Opinion
C.A. No. 01-03-260-CLS.
Date submitted: March 9, 2005.
Date decided: March 10, 2005.
Upon Consideration of Plaintiff's Motion to Exclude Testimony Regarding Medicare or Medicaid Reimbursements or Writeoffs.
DENIED.
Edmund Daniel Lyons, Esquire, Wilmington, Delaware, Attorney for Plaintiff.
William J. Cattie, III, Esquire, Rawle Henderson, LLP, Wilmington, Delaware, Attorney for Defendant/Third-Party Plaintiff.
Kevin J. Connors, Esquire, Marshall Dennehey Warner Coleman Goggin, Wilmington, Delaware, Attorney for Third-Party Defendant.
Before this Court is a Motion in Limine filed by Plaintiff. The issue this Court must decide is whether Plaintiff may introduce evidence of the full amount of his medical expenses even though his health care providers wrote off a portion of the charges pursuant to their agreements with Medicare. The Court has reviewed the Motions and Responses, and is prepared to render its decision.
Facts
This case involves burns suffered by Plaintiff, an incompetent adult, while he was under the care of Chimes. The incident occurred in Cavalier Apartments, owned by Defendant Cavalier Group. As a result of the burns, Plaintiff received medical treatment by Crozer-Chester Hospital ("Crozer"), and Parkview Nursing Home ("Parkview"). The amounts paid and written-off for the medical services are at the heart of this Motion.
The total bill for Crozer's medical services was $883,000.00. The total bill for Parkview's services was $77,000.00. Plaintiff is eligible for both Medicaid and Medicare. Medicare paid $59,000 towards Crozer's bill. The remaining $824,000 was written off by the hospital pursuant to 42 U.S.C.A. § 1395cc-2(a)(8)(A). In addition, Medicaid paid $60,000 for Parkview's bill. The remaining $17,000 was written off pursuant to 42 C.F.R. § 447.15.
42 U.S.C.A. § 1395cc-2(a)(8)(A) states "[e]xcept as provided in subparagraph (B), an individual or entity receiving payment from the Secretary under a contract or agreement under the demonstration program shall agree to accept such payment as payment in full, and such payment shall be in lieu of any payments to which the individual or entity would otherwise be entitled under this subchapter."
42 C.F.R. § 447.15 requires that "[a] State plan must provide that the Medicaid agency must limit participation in the Medicaid program to providers who accept, as payment in full, the amounts paid by the agency plus any deductible, coinsurance or copayment required by the plan to be paid by the individual."
Parties' Contentions
Plaintiff contends that the entire amount of hospital bills, $960,000, should be recoverable under this court's ruling in Pardee v. Suburban Propane. In Pardee, the court held that the collateral source rule enabled plaintiffs to recover the full amount of medical bills even where the balance of the medical bills was written off.Conversely, Chimes and the Cavalier Group rely on Moorhead v. Crozer-Chester Medical Center for the proposition that because a write-off is never actually paid, it should not be recoverable under the collateral source rule. This Court agrees.
765 A.2d 786 (Pa. 2001).
Discussion
It is not disputed by either party that Medicare or Medicaid payments are collateral sources. The dispute, however, is to the amount that would fall under the collateral source rule and be recoverable by Plaintiff. The collateral source rule, a product of common law, states that "`a tortfeasor has no right to any mitigation of damages because of payments or compensation received by the injured person from an independent source[.]'"
Pardee, 2003 WL 21213413 at *1 (citing Yarrington v. Thornburg, 205 A.2d 1, 2 (Del.Supr. 1964)).
This Court finds that the collateral source rule is inapplicable to the amounts written-off by Crozer and Parkview because the rule "does not apply to write-offs of expenses that are never paid." Here, the collateral source rule does not apply to the "illusory `charge'" of $841,000 since that amount was not paid by any collateral source. Accordingly, "`healthcare debt is simply extinguished by operation of law when the healthcare provider elects to accept payment of assigned benefits directly from . . . Medicare.'" "Because a write-off is never paid, it cannot possibly constitute payment of any benefit from a collateral source." As a result, Plaintiff may recover only the $119,000 that was paid to Parkview and Crozer by Medicare.
Wildermuth v. Staton, 2002 WL 922137 *5 (D. Kan.).
Moorhead, 765 A.2d at 791.
Id.
Wildermuth, 2002 WL 922137 at *5.
Id.
In addition, awarding Plaintiff an amount above those fees which were paid by Medicare to Crozer and Parkview would result in "a windfall and would violate fundamental tenets of just compensation." Plaintiff never has and never will incur the remaining expenses from Crozer and Parkview. By receiving $119,000, Plaintiff will be made "whole" in accordance with the goal of compensatory damages.
Moorhead, 765 A.2d at 790.
Defendant/Third-Party Plaintiff Chimes argues that Delaware's statutory exception to the collateral source rule, 18 Del. C. § 6862, is applicable and would allow the jury to see public collateral sources in determining the amount Plaintiff may recover. Eighteen Del. C. § 6862 states in pertinent part:
[i]n any medical negligence action for damages . . . there may be introduced . . . (1) [a]ny and all facts available as to any public collateral source of compensation or benefits payable to the person seeking damages (including all sums which will probably be paid payable to such person in the future) on account of such property damages or bodily injury; and (2) any and all changes, including prospective changes, in the marital, financial or other status of any persons seeking or benefiting from such damages known to the parties at the time of trial. . . .
In order for collateral sources to be introduced to the trier of fact under § 6862, the action must be one in medical negligence. Medical negligence, as defined by 18 Del. C. § 6801(7), is "any tort or breach of contract based on health care or professional services rendered, or which should have been rendered, by a health care provider to a patient." A health care provider is "a person, corporation, facility or institution licensed by this State pursuant to Title 24, excluding Chapter 11 thereof, or Title 16. . . ."
This action before the Court is not a medical negligence case. Medical negligence cases require that the tort be based on health care services rendered. In analyzing whether Chimes was a nursing facility or similar facility licensed under Title 16, the Court reviewed the case file and its pleadings. In a response to a motion to compel filed by the State, the State indicates, "[t]he facility where the incident in question occurred is licensed under 16 Del. C. Ch. 11." Chimes also initially indicated it was licensed by the State but corrected this fact in a subsequent office conference. Similarly, Cavalier is not a licensed health care provider. The Court, therefore, concludes that neither Chimes nor Cavalier were licensed health care providers.
Therefore, Plaintiff is entitled to board the amount of $119,000. Any other evidence of Medicare or Medicaid payment is inadmissible.