expect to receive.

One weapon that Defendants can use to combat these rising charges is the use of medical billing experts. Experienced billing experts provide two levels of important testimony. First, he or she will analyze the coding of the bills, including International Statistical Classification of Diseases and Related Health Problems “ICD” and Current Procedural Terminology “CPT” codes, and will identify improper, inappropriate, or repetitive billing codes that are often hidden within these medical bills to drive up the total amounts. For example, it is not uncommon for a chiropractor to bill twice for “manual therapy” to the cervical and lumbar spine in the same visit. A medical billing expert, however, can explain to a jury how the code for “manual therapy” should be billed by time, not by body part, and will eliminate one of those redundant charges. Similarly, standard surgical charges such as “operative use of microscope” and “surgical assistants,” are often overused, and should not usually be billed in conjunction with certain procedures. Billing experts can assist in pointing out these inaccuracies to a jury as well.

The second step that a billing expert will take is to determine the reasonable value of the medical services as compared to other providers within the same geographic region. To do so, the experts will use proprietary software and databases in order to determine what other providers in the same zip code (or nearby zip codes) are charging for the same CPT coded-services.

These methodologies, taken together, can significantly reduce the total bills presented to a jury. In one recent case, for example, a billing expert determined that the reasonable value of the $650,000 in black boarded medical bills was actually only $126,000 after removing the improper charges and inflated prices. In situations when the reasonableness of care is undisputed or uncertain, a billing expert’s testimony can provide the jury with a commonsense and rational basis to award a Plaintiff a sum less than the black boarded medical specials, even if liability is conceded.

In addition to combatting the reasonable value of the Plaintiffs’ or claimants’ billed care, a growing number of state courts are allowing Defendants to present evidence of the amounts actually paid on medical bills. While at first glance this seems to implicate the collateral source rule, courts are starting to understand that amounts paid on the bills may actually provide the best evidence as to the reasonable value of the treatment. So far, courts in Iowa, Ohio, Indiana, Kansas, Pennsylvania, Idaho, California, New York, Florida, Minnesota and Maryland have reached this conclusions. In Howell v. Hamilton Meats, the California Supreme Court explained that when the amount billed substantially exceeds the amount accepted as payment in full, the Plaintiff is not actually incurring liability for the difference, thus the collateral source rule is not implicated at all. Some of these jurisdictions have taken this proposition a  step further, finding that Plaintiff’s medical bills were not even admissible to prove past medical expenses.

This same principal should also be considered when evaluating future medical expenses. Plaintiffs typically blackboard ridiculously large sums for future care needs that are based on rack rates that can be three or four times as much as that provider typically accepts as payment for similar services. A billing expert can analyze the life care plans and provide the foundation for more reasonable costs for the future treatment based on the use of proper codes and typically accepted amounts for similar services in the region. Utilizing an expert in this area can significantly reduce the reasonable cost of future medical care and offer the jury a second (and generally much smaller) number from which to base a reasonable award for medical treatment.

As medical expenses continue to spiral out of control, it is more important than ever to be proactive in countering the “amount billed” approach that is generally used by Plaintiff’s counsel. Through the use of billing experts (and motion practice when necessary) Defendants can persuasively educate the judge and jury as to why the amounts billed by the medical providers are often mistaken, unreasonable, and not an accurate picture of what the reasonable costs of medical treatment are and, instead, offer an alternative number that is based on accurate billing at amounts that are commonly accepted for similar services in that area. With these strategies, Defendants can provide the jury with a reasonable and evidence-based justification for damages awards that fairly compensate an injured Plaintiff, regardless of the black boarded past and future medical specials.

Published in the March 2018 issue of Arizona Attorney Magazine.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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