Opinion
Case No. C2 03-889.
February 27, 2006
OPINION AND ORDER
This matter is before the Court for consideration of defendants' pending motions in limine. Doc. Nos. 34, 35. For the reasons that follow, defendants' motions are DENIED.
I. Defendants' Motion to Exclude Evidence of Plaintiff DeWayne L. Sutton's Gross Medical Expenses
Defendants move to exclude as evidence of damages the gross medical expenses billed to plaintiff DeWayne L. Sutton. Doc. No. 34. Defendants argue that plaintiffs "are not the real parties in interest for the amounts paid by Medicare on behalf of Mr. Sutton." Id. at 2. In addition, defendants contend that the gross medical expenses of Mr. Sutton are not reasonable evidence of the amount actually paid by Medicare and, thus, are not the proper measure of compensatory damages in a tort action. Id. at 4. Defendants' arguments are not well-taken.
At points in their motions in limine, defendants refer to "Medicare" and at other points to "Medicaid." Plaintiffs, however, refer consistently to Medicaid and the law cited by defendants is law related to Medicaid. Thus, it appears to the Court that the entity that paid the medical expenses is Medicaid. However, although Medicare and Medicaid are entirely different programs, in the context of the Court's ruling on these motions in limine, the distinction is insignificant.
A. Plaintiff DeWayne L. Sutton is a proper party to bring this action.
Defendants argue that the "Ohio Department of Human Services (ODHS) is the real party in interest where Medicare [sic] pays the medical expenses of a patient." Id. at 3. Defendants then conclude that because ODHS is the real party in interest, plaintiffs may collect as damages any monies paid by Medicaid. Defendants, however, are mistaken.
Medicaid, as a real party in interest, has a statutory subrogation right to seek reimbursement for medical expenses that it paid on behalf of plaintiff DeWayne L. Sutton from any recovery Mr. Sutton may recover as a result of the instant action. O.R.C. § 5101.58 in relevant part provides:
When an action or claim is brought against a third party by a public assistance recipient or participant, the entire amount of any settlement or compromise of the action or claim, or any court award or judgment, is subject to the recovery right of the department of job and family services or county department of job and family services.
. . . .
To enforce their recovery rights, the departments may do any of the following:
(A) Intervene or join in any action or proceeding brought by the recipient or participant or on the recipient's or participant's behalf against any third party who may be liable for the cost of medical services and care arising out of the recipient's or participant's injury, disease, or disability;
(B) Institute and pursue legal proceedings against any third party who may be liable for the cost of medical services and care arising out of the recipient's or participant's injury, disease, or disability;
(C) Initiate legal proceedings in conjunction with the injured, diseased, or disabled recipient or participant or the recipient's or participant's legal representative.
Thus, Medicaid could have initiated a lawsuit on its own behalf against defendants, initiated a lawsuit on behalf of Mr. Sutton, intervened in this action or simply chosen to enforce its subrogation right against any settlement made, or judgment obtained, by Mr. Sutton. Consequently, and contrary to defendants' position, O.R.C. § 5101.58 expressly recognizes that Mr. Sutton is a proper party to bring an action to recover damages for medical bills paid by Medicaid, and that, in that event, any recovery by Mr. Sutton is subject to the statutory subrogation right of ODHS.
B. Plaintiff DeWayne L. Sutton's medical bills are admissible.
1. Medicaid payments are collateral source payments.
It is an uncontroverted fact that Medicaid, by virtue of its bargaining power, does not pay the full value of the medical expenses billed to a patient and that the medical providers commonly "write off" the portions not paid by Medicaid. Thus, defendants contend that Mr. Sutton's gross medical expenses (those billed by the medical providers) should not be admitted as evidence of the proper measure of compensatory damages in this case. Defendants' argument is not well-taken.
The Court agrees with defendants that Mr. Sutton's gross medical expenses may not reflect the amount Medicaid actually paid; however, the gross medical expenses may be the proper measure of compensatory damages in this tort action. Although defendants are correct that the general rule in tort actions is that the measure of a plaintiff's damages is that which will make him whole, i.e., the amount that Mr. Sutton actually paid for his medical expenses, the collateral source rule provides an exception to this general rule:
Substantively, the collateral source rule is an exception to the general rule in tort actions that the measure of the plaintiff's damages is that which will make her whole. Through this exception, the plaintiff is allowed to receive more than the amount of damages she actually incurred. The rationale for the exception to the general rule is that benefits the plaintiff receives from a source wholly independent of the wrongdoer should not benefit the wrongdoer by reducing the amount of damages which a plaintiff might otherwise recover from him. [ Pryor v. Webber, 23 Ohio St.2d 104, 107 (1970)]. Klosterman v. Fussner, 99 Ohio App.3d 534, 538 (Montgomery County 1994).
Further, the Ohio Supreme Court has reaffirmed its earlier holding in Pryor, supra, when it which struck down O.R.C. § 2317.45, as enacted as part of the Tort Reform Act of 1987, and as amended by Am.Sub. H.B. No. 350, both of which sought to reduce a plaintiff's jury award by the amount of any collateral benefits.
The collateral source rule is an exception to the general rule of compensatory damages in a tort action, and evidence of compensation from collateral sources is not admissible to diminish the damages for which a tort-feasor must pay for his negligent act.Ohio Academy of Trial Lawyers v. Sheward, 86 Ohio St.3d 451, 479 (1999); Sorrell v. Thivenir, 69 Ohio St.3d 415, 415 fn.2 (1994). Moreover, two 2005 Ohio cases are directly on point:
Ohio law prohibits the introduction of evidence of benefits from collateral sources. The collateral source rule has been defined as "the judicial refusal to credit to the benefit of the wrongdoer money or services received in reparation of the injury caused which emanates from sources other than the wrongdoer." Pryor v. Webber (1970), 23 Ohio St.2d 104, 107, 263 N.E.2d 235, quoting Maxwell, The Collateral Source Rule in the American Law of Damages, 46 Minn. L.Rev. 669, 670. The rationale supporting the rule is that "the defendant wrongdoer should not, it is said, get the benefit of payments that come to the plaintiff from a `collateral source' ( i.e., `collateral' to the defendant)." Id. at 108.
. . . .
A collateral benefit is a benefit received outside the scope of the litigation. In this case, Medicare is a source outside of the litigation that covered [the plaintiff's] medical care; [the plaintiff] accrued medical expenses that were billed as a result of an injury she suffered that served as the subject of her complaint against [the defendants]. Thus, any benefit that [the plaintiff] received by virtue of being covered by Medicare was outside of the scope of the lawsuit, or "collateral" to the litigation.Ferrell v. Summa Health Sys., 2005 Ohio 5944, *PP 7-9, 2005 Ohio App. LEXIS 5356, *4 (Summit County Nov. 9, 2005). In reversing the trial court, Ferrell held that the trial court had improperly considered evidence of the benefits the plaintiff received from a collateral source. Ferrell relied on Robinson v. Bates, 160 Ohio App.3d 668 (Hamilton County 2005), which also reversed a trial court and held that the plaintiff's gross medical bills should have been admitted to the jury without regard to the fact that her insurance company had paid a portion of the bills and that the portion actually paid by the insurance company was less than the amount billed. The Robinson court explained:
Although the collateral source in this case was Medicare, the Court concludes that the reasoning in the case is equally applicable to collateral source payments made by Medicaid. See Lugli v. Herschler, 1998 Ohio App. LEXIS 4345 (Huron County Sept. 18, 1998) (Medicaid and welfare benefits are collateral source benefits).
But this case goes beyond just whether Robinson's proffered medical bills were admissible. Negotiated and contracted discounts on medical bills between healthcare providers and insurers are increasingly prevalent. Under these agreements, an insurer's liability for the medical expenses billed to the insured is often satisfied at discounted rates, with the remainder being "written-off" by the health-care providers.Id. at 677.
Like the plaintiffs in Ferrell and Robinson, Mr. Sutton is permitted to introduce as evidence of his damages the documents showing the gross medical expenses without regard to any collateral source payment even though the collateral source payment was less than the medical expense documents indicate.
2. The gross medical bills are evidence of the necessity and reasonableness of the medical services provided to Mr. Sutton.
Both parties agree that, if the jury finds for plaintiffs, Mr. Sutton would be entitled to recover the reasonable value of the necessary medical services he received. The medical bills Mr. Sutton seeks to introduce constitute prima facie evidence of the necessity and reasonableness of the charges for medical services. Wagner v. McDaniels, 9 Ohio St.3d 184, paragraph one of the syllabus (1984) ("Proof of the amount paid or the amount of the bill rendered and of the nature of the services performed constitutes prima facie evidence of the necessity and reasonableness of the charges for medical and hospital services."). O.R.C. § 2317.421 provides that
In an action for damages arising from personal injury or wrongful death, a written bill or statement, or any relevant portion thereof, itemized by date, type of service rendered, and charge, shall, if otherwise admissible, be prima-facie evidence of the reasonableness of any charges and fees stated therein for medication and prosthetic devices furnished, or medical, dental, hospital, and funeral services rendered by the person, firm, or corporation issuing such bill or statement, provided, that such bill or statement shall be prima-facie evidence of reasonableness only if the party offering it delivers a copy of it, or the relevant portion thereof, to the attorney of record for each adverse party not less than five days before trial.
Thus, Mr. Sutton is permitted to present the itemized medical bills as evidence of the necessity and reasonable value of the medical services. Defendants may, of course, present competent evidence that the charges were not reasonable and necessary; however, that evidence may not take the form of the amount paid by a collateral source such as Medicaid or an insurance carrier. See Klosterman, 99 Ohio App.3d at 538-39 ("As an evidentiary rule, the collateral source rule bars the introduction into evidence of collateral payments to the plaintiff in order to prevent the jury's consideration of such payments in determining the amount of damages.") (citing Pryor, 23 Ohio St.2d at 109).
II. Defendants' Motion to Exclude Statements Made by Defendant Brenda F. Jones, M.D., Regarding Payment of Plaintiff DeWayne L. Sutton's Medical Expenses
Defendants also move for an order to exclude as evidence statements made by defendant Brenda F. Jones, M.D., regarding her offer to pay portions of plaintiff DeWayne L. Sutton's medical expenses. Doc. No. 35. Prior to filing this action, plaintiffs tape recorded a conversation between themselves and Dr. Jones during an office visit. In that conversation, Dr. Jones offered to assist plaintiffs in paying Mr. Sutton's medical expenses by paying the portion of the expenses not paid by Medicaid. However, during her deposition Dr. Jones testified that she did not make such an offer.
Defendants contend that admission of the statements recorded by plaintiffs would be unfairly prejudicial to defendants because the jury could infer that the statements constitute an admission of guilt. Further, defendants assert that the statements would be misleading to the jury, directing their focus from the medical and legal facts to improper inferences. Thus, defendants move to exclude these statements pursuant to Rule 403 of the Federal Rules of Evidence, which provides:
Although relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence.
In response, plaintiffs argue that they do not intend to offer the statements as proof of negligence or as an admission of guilt, but instead, simply as evidence of the reasonableness and necessity of the medical services billed to Mr. Sutton and for the purposes of impeachment of Dr. Jones. Plaintiffs contend that any potential prejudice to defendants or confusion of the jury can be alleviated by a limiting instruction to the jury. The Court agrees.
"There is a strong presumption that relevant evidence should be admitted, and thus for exclusion under Rule 403 to be justified, the probative value must be `substantially outweighed' by the problems in admitting it." Coleman v. Home Depot, Inc., 306 F.3d 1333, 1343-44 (3d Cir. 2002). If the probative value and the prejudicial value are equal, or "when the trial judge is in doubt, Rule 403 requires admission (this is the force of `substantially outweighed'); and when the appellate judges are in doubt, a proper regard for the comparative advantages of trial and appellate judges counsels us to uphold the trial judge's application of the rule." United States v. Krenzelok, 874 F.2d 480, 482-83 (7th Cir. 1989).
Thus, the Court concludes that the probative value for which plaintiffs intend to offer the statements is not substantially outweighed by the danger of unfair prejudice or confusion of the issues. Defendants have expressed no concerns about the authenticity of the recording. The concerns articulated by defendants can adequately be addressed by a limiting jury instruction, which the Court invites the parties to propose.
WHEREUPON, in light of the foregoing, defendants' motion to exclude plaintiff DeWayne L. Sutton's gross medical expenses, Doc. No. 34, and defendants' motion to exclude the statements of defendant Brenda F. Jones, M.D., Doc. No. 35, are both DENIED.