BRANDON O. GIBSON, J.
This interlocutory appeal requires review of a ruling on a motion in limine in a personal injury case. Prior to trial, the plaintiffs submitted expert testimony from a treating physician to establish the reasonableness of their claimed medical expenses. The defendants filed a motion in limine seeking to exclude evidence of what they deemed "unreasonable" medical expenses. They argued that the Tennessee Supreme Court's decision in West v. Shelby County Healthcare Corporation, 459 S.W.3d 33 (Tenn. 2014), established a new standard in Tennessee for determining the reasonable amount of medical expenses as a matter of law. The trial court granted the defendants' motion in limine, thus excluding the testimony of the treating physician. For the following reasons, the trial court's order is reversed and this matter is remanded for further proceedings.
Jean and Fred Dedmon (collectively, "Plaintiffs") filed this lawsuit against John T. Cook, seeking to recover for injuries arising out of a car accident. Plaintiffs alleged that Mrs. Dedmon incurred medical expenses totaling $52,482.87, and they attached her medical bills to the complaint. Defendant Cook filed an answer specifically denying that the medical bills attached to the complaint were reasonable or necessary.
Defendant Cook died during the litigation, and Plaintiffs filed an amended complaint naming as defendants the co-representatives of his estate, Debbie Steelman and Danny Cates, Sr. ("Defendants"). The amended complaint sought general compensatory damages but did not reference or itemize the previously attached medical bills. No medical bills were attached to the amended complaint.
Plaintiffs subsequently deposed one of Mrs. Dedmon's treating physicians — neurological surgeon Vaughan Allen. Dr. Allen testified that he had reviewed Mrs. Dedmon's medical bills and found them to be appropriate, reasonable, and necessary. Dr. Allen's deposition was filed in the trial court with the medical bills attached as exhibits.
On December 19, 2014, the Tennessee Supreme Court issued its decision in West v. Shelby County Healthcare Corp., 459 S.W.3d 33 (Tenn. 2014). Four weeks later, Defendants filed a motion in limine seeking to exclude "evidence of unreasonable medical charges" based on the supreme court's West decision. Defendants acknowledged that West involved interpretation of the Tennessee Hospital Lien Act, Tennessee Code Annotated §§ 29-22-101 to -107. The parties acknowledge that this case does not involve a hospital lien. Still, Defendants claimed that West defined the meaning of "reasonable" medical expenses for tort cases by "set[ting] forth a new standard in Tennessee, as a matter of law." Defendants argued that the medical bills previously submitted by Plaintiffs and discussed by Dr. Allen should be disregarded, pursuant to West, and the amounts the medical providers accepted in satisfaction of the bills should be deemed the "reasonable" medical expenses instead. Specifically, Defendants argued,
According to Defendants' calculations, Plaintiffs' health insurer only paid $18,255.42 to satisfy Mrs. Dedmon's medical bills, so that amount, according to Defendants, was the reasonable amount of her medical expenses.
Along with their motion in limine, Defendants also filed a "Notice of Intent to Rebut Presumption Pursuant to T.C.A. § 24-5-113." They again claimed that the "non-discounted" medical bills provided by Plaintiffs were not reasonable under the West standard.
Plaintiffs filed a response in opposition to Defendants' motion in limine. Plaintiffs asserted that Mrs. Dedmon had incurred, by that time, $57,668.87 in medical expenses, as reflected by the original, undiscounted charges listed on her medical bills. They noted Dr. Allen's testimony that these bills were reasonable and necessary for Mrs. Dedmon's treatment. Plaintiffs argued that West was confined to the "the limited purview of the Tennessee Hospital Lien Act" and did not define reasonableness for medical expenses in personal injury cases. Plaintiffs claimed that such an expansive reading of West "would violate statutes, legislative intent, established case law, the Collateral Source Rule, public policy, and would lead to widely disparate, unfair results." Aside from West, Plaintiffs argued that existing Tennessee statutes and caselaw permitted them to prove the reasonableness and necessity of their medical expenses through the testimony of Dr. Allen, and therefore, the motion in limine to exclude such evidence should be denied.
After a hearing, the trial court entered an order granting the Defendants' motion in limine to exclude Plaintiffs' evidence of "unreasonable medical charges." The trial judge characterized West as an effort by the Tennessee Supreme Court "to say we are not going to allow the subterfuge that the medical community uses with regard to insurance and expenses to sully the court system, if you will." The trial judge acknowledged that West was decided under the Hospital Lien Act but said, "I cannot imagine that they would use any other logic in this situation than they used in that situation; so I'm granting [the] motion." However, the trial court also granted Mrs. Dedmon permission to seek an interlocutory appeal to this Court.
Plaintiff presents the following issue for review on appeal:
For the following reasons, we reverse the decision of the circuit court and remand for further proceedings.
This interlocutory appeal stems from an order of the trial court granting a motion in limine. This Court reviews a trial court's decision to admit or exclude evidence, including a ruling on a motion in limine, under the abuse of discretion standard of review. Mercer v. Vanderbilt Univ., Inc., 134 S.W.3d 121, 131 (Tenn. 2004); Allen v. Albea, 476 S.W.3d 366, 377 (Tenn. Ct. App. 2015). A trial court abuses its discretion when it applies an incorrect legal standard or reaches a decision that is against logic or reasoning that causes an injustice to the party complaining. Mercer, 134 S.W.3d at 131 (citing Eldridge v. Eldridge, 42 S.W.3d 82, 85 (Tenn. 2001)). "`A trial court that premises its analysis on an erroneous understanding of the governing law acts outside its discretion.'" Wicker v. Comm'r, 342 S.W.3d 35, 37 (Tenn. Ct. App. 2010) (quoting Gov't Employees Ins. Co. v. Bloodworth, No. M2003-02986-COA-R10-CV, 2007 WL 1966022, at *5-6 (Tenn. Ct. App. June 29, 2007)).
"`A person who is injured by another's negligence may recover damages from the other person for all past, present, and prospective harm.'" Rye v. Women's Care Ctr. of Memphis, MPLLC, 477 S.W.3d 235, 267 (Tenn. 2015) (quoting Singh v. Larry Fowler Trucking, Inc., 390 S.W.3d 280, 287-88 (Tenn. Ct. App. 2012)). An award of damages is intended to make a plaintiff whole and compensates the plaintiff for damages or injury caused by a defendant's wrongful conduct. Meals ex rel. Meals v. Ford Motor Co., 417 S.W.3d 414, 419 (Tenn. 2013) (citing Inland Container Corp. v. March, 529 S.W.2d 43, 44 (Tenn. 1975)). "The party seeking damages has the burden of proving them." Overstreet v. Shoney's, Inc., 4 S.W.3d 694, 703 (Tenn. Ct. App. 1999) (citing Inman v. Union Planters Nat'l Bank, 634 S.W.2d 270, 272 (Tenn. Ct. App. 1982)). The amount of damages to be awarded, where the amount is within the limits set by law, is a question of fact. Beaty v. McGraw, 15 S.W.3d 819, 828-29 (Tenn. Ct. App. 1998) (citing Spence v. Allstate Ins. Co., 883 S.W.2d 586, 594 (Tenn. 1994); Reagan v. Wolsieffer, 34 Tenn.App. 537, 542, 240 S.W.2d 273, 275 (1951)).
"A plaintiff may be compensated for any economic or pecuniary losses that naturally result from the defendant's wrongful conduct," including past medical expenses. Meals, 417 S.W.3d at 419. "In personal injury actions such as this one, a plaintiff may recover only those reasonable medical expenses that were necessary to treat the injury caused by the defendant's negligence." Street v. Levy (Wildhorse) Ltd. P'ship, No. M2002-02170-COA-R3-CV, 2003 WL 21805302, at *4 (Tenn. Ct. App. Aug. 7, 2003). In other words, an injured plaintiff is entitled to recover for "reasonable and necessary medical expenses" associated with the treatment of the injury. Stricklan v. Patterson, No. E2008-00203-COA-R3-CV, 2008 WL 4791485, at *4 (Tenn. Ct. App. Nov. 4, 2008); Roberts v. Davis, No. M2000-01974-COA-R3-CV, 2001 WL 921903, at *4 (Tenn. Ct. App. Aug. 7, 2001). Recovery may be denied for expenses that the jury determines were unreasonable or unnecessary. Watson v. Payne, 359 S.W.3d 166, 169-70 (Tenn. Ct. App. 2011) (citing Brown v. Chesor, 6 S.W.3d 479, 484 (Tenn. Ct. App. 1999)).
The injured plaintiff bears the burden of proving that the medical expenses he or she is seeking to recover are necessary and reasonable. Borner v. Autry, 284 S.W.3d 216, 218 (Tenn. 2009). "In all but the most obvious and routine cases, plaintiffs must present competent expert testimony to meet this burden of proof." Id.; see also Monypeny v. Kheiv, No. W2014-00656-COA-R3-CV, 2015 WL 1541333, at *27 (Tenn. Ct. App. Apr. 1, 2015) (no perm. app. filed); Al-Athari v. Gamboa, No. M2013-00795-COA-R3-CV, 2013 WL 6908937, at *3 (Tenn. Ct. App. Dec. 30, 2013). Generally, in order to recover for medical expenses, "expert opinion must be offered regarding the reasonableness and necessity of the physician's services and charges." Stricklan, 2008 WL 4791485, at *4 (citing Roberts, 2001 WL 921903 at * 4). "A physician who is familiar with the extent and nature of the medical treatment a party has received may give an opinion concerning the necessity of another physician's services and the reasonableness of the charges." Long v. Mattingly, 797 S.W.2d 889, 893 (Tenn. Ct. App. 1990) (citing Employers Ins. of Wausau v. Carter, 522 S.W.2d 174, 176 (Tenn. 1975)). In order to be qualified to render these opinions, the physician must demonstrate "(1) knowledge of the party's condition, (2) knowledge of the treatment the party received, (3) knowledge of the customary treatment options for the condition in the medical community where the treatment was rendered, and (4) knowledge of the customary charges for the treatment." Id. (citing Nash v. Carter, App. No. 87-192-11, Slip op. at 13, 1987 WL 19312 (Tenn. Ct. App. Nov. 4, 1987)).
Tennessee Code Annotated section 24-5-113(a) assists plaintiffs "for whom the expense of deposing an expert may exceed the value of the medical services for which recovery is sought." Borner, 284 S.W.3d at 218. The statute provides a rebuttable presumption that medical bills itemized in and attached to the complaint are necessary and reasonable if the total amount of such bills does not exceed $4,000. Id. at 217. However, the presumption may be rebutted by proof contradicting either the necessity or reasonableness of the medical expenses. Id. at 218. Alternatively, subsection (b) of the statute provides a rebuttable presumption of reasonableness where a plaintiff serves upon the defendant at least 90 days prior to the date set for trial an itemization or copies of medical bills that were paid or incurred. Iloube v. Cain, 397 S.W.3d 597, 604 (Tenn. Ct. App. 2012).
Historically, the "reasonableness" of medical expenses was rarely controversial. Michael K. Beard & Dylan H. Marsh, Arbitrary Healthcare Pricing & the Misuse of Hospital Lien Statutes by Healthcare Providers, 38 Am. J. Trial Advoc. 255, 272 (2014). Physicians' testimony that medical charges were customary and reasonable was typically accepted proof of reasonableness. Id. at 273. In recent years, however, the issue of what constitutes a reasonable medical charge or expense has been the subject of increased litigation due to the increased involvement of governmental payors, the complexity of health care reimbursement provisions, financial pressures on hospitals, and the significance of medical expense recovery in personal injury litigation. Id.
Several courts have recently considered the issue of how to determine the reasonable value of medical services when the injured plaintiff's medical expense is paid by an insurer or government payor at a discounted rate.
It is not necessary for purposes of this opinion to catalog the various other approaches taken in additional jurisdictions. It suffices to say that the subject is hotly disputed, and courts have reached many different conclusions on the issues involved, often in divided opinions. See 2 Stein on Personal Injury Damages Treatise 7:36 (3d ed.) ("there is no consensus on the appropriate rule among the [] courts that have reached the question").
West involved the interpretation and application of Tennessee's statutes governing hospital liens. West, 459 S.W.3d at 41. The hospital at issue treated injured patients and received from the patients' insurance companies the full amount of the adjusted charges for the patients' care in accordance with the insurance companies' existing contracts with the hospital. Id. at 37. However, the hospital also attempted to use hospital liens to pursue payment of the unadjusted cost of the medical services from any third-party tortfeasors who caused the injuries to the patients. Id. If the hospital was able to collect the full unadjusted cost from a third-party tortfeasor, directly or from the patient's recovery from the third-party tortfeasor, it refunded any payments received from the patient's insurance company and released its lien. Id. at 38.
Patients filed suit to challenge this practice. The controlling provision of the Hospital Lien Act provided:
Id. at 43 (quoting Tenn. Code Ann. § 29-22-101(a)) (emphasis added). The Tennessee Supreme Court interpreted this statute with the following explanation:
West, 459 S.W.3d at 43-46 (footnotes omitted). In a footnote within this section, the supreme court further noted:
Kenney v. Liston, 760 S.E.2d at 451 (Loughry, J., dissenting) (quoting Howell v. Hamilton Meats & Provisions, Inc., 129 Cal.Rptr.3d 325, 257 P.3d at 1142).
Id. at 45 n.14.
Defendants argue that the West decision now controls the definition of reasonable medical expenses in personal injury litigation. They claim that the court "made a purposeful choice of words" in referencing the familiarity of the bench and bar with the concept of reasonable charges and in noting that recovery for medical expenses in personal injury cases is also limited to expenses that are "reasonable and necessary." They also note that the supreme court cited approvingly the Howell case in which the Supreme Court of California considered the concept of reasonable medical expenses in the context of personal injury litigation. The court also cited the dissent in Kenney. Thus, Defendants claim that, by citing these cases, the supreme court in West "specifically contemplate[d]" the use of its definition of reasonable medical expenses in tort litigation. Plaintiff, however, claims that the West decision only defined reasonable medical charges for the purposes of the Hospital Lien Act.
Tennessee trial courts have reached opposite conclusions as to the impact of West on Tennessee tort law. According to the parties' submissions on appeal, four Tennessee trial courts have interpreted West narrowly as applying only within the context of the Hospital Lien Act, while four others have interpreted it broadly as also defining the concept of reasonable medical expenses in personal injury litigation. At least three federal district court opinions have interpreted West as defining the standard of reasonableness for medical expenses in personal injury litigation. See Smith v. Lopez-Miranda, No. 15-CV-2240-SHL-DKV, 2016 WL 1083845, at *1-3 (W.D. Tenn. Feb. 10, 2016); Hall v. USF Holland, Inc., No. 2:14-CV-02494, 2016 WL 361583, at *2 (W.D. Tenn. Jan. 12, 2016); Keltner v. U.S., No. 2:13-CV-2840-STA-DKV, 2015 WL 3688461, at *3-5 (W.D. Tenn. June 12, 2015).
Having carefully reviewed the West opinion, we must agree with Plaintiff on this issue. The supreme court in West said "we must decide which version of the [hospital's] costs is the reasonable cost for the purpose of Tenn. Code Ann. § 29-22-101(a)." 459 S.W.3d at 44 (emphasis added). That was the issue before the court and the one it resolved. The court concluded that "[the hospital's] non-discounted charges . . . should not be considered reasonable charges for the purpose of Tenn. Code Ann. § 29-22-101(a)[.]" Id. (emphasis added). We reject any assertion that the supreme court meant for its holding in West, standing alone, to control all determinations of reasonableness with regard to medical expenses under Tennessee law. In fact, the supreme court cautioned that "[n]othing in this opinion should be construed to apply to hospital liens filed against patients who are TennCare enrollees." Id. at 39 n.2. If the court did not intend for its opinion to apply to hospital liens in all circumstances, surely the court did not intend for its opinion to be binding as to all determinations of reasonable medical expenses under Tennessee law.
Aside from our conclusion regarding the direct holding of West, Defendants and their amicus supporter essentially urge this Court to extend the reasoning of West to personal injury litigation. They claim that it is illogical to conclude that a plaintiff can recover a negotiated price differential as a "reasonable medical expense," even if the plaintiff never incurred the expense, while the hospital that actually provided the medical care is prohibited from pursuing the same amount through a hospital lien. This appears to be the approach taken by the trial judge, as he said, "I cannot imagine that [the supreme court] would use any other logic in this situation than they used in [the West] situation." That may be true. The Tennessee Supreme Court may very well consider this issue and decide that the same reasoning it employed in West in the context of the hospital lien statute should apply to personal injury cases. It may not. In the absence of any such ruling, however, it is not the role of this Court to overturn or overlook existing caselaw based on speculation about whether the supreme court would extend the reasoning of West to this situation.
As noted earlier in this opinion, under Tennessee law as it currently exists, "[d]amages in personal injury cases are not measured by `fixed rules of law' but rest[] largely in the discretion of the trier of fact." Roberts, 2001 WL 921903, at *4. According to the Tennessee Supreme Court, "[i]n all but the most obvious and routine cases, plaintiffs must present competent expert testimony" to prove that the medical expenses he or she is seeking to recover are necessary and reasonable. Borner, 284 S.W.3d at 218. "A physician who is familiar with the extent and nature of the medical treatment a party has received may give an opinion concerning . . . the reasonableness of the charges." Long, 797 S.W.2d at 893; see also Wells ex rel. Baker v. State, 435 S.W.3d 734, 742 (Tenn. Ct. App. 2013) (quoting Long); Roberts, 2001 WL 921903, at *4 ("physicians familiar with the extent and nature of the plaintiff's medical treatment can give an opinion regarding the reasonableness of the physician's services and charges").
Defendants' proposed expansion of West would create a new system that allows the amount accepted by medical providers in satisfaction of the bills to be deemed reasonable as a matter of law. For example, according to Defendants, Plaintiff should not be allowed to introduce proof of any medical expenses in excess of the amount accepted as payment in full by her medical providers. Thus, Defendants' proposal would require exclusion of a physician's testimony that the amount of charges billed represents a reasonable value. Such an approach is incompatible with the standards set forth in existing Tennessee caselaw. For instance, Long clearly recognizes that a physician may give an opinion concerning the reasonableness of medical charges. It is controlling on this Court until reversed or modified. See Tenn. R. Sup. Ct. 4(G)(2) ("Opinions reported in the official reporter [] shall be considered controlling authority for all purposes unless and until such opinion is reversed or modified by a court of competent jurisdiction.").
We recognize Plaintiffs' argument that Defendants are barred from introducing evidence of any discounted medical bills based on this Court's decision in Fye v. Kennedy, 991 S.W.2d 754 (Tenn. Ct. App. 1998). Fye was a wrongful death case arising out of an auto accident. Id. at 756. The trial judge allowed the plaintiff to present evidence of a medical bill reflecting total charges in the amount of $748,384.08 despite the defendant's argument that the plaintiff should have been limited to proving $75,264, the portion of the bill actually paid by Medicaid. Id. at 762. Although the parties did not cite any statutory, regulatory, or contractual basis for it, "the balance of the bill was, in some way, legally forgiven." Id. The court of appeals defined the issue as "whether, since the balance of the bill was forgiven, the plaintiff is entitled to recover the fair value of the services rendered as opposed to the actual amount paid by Medicaid." Id. The defendants argued that because $673,120.08 of the bill was forgiven, that portion of the bill should be treated "as no bill at all rather than as an expense." Id. at 763. The court discussed the right of an injured party to recover "reasonable and necessary" medical expenses and the application of the collateral source rule.
Although the Fye case is factually similar to the scenario we are considering on appeal, the Fye court was not asked to consider the precise issue now before us. In its discussion, the Fye court expressly noted that a defendant is permitted to introduce relevant evidence regarding the reasonableness of a medical expense, and the court pointed out that, in the case before it, "[t]here [was] no suggestion that the hospital bill for $748,384.08 [was] other than `reasonable.'" Id. at 764. As the full amount of the medical bill was concededly necessary and reasonable, the court concluded that the jury was entitled to consider the full amount of the bill rather than the lesser amount paid by Medicaid.
For the aforementioned reasons, the decision of the circuit court is hereby reversed and remanded for further proceedings. Costs of this appeal are taxed to the appellees, Debbie Steelman and Danny Cates, Sr., as co-representatives of the Estate of John T. Cook, for which execution may issue if necessary.
JOE G. RILEY, Sp. J., concurring.
I fully concur with the majority opinion by my learned colleague based upon existing case law, which we are bound to follow as an intermediate appellate court. I write separately to express my concerns relating to modem billing practices of medical providers and their effect upon present-day personal injury litigation. Were it not for existing case law which we are bound to follow as an intermediate appellate court, I would apply the West rationale to personal injury litigation.
We know nothing in this case about the billing practices of the medical provider or whether it was under contract with the insurance company to accept the amount paid in full satisfaction of the charges. Plaintiff argues the doctor has opined the non-discounted charges are reasonable, and there is no proof otherwise. Defendants, in essence, contend the amount accepted by the medical provider should be conclusive as to the reasonableness of the charges. In the ultimate event of a remand to the trial court, it may well have information about the billing practices of the medical provider and whether it was under contract with plaintiffs insurance carrier. The majority opinion concludes that under existing law the doctor's testimony confirming the non-discounted charges as reasonable is admissible. It further allows evidence that "something less than the charged amount has satisfied, or will satisfy, the amount billed." The fact-finder would then determine the amount of the reasonable medical expenses. Based upon existing law, I agree with these conclusions.
Although the record before us does not establish the billing practices of the hospital, there is much to suggest that modem billing practices of medical providers reveal a large disparity between the non-discounted charges and the amount the medical providers accept on a regular basis as payment in full. I share the trial judge's frustrations in this regard. The non-discounted charges have become more fictional than actual.
The implications of the issue before this Court in personal injury litigation are far reaching. Let us assume a plaintiff had a broken leg requiring hospitalization. According to the billing of the hospital, the amount reflected in its non-discounted billing was $40,000. Assume further the plaintiff was on Medicare, and the medical provider accepted $8,000 in full payment. This disparity is very problematic depending upon the amount the plaintiff is entitled to use as the reasonable medical expense. Based upon experience, we can reasonably assume an $8,000 medical expense will ordinarily lead to a much lesser settlement or overall verdict than a $40,000 medical expense. The majority opinion takes a hybrid approach by allowing the introduction of both figures based upon existing case law. I agree that this approach is dictated by existing case law.
Thus, there are three possibilities relating to the amount of reasonable medical expenses if we consider the opposing positions of the parties and the majority opinion: (1) the non-discounted charges; (2) the amount accepted in satisfaction of the charges; or (3) the hybrid method. In making such a determination, several questions come to mind. Is a $32,000 windfall in such a case reasonable for a plaintiff? Is it reasonable for a defendant to pay such a large windfall? Will we be penalizing an insured plaintiff if we allow evidence of the true amount accepted in full payment? Should we let the jury make the ultimate determination after hearing the explanation for both numbers as the majority opinion dictates? If so, are we adding another layer of depositions to an already expensive pre-trial process? If the jury makes the ultimate determination after hearing the explanation for both numbers, will the unpredictability of the reasonable medical expenses in such cases be tolerable in personal injury litigation? Would we be misleading the jury by not telling them what the provider accepted in full payment? Are we afraid to tell the jury the truth about the amount of the bill and what was accepted in full payment?
These are difficult questions to answer. However, I believe that modem day medical provider's non-discounted charges generally dictate that the non-discounted charges are no longer the reasonable medical expenses. This large disparity between the non-discounted charges and what medical providers are willing to accept in full payment is a phenomenon primarily dictated by modem day healthcare practices. It would appear such a large disparity did not exist until relatively recently. In fact, West specifically stated the non-discounted charges are "unreasonable," at least in the context of the Tennessee Hospital Lien Act, because such charges do not reflect what is customarily being paid. West v. Shelby County Healthcare Corp., 459 S.W.3d 33,44-45 (Tenn. 2014). Furthermore, West recognized that "virtually no public or private insurer" pays the non-discounted charges; thus, the more realistic standard is what the hospitals are willing to accept in full payment of the charges. Id. I am fully aware that the language in West is dicta as applied to personal injury actions; however, the strong and explicit statements in West are compelling.
As noted in the majority opinion, three federal district courts in Tennessee have concluded that the West rationale applies in personal injury litigation. See Smith v. Lopez-Miranda, No. 15-CV-2240-SHL-DKV, 2016 WL 1083845, at *1-3 (W.D. Tenn. Feb. 10, 2016); Hall v. USF Holland, Inc., No. 2:14-CV-02494, 2016 WL 361583, at *2 (W.D. Tenn. Jan. 12, 2016); Keltner v. US., No. 2:13-CV-2840-STA-DKV, 2015 WL 3688461, at *3-5 (W.D. Tenn. June 12, 2015). If this Court were not bound by existing case law, I would conclude these cases were properly decided.
In other jurisdictions, the case law prohibiting evidence of the actual amount paid by insurance as compared to the actual charges is historically based on the collateral source rule. Under this rule "[p]ayments made or benefits conferred by other sources are known as collateral-source benefits" and do not reduce the recovery against the defendant. Restatement (Second) of Torts (1977) § 920A Comment (2)(b)).
I recognize the long-standing collateral source rule and agree it does not bar evidence of an amount accepted in full satisfaction of medical expenses in this case. This is because the rule as customarily applied assumes the actual charges or non-discounted charges are reasonable. The so-called actual charges or non-discounted charges today are fictional and no longer represent reasonable charges. See West, 459 S.W.3d at 44-45. Neither the injured party nor the insurer pays the non-discounted charges nor are benefits conferred upon the injured party based upon the non-discounted charges. In short, neither the insurer nor the injured party is ever liable for the non-discounted charges. Accordingly, I agree the collateral source rule does not bar evidence of the amount accepted in full satisfaction of the charges.
If the non-discounted charge is used as the reasonable medical expense, I believe the amount of the windfall to plaintiffs is no longer rationally based and is out of kilter as compared to the past. I do not necessarily believe that plaintiffs with insurance will be penalized by applying the West rationale because it is unclear what an uninsured plaintiff would have to pay based upon the non-discounted charges. Currently, a defendant in a case involving an uninsured plaintiff would certainly be allowed to attack the non-discounted charge and present evidence of what was customarily accepted in full payment. Under the rationale of West, the non-discounted charges should not be considered reasonable medical expenses where the medical provider is under contract with the payer to accept the lesser sum; thus, the jury would not be called upon to choose between the two numbers or to determine some compromise number. Consistency and predictability of reasonable medical expenses would be maintained. Finally, and perhaps most importantly, we would be providing the jury or other fact-finder with accurate and truthful information. In short, I see no reason to continue to provide the jury or other fact-finder with misleading data. Plaintiffs would indeed recover the actual medical expenses.
In summary, I believe the time has come to re-evaluate the method of calculating reasonable medical expenses in personal injury litigation in light of modem billing practices and in accordance with the dictates of West. I do not believe our hybrid method will prove workable, nor do I think it is justified. However, this intermediate court is bound to apply the long-standing existing case law. For this reason, I concur with the majority opinion.
Fye, 991 S.W.2d at 765.
