Opinion
CV146022345
07-12-2016
Fernando Moran v. Vladmir Zhitkov
UNPUBLISHED OPINION
MEMORANDUM OF DECISION RE COLLATERAL SOURCE ADJUSTMENTS
Kenneth B. Povodator, J.
After a trial in this personal injury action, the jury awarded the plaintiff $29, 966.85 in damages The jury responses to interrogatories indicate that $19, 966.85 of that amount were for past economic damages, in turn $17, 829.89 representing the billing from Stamford Hospital. It is that hospital bill that is at the center of this dispute.
At the time of the accident, the plaintiff was covered by the state's Husky program (Medicaid), such that the hospital bill was paid, in part, through the program. The parties have agreed that a lien exists with respect to the portion of the bill actually paid such that the amount actually paid is not subject to treatment as a collateral source under General Statutes § 52-225a et seq. The issue before the court is the statutory collateral source treatment of the amounts that were written off, i.e. not paid, totaling $16, 071.29.
At a hearing on May 27, 2016, the parties stipulated that there had been two write-offs, one in the amount of $11, 957.04, and the other in the amount of $4, 114.25.
The defendants claim that the full amount of the write-offs should be treated as a collateral source payment and therefore be used to reduce the economic damages awarded to the plaintiff under the provisions of § 52-225a; the plaintiff claims that the statutory nature of the benefit and resulting write-offs preclude such treatment.
Discussion
Section 52-225a provides for an adjustment to the verdict for collateral source payments received by the plaintiff. The issue before the court is a matter of statutory interpretation--assuming that Husky/Medicaid benefits do not come within the scope of the statute because of the existence of a statutory lien, does a write-off of the unpaid balance constitute a payment for purposes of the statutes governing collateral source adjustments?
The plaintiff relies extensively if not exclusively on a trial court decision in French v. Belliveau, J.D. New Britain, HHBCV146028764S, --specifically, a memorandum of decision on the collateral source reduction issue, #174.00 (March 22, 2016, Wiese, J.). That decision contains an extensive discussion of collateral source reductions, ultimately concluding that that court would/should follow the trial court decision in Louis v. Houndris, J.D. Stamford, FST CV13-6016695, (January 12, 2015, Karazin, J.T.R.) and the Appellate Court's decision affirming and adopting the trial court decision in Hassett v. City of New Haven, 858 A.2d 922, 49 Conn.Supp. 7 (Super. 2004), affirmed, 91 Conn.App. 245, 880 A.2d 975 (2005).
A copy of the decision was attached to the plaintiff's objection (#173.00).
This court declines to follow these cited authorities in the present case. Most narrowly, Hassett, Louis and French were cases involving write-offs in the context of workers' compensation, and the current case does not involve workers' compensation. Louis explicitly relied upon the statutory nature of workers' compensation benefits, and French also drew a distinction based upon the administrative establishment of fees to be paid to providers, in concluding that workers' compensation write-offs were not to be treated as collateral source payments.
The court notes that the liability created by Chapter 568 typically is satisfied via insurance; see, e.g., General Statutes § 31-286 et seq. and more generally, § 31-284. The court further notes that in litigation, the insurer often is the real party in interest, see, e.g., The St. Paul Travelers Companies, Inc. v. Kuehl, 12 A.3d 852, 299 Conn. 800 (2011). See, especially, § 31-340, making an insurer directly and primarily liable for obligations of an insured employer relating to benefits under the Act.
This court is bound by appellate authority, and to the extent that Hassett, supra, contains general language that could be applied beyond the realm of workers' compensation, the court seemingly would be bound by that result. Therefore, the court must consider the possible significance of a passage from the trial court decision in Hassett :
" It can be assumed, for purposes of argument, that the subsequent forgiveness of a debt by a medical care provider qualifies as a " [payment] made to the claimant, or on his behalf." " 'Payment' is not a talismanic word. It may have many meanings depending on the sense and context in which it is used." United States v. Consolidated Edison Co., 366 U.S. 380, 391, 81 S.Ct. 1326, 6 L.Ed.2d 356 (1961). In economic terms, at least, the forgiveness of a debt is as much a payment as a transfer of money. The problem with the city's argument that a " payment" of this description is a " collateral source" is that it is not made " by or pursuant to" either (1) " [a]ny . . . insurance, " or (2) " any contract or agreement" within the meaning of § 52-225b. Rather, as far as the record reflects, the forgiveness here was the voluntary act of the medical care providers themselves. Under these circumstances, the subsequently forgiven debts are not collateral sources under the statute . . ." 49 Conn.Supp. 10.
At the outset, the court must recognize that although this discussion was in terms of " voluntary" write-offs, most such write-offs are contractually mandated and therefore not truly voluntary; see, Gianetti v. Rutkin, 142 Conn.App. 641, 70 A.3d 104 (2013) recognizing an exception to the usual contract situation as had been presented in Gianetti v. Anthem Blue Cross & Blue Shield of Connecticut, 111 Conn.App. 68, 74, 957 A.2d 541 (2008). In the context of workers' compensation, the write-offs are even " less voluntary" as they are established administratively, as noted in French, supra, at *9. This court believes that in French, the court more accurately characterized the adjustment/write-off in the context of workers' compensation as involuntary, and cited other involuntary write-off scenarios where the write-off has been treated as a collateral source " payment." To the extent that Hassett may have involved voluntary write-offs (or what were perceived to be voluntary write-offs) and/or to the extent that the Appellate Court decision relied on the characterization of the write-offs as voluntary, Hassett is (would be) distinguishable. Of course, this case does not involve workers' compensation payments or write-offs, so the cases identified above provide only limited guidance.
The court need not discuss whether the voluntary-involuntary dichotomy is a relevant or applicable issue in a non-workers' compensation scenario, because none of the cases cited by any of the parties seems to have addressed the 2012 change in the applicable statute. Section 2 of Public Act 12-142 substantially amended subsection (b) of General Statutes § 52-225a, adding the following relevant language:
For purposes of this subsection, evidence that [a specified medical services provider] accepted an amount less than the total amount of any bill generated by such [specified medical services provider], or evidence that an insurer paid less than the total amount of any bill generated by such [specified medical services provider] shall be admissible as evidence of the total amount of collateral sources which have been paid for the benefit of the claimant as of the date the court enters judgment.
The legislative history was discussed in a recent trial court decision:
Although it is not necessary to determine the meaning of § 52-225a, the legislative history to P.A. 12-142 highlights the purpose of the amendment. Mike Walsh, the President Elect of the Connecticut Trial Lawyer's Association, spoke in support of the bill before the Judiciary Committee on March 23, 2012:
Presently, under our current system, medical bills are offered at the time of trial as economic damages and then after the trial there's a what we call a collateral source hearing, and any medical bills that have been paid by insurance are then deducted in the collateral source hearing.
There's a problem with write offs. And a write off is when a health care provider accepts what insurance companies pay and then writes off the balance. So there's a $100 bill and insurance pays $40 and the--the healthcare provider writes off $60. The question then becomes how you handle that write off in the collateral source hearing, and in terms of the evidence at trial.
And what Section Two and Three are proposing to do is to clarify the uncertainty. Essentially what we're proposing is first, the whole medical bill will come in at the time of trial and it's Section Three of the Raised Bill and then, at the time of the collateral source hearing the judge will determine what's been paid by health insurance and deduct that and then he'll also determine if there's any write off and he'll consider that a collateral source as well, and that will get deducted. Conn. Joint Standing Committee Hearings, Judiciary, Pt. 14, 2012 Sess., p. 4439.Dunham v. Puorro, No. MMXCV126008276S, 2015 WL 830538, at *1-2 (Conn.Super.Ct. Feb. 5, 2015) [59 Conn.L.Rptr. 731, ].
See, also, public hearing testimony available at https://www.cga.ct.gov/asp/menu/CommDocTmyBillAllComm.asp?bill=HB-05545& doc_year=2012 .
Again, this case does not implicate workers' compensation, and therefore any distinction that may arise from the statutory/regulatory framework for write-offs (as discussed in cases cited above) would not be applicable. Indeed, French contains a discussion wherein it is recognized that Medicaid adjustments/write-offs have been recognized as appropriate collateral source " payments" for purposes of § 52-225a.
In short, the General Assembly seems to have intended to end the uncertainty and inconsistency that previously had existed concerning write-offs. The statute is not worded in terms of voluntary or involuntary adjustments to bills, but rather in terms of receipt by the provider of an amount less than was recited in the bill or, in the alternative, payment by an insurer of an amount less than the billed amount. In effect, the statute now directs the court to consider the existence of a disparity between the amount billed and the amount actually paid/received, for purposes of collateral source adjustments. (Whether this effectively overrides Hassett with respect to workers' compensation is beyond the scope of the issue presented to this court.)
The court feels compelled to address an apparent " gap" in the foregoing analysis. The list of providers in the amended version of § 52-225a(b) does not include any institutional providers such as hospitals, instead only referring to individual health care providers such as physicians and social workers. Although there may be a temptation to treat the list as exhaustive or otherwise precluding institutional health care providers (the principle of expressio unius est exclusio alterius; see, e.g., DeNunzio v. DeNunzio, 320 Conn. 178, 194, 128 A.3d 901 (2016)), the court concludes that such an approach would be inappropriate here, and would frustrate the legislative intent. The 2012 amendment appears to have been intended to clarify existing law rather than creating any new principle. This is emphasized by the way that the amendment was phrased--it is framed in terms of an evidentiary rule rather than a substantive provision, i.e. " [f]or purposes of this subsection, evidence [of the disparity between billing and amount paid or received] shall be admissible as evidence of the total amount of collateral sources which have been paid for the benefit of the claimant as of the date the court enters judgment." It authorized certain evidence to be relied upon for purposes of a collateral source adjustment calculation, inferentially a calculation allowing for consideration of write-offs. Unlike DeNunzio where there was an identified legislative intent to omit (delete!) a specific term, here the court was trying to clarify existing law and practices without any corresponding intent to impose a specific exception.
The court sees no rational reason why services rendered by individual health care providers should be treated differently than services provided by the same or similar providers in an institutional setting (e.g., as billed by a hospital) in this context. For example, in this case, there were two visits to the Emergency Department at Stamford Hospital and the bills for such visits necessarily included the cost for attendance by physicians--is the collateral source treatment to depend on whether the physicians bill directly or whether the hospital acts as the biller and collector of payments for such services? Is the collateral source treatment of a bill from an institutional provider of medical care such as a hospital or urgent care/walk-in clinic to be treated differently depending on whether the bill explicitly recites/itemizes the charge for attention by a physician or physician assistant, or bills for a visit on an aggregate basis? Is there an implied requirement that " bundled" services be unbundled, so that the costs associated by enumerated professionals can be separated from non-enumerated professionals, e.g., must the bill for a radiologist (a physician) reading a film be separately identified so as to allow exclusion of the cost associated with the non-enumerated technician actually generating the film?
A portion of the economic damages awarded by the jury was based on the cost of an MRI performed at a radiology facility; there was no evidence presented to the court, however, suggesting any adjustment or write-off for that bill.
The court notes that the list of providers is identical to the list set forth in General Statutes § 52-174(b), identical not only as to enumerated providers but also the order in which they are recited. Section 52-174 also was amended, if modestly, by P.A 12-142; the most significant change was addition of language echoing the change to § 52-225a(b): " The calculation of the total amount of the [provider's] bill shall not be reduced because such [provider] accepts less than the total amount of the bill or because an insurer pays less than the total amount of the bill."
The only " distinction" is that in § 52-174, " physician" is modified by " treating."
Admissibility of hospital records generally does not follow the same path as other medical records; admissibility is governed by General Statutes § 4-104 (and § 52-180) and for out-of-state hospitals, § 52-180a. Therefore, to the extent that P.A. 12-142 " borrowed" language from § 52-174(b), the lack of reference to hospital bills is perhaps understandable. It is another matter to surmise that the lack of reference to hospital bills was an intended distinction.
Synthesizing all of the foregoing, the court concludes that the clarifying language added via P.A 12-142 was not intended to be exhaustive or exclusive--it was intended to clarify the law, eliminating uncertainty and ambiguity that had existed relating to treatment of write-offs. Perhaps most importantly, there is nothing in the legislative history suggesting much less establishing the remarkable proposition that by adding language to § 52-225a(b), the General Assembly was intending to change the law so as to exclude treatment of write-offs by hospitals and other medical care organizations as collateral source payments, where consideration of such adjustments clearly had been a common practice prior to P.A. 12-142.
See, e.g., Olivero v. Ferrante, J.D. Waterbury, No. CV044001161S, 2010 WL 1629993 (Conn.Super.Ct. Mar. 22, 2010) [49 Conn.L.Rptr. 520, ], where the court ruled, with respect to economic damages of $137, 424.50 (all based on hospital bills), that " [t]he fee adjustments in the instant case must be characterized as collateral source payments for which the defendants are entitled to a reduction of economic damages awarded." As a result, the net economic damages recoverable was the total of payments made by (on behalf of) the plaintiff for care (co-pays and deductibles) and the cost of procuring the insurance--essentially, the net recovery for economic damages was the amount determined as an offset to collateral source adjustments under § 52-225a(c). (Of the total economic damages of $137, 424.50, the plaintiff actually received $7, 773.10.)
To the extent that the issue remains as to whether Medicaid adjustments are subject to such treatment, numerous cases have so recognized. See, e.g., McInnis v. Hospital of St. Raphael, No. CV030480767, 2008 WL 4150056 (Conn.Super.Ct. Aug. 15, 2008) [46 Conn.L.Rptr. 176, ], relied upon by the defendants. See, also, the extended discussion of the issue in Ventura v. Town of East Haven, No. CV085024235S, 2015 WL 1588816 (Conn.Super.Ct. Mar. 13, 2015) (a case that also discusses the recent amendment to § 52-225a). (As previously noted, French also recognized that Medicaid write-offs properly were to be treated as collateral source payments.) Conversely, the court notes that the plaintiff has not cited any case that holds that Medicaid write-offs are not properly included in a collateral source adjustment.
Cases discussing Medicaid often indicate that the program is administered through insurance companies and/or managed care organizations, such that payments are being made by or through insurance companies. See, e.g., Ventura, supra, Id. at *9. (" [T]he medical providers that cared for the plaintiff were paid through Anthem by the State of Connecticut's Medicaid Program.")
As previously noted, the parties agree that the Medicaid payments themselves are subject to a lien and therefore cannot be considered collateral source payments; § 52-225a(a)(2)(A).
The court agrees with the decisions determining that Medicaid write-offs are within the scope of § 52-225a, particularly in light of the amendment and the need for consistency and certainty in treatment of this issue. (No evidence was offered concerning co-pays or other costs incurred by the plaintiff in connection with the services rendered by the hospital or procuring Medicaid coverage; see, § 52-225a(c).)
Accordingly, the court concludes that the verdict of $29, 966.85 (which had included economic damages of $19, 966.85) must be reduced by the collateral source benefits received (write-offs) totaling $16, 071.29 for a net recovery of $13, 895.56. Judgment is entered in favor of the plaintiff in the amount of $13, 895.56. (The court notes that costs already have been taxed.)
Collateral source adjustments can only be applied to economic damages, § 52-225a(a).