Florida Decisions Trending Toward Admitting Gross Amount of Medical Bills into Evidence

September 2011

Recent decisions by the First and Fourth District Courts of Appeals permit a plaintiff to have the gross amount of medical bills related to an accident admitted into evidence at trial rather than limiting the medical bills to the amount actually accepted by the provider(s) as full payment for the medical services.

Durse v. Henn, 2011 WL 2622370 (Fla. Fourth DCA 2011) and Nationwide Mutual Fire Insurance Company v. Harrell, 53 So.3d 1084 (Fla. First DCA 2011) limit the previously defense-friendly applications of Thyssenkrupp Elevator Corporation v. Lasky, 868 So.2d 547 (Fla. Fourth DCA 2003) review dismissed, 873 So.2d 1225 (Fla. 2004) and Cooperative Leasing, Inc. v. Johnson, 872 So.2d 956 (Fla. Fourth DCA 2004). Specifically, the courts in Durse and Nationwide follow a “collateral source” approach rather than an “evidentiary approach” and focus on whether the plaintiff “earned in some way” the reduction in bills. Moreover, they distinguish between medical expenses that are satisfied by Medicare and medical expenses satisfied by a private insurer or through private negotiations with the provider. As discussed below, these distinctions can result in the plaintiff being able to claim artificially inflated past medical expenses at trial, potentially increasing an award of pain and suffering and future medical expenses.

In most personal injury trials a common issue is whether the trial court should admit the gross amount of past medical bills into evidence or limit the medical bills to the amount actually accepted by the provider(s) as full payment for the medical services. The defense usually moves in limine, or in advance of trial, to limit the past medical expenses. Plaintiffs argue for introduction of the full amount of medical expenses at trial and a post-verdict setoff. The recent decisions noted above have significantly limited the defense approach.

Early Decisional Law
In Thyssenkrupp, the plaintiff was injured on an elevator and incurred significant medical expenses that were satisfied in their entirety by Medicare. However, Medicare paid a substantially reduced rate to resolve the entirety of the bills. The issue in Thyssenkrupp was whether the plaintiff could recover the adjusted amount even though there is no right of subrogation for the adjusted amount. The defendant argued that the plaintiff will never have to pay the adjusted amount and therefore the difference is “either inadmissible as damages suffered by plaintiff or that a setoff is required by section 768.76 because this is an unwarranted surplus damage awarded to plaintiff.” The trial court disagreed and admitted the full amount of the bills and refused to award a post-verdict setoff. The appellate court agreed with the defendant, and, relying on Florida Physician’s Insurance Reciprocal v. Stanley, 452 So.2d 514 (Fla. 1984), reversed, holding:

Allowing the admission of evidence of the excess discharged by Medicare payment has the effect of “providing an undeserved and unnecessary windfall to the plaintiff.” (Emphasis added.) Lasky at 550.

On rehearing, the court noted that:

“We saw this as an issue pertaining to the admission of evidence, not really as a setoff. Thus our actual holding should be understood as an evidentiary ruling. When a provider charges for medical service or products and later accepts a lesser sum in full satisfaction by Medicare, the original charge becomes irrelevant because it does not tend to prove that the claimant has suffered any loss by reason of the charge.” (Emphasis added.) Thyssenkrupp at 551.

The court concluded that the defendant was entitled to have the past medical expenses awarded by the jury reduced by the amount adjusted. In other words, while the court found it an evidentiary issue (not a collateral source issue), the remedy on remand was to reduce the amount of past medical expenses, post-verdict, and not award a new trial.

Shortly after Thyssenkrupp, the Second District Court of Appeals decided Cooperative Leasing. In Cooperative Leasing, the plaintiff was billed $56,950.70 but her providers accepted $15,000 in PIP and $13,461 from Medicare as payment in full for their services. Thus, the plaintiff “was and never will be legally obligated to pay more than $13,461 for medical services.” As in Thyssenkrupp, the court concluded that the plaintiff was not entitled to recover medical expenses beyond those paid by Medicare “because she never had any liability for those expenses and would have been made whole by an award limited to the amount Medicare paid to her medical providers.” Cooperative Leasing at 958. The court reversed, holding the “trial court should have granted the appellants’ motion in limine and prohibited Johnson from introducing the full amount of medical bills into evidence.” Like Thyssenkrupp, the court in Cooperative Leasing relied on a common-sense approach that if the plaintiff cannot recover the adjusted amount, then it should not be admitted in evidence.

Following Thyssenkrupp and Cooperative Leasing, the Supreme Court decided Goble v. Frohman, 901 So.2d 830 (Fla. 2005), in which the plaintiff was billed $574,554.31 by his medical providers but his private health insurer, Aetna, Inc., paid only $145,970.46 for the services. This resulted in a contractual adjustment of more than $400,000. The Supreme Court held that because the plaintiff’s HMO fully discharged his obligation to pay anything in excess of the amount paid by the HMO, plaintiff benefitted from the adjustment, which constituted a collateral source. Therefore, a setoff was required.

Significantly, the Supreme Court’s analysis was predicated on a “collateral source” analysis as opposed to the evidentiary analysis undertaken by the courts in Thyssenkrupp and Cooperative Leasing. This is significant because while they both rely on the same principle that a plaintiff should not be entitled to a windfall, a “collateral source” generally results in a post-verdict setoff rather then a limit on the amount that will be admitted in evidence. Thus, Goble can be problematic to the defense position of limiting the amount of medical bills in advance of trial. However, Goble is distinguishable because the defense attorney did not move in limine in advance of trial and therefore the Goble court did not address the issue as directly as Thyssenkrupp and Cooperative Leasing. Also, the Supreme Court did not draw a distinction between bills paid by Medicare and those paid by private insurers.

Following the above-mentioned cases, many trial courts limited the admissibility of past medical expenses in advance of the trial to only those expenses paid with a right of subrogation or those still owed irrespective of whether the bills were paid by Medicare or private health insurance carriers.

Recent Trend
Recently, however, the court in Nationwide Mutual Fire Insurance Company v. Harrell, 53 So.3d 1084 (Fla. First DCA 2011) held that under the collateral source rule, the plaintiff was entitled to introduce into evidence the gross amount of the medical bills rather than the lesser amount paid by the plaintiff’s private health insurer. The First District Court of Appeals distinguished ThyssenKrupp and Cooperative Leasing as cases involving payments made by Medicare, whereas Nationwide involved a private health insurer to whom the plaintiff actually paid premiums and “earned” the benefits. Specifically the court held that “it is relatively clear that our supreme court intended to limit abrogation of the evidentiary portion of the collateral source rule to cases where the benefits received to reduce the cost of medical were not earned (or paid for) in some way by the plaintiff.” Thus, the appropriate mechanism of reduction where the services were paid by a private health insurer is a post-trial setoff and not a limitation on the amount of medical bills that can be presented to a jury. Appeal was made to the Supreme Court. The plaintiff argued there is no conflict with Thyssenkrupp or Johnson. It appears the Supreme Court agreed and dismissed the appeal for lack of jurisdiction.

Relying on Nationwide, the Fourth District Court of Appeals further limited Thyssenkrupp and Cooperative Leasing,holding that the trial court erred when it refused to allow the plaintiff to present the full amount of his past medical bills to the jury. See Durse. The plaintiff in Durse did not have health insurance and was not a Medicare recipient, rather negotiating a lesser amount and paid out of pocket. The Fourth District held that the plaintiff “by negotiating a lower amount…earned in some way” the benefits of the reduction within the meaning of Nationwide. As such, the full amount of medical bills should have been admitted.

The holding of Durse is problematic. However, Durse is distinguishable from Thyssenkrupp, Cooperative Leasing and even Nationwide. A review of the appellant's and appellee’s briefs gives further insight into the unique facts argued in Durse. See Durse v. Henn, 2010 WL 2006267 (Fla. Fourth DCA 2011) and Durse v. Henn, 2010 WL 3388855 (Fla. Fourth DCA 2010). Unlike Thyssenkrupp and Cooperative Leasing, the plaintiff in Durse paid medical bills that were outstanding under a letter of protection after obtaining a settlement with a co-defendant. In fact, the settlement required the plaintiff to resolve the outstanding medical bills. His attorney then negotiated the medical bills down from $92,000 to $32,000. The trial court limited the evidence to $32,000 (plus $3,000 of bills still outstanding). Thus, the plaintiff in Durse truly “earned” the reduced amount of medical bills through private negotiation with a co-defendant followed by a private negotiation with his medical providers. This is unlike an “adjustment” made by a medical provider because of a contractual or statutory obligation.

Conclusion and Other Practical Considerations
It appears the trend of Florida law has gone away from the “evidentiary” analysis undertaken by Thyssenkrupp and Cooperative Leasing and moved toward the “collateral source” analysis undertaken by the courts in Nationwide and Durse. Fortunately, no Florida courts have yet to hold that when the reductions in medical bills are “earned” through either private payment negotiation or otherwise, the full amount of the bills is admissible and there is no right to a post-verdict setoff. This result would certainly result in an unwarranted windfall, and Goble is still controlling on that issue.

The recent trend set in Nationwide and expanded on in Durse can be extremely problematic for defendants because it will allow the jury to consider artificially inflated medical bills when determining future medical costs and pain and suffering. It also can have adverse implications where defendants are making a “threshold” defense in an auto accident case. Surely, a jury is more likely to find permanency where the bills presented are $50,000 instead of $15,000.

It will be prudent to attempt to distinguish Durse and Nationwide wherever possible. For example, there is a strong argument that Durse and Nationwide do not apply to a situation where the plaintiff has no health insurance, fails to pay his bill and the debt is ultimately written off by the provider as a bad debt. This is not “earned in some way” under Nationwide. Likewise, one should be cautious where a plaintiff attempts to argue it was burdened by medical bills that were ultimately written off as bad debt even if failing to pay the medical bills timely resulted in a loss of credit. Finally, defendants should argue that there is no difference between Medicare and private insurance because individuals pay part of their wages to Medicare for years. Thus, Thyssenkrupp and Cooperative Leasing are still controlling at least in the Fourth and Second District Courts of Appeal.

An issue that has yet to be addressed by the courts is whether evidence can be presented that the medical bills were ultimately resolved for a lesser amount and that there is no obligation for the plaintiff to pay back the difference. A defendant should be able to proffer evidence without mentioning insurance by cross-examining the provider or the plaintiff. However, making this argument may result in jeopardizing the defendant’s right to a post-trial setoff because the jury is now determining the reasonable amount of the past medical bills. Finally, an analysis of the risk in obtaining a pre-trial in limine ruling should be undertaken as this can result in a favorable verdict being overturned. Thus, if the “adjusted amount” is small, it may be prudent to accept the post-trial setoff. However, if the “adjusted amount” is great, it is likely worth the risk to move in limine.

These are all significant considerations in light of the apparent trend moving toward trial courts admitting the gross amount of the medical bills where the reduction was “earned in some way” and later awarding a post-trial setoff. While arguments exist to reinstate Thyssenkrupp and Cooperative Leasing, it will be prudent for defense counsel to now analyze a case in its early stages as if the gross amount of the medical bills will be admitted into evidence. Until the Supreme Court clarifies the issue, it appears the trial court’s decision will be largely based on the district in which the case is tried and whether the trial court believes it is bound to Nationwide and Durse.

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