Wednesday, September 18, 2013

Discovering and Presenting Evidence of Overbilling in Negligence Cases

Where a Plaintiff sues for personal injuries under a theory of negligence, Florida law provides that the Plaintiff may recover for economic damages including, but not limited to, the past medical expenses incurred as a result of the subject accident. Liability for a medical expense usually arises because of a contract implied in fact - services are rendered with the expectation that the patient will pay a reasonable amount in return.  Nursing Care Services, Inc. v. Dobos, 380 So.2d 516, 518 (Fla. 4th DCA 1980). “The patient's obligation is not to pay whatever the provider demands, but only a reasonable amount.” Columbia Hosp. (Palm Beaches) Ltd. P’ship v. Hasson, 33 So. 3d 148, 150 (Fla. 4th DCA 2010) (citation omitted). “The patient is not legally bound by the provider's estimate; the patient may contest reasonableness by counteroffering to pay a lower amount.” A.I. v. State, 677 So.2d 935, 937 (Fla. 4th DCA 1996). Florida Courts have recognized that medical bills are not “binding” as such, because “[f]ees are not typically discussed at the time of treatment.” Id.

          In the context of a personal injury action, Florida Courts have recognized that a Defendant is only liable for the “reasonable value or expense” of the treatment rendered to the Plaintiff. FL. STANDARD JURY INSTRUCTIONS IN CIVIL CASES § 501.2(b).[1] Thus, while the Plaintiff’s required prima facie showing as to “reasonable value” is quite limited,[2] numerous Florida Courts have recognized that the Defendant has a right to contest the reasonableness of the Plaintiff’s past medical bills. See e.g., State Farm Mut. Auto. Ins. Co. v. Bowling, 81 So. 3d 538 (Fla. 2d DCA 2012) (Holding that court erred in excluding defendant’s billing and coding expert who presented testimony that the Plaintiff’s “medical providers fabricated or exaggerated the medical care necessary” for the Plaintiff’s alleged injuries, and that the Plaintiff’s medical bills “did not correlate to the treatment in the [plaintiff’s] medical records.”); Katzman v. Rediron Fabrication, Inc., 76 So. 3d 1060 (Fla. 4th DCA 2011) (Holding that defendant was entitled to discover and present evidence as to whether the LOP physician “has recommended an allegedly unnecessary and costly procedure with greater frequency in litigation cases,” and whether the LOP physician “overcharged for the medical services at issue in the lawsuit,” as same is relevant to the “reasonableness of the cost and necessity of the procedure.”); Columbia Hosp. (Palm Beaches) Ltd. P’ship v. Hasson, 33 So. 3d 148 (Fla. 4th DCA 2010) (Holding that defendant was entitled to discover and present evidence of hospital’s “differences in billing for litigation patients versus non-litigation patients,” as same was relevant “to dispute, as unreasonable, the amount of medical expenses that the plaintiff will seek to recover[.]”); Gulfcoast Surgery Ctr., Inc., v. Fisher, 107 So. 3d 493 (Fla. 2d DCA 2013) (Holding that “internal cost structure information” is “relevant and critical to establishing defendant’s claim of unreasonableness of charges.”); see, Also Crable v. State Farm Mut. Auto Ins. Co., 2012 U.S. Dist. LEXIS 23505, Case No. 5:10-cv-402-Oc-37TBS (M.D. Fla. 2012) (expressly recognizing affirmative defenses of “Treatment/Expense Not Medically Reasonable, Necessary and Related,” “Overbilling,” and “[M]edical records … do not sufficiently support the billing of the CPT codes submitted[.]” as valid in a personal injury action.”) 

          A cursory overview of the aforementioned controlling case law reveals that a Defendant in a personal injury action is entitled to present substantive evidence that the Plaintiff’s medical bills are not reasonable. Indeed, the Defendant may present expert testimony relating to the CPT codes employed by the Plaintiff’s medical providers, and further, may discover and present evidence that the Plaintiff’s medical providers billed and/or treated litigation patients differently than non-litigation patients. As previously noted, medical fees are generally not discussed at the time of treatment, and patients are only obligated to pay a reasonable amount for same. Precluding a Defendant, who will ultimately be held responsible for said medical bills, from contesting the reasonableness of these bills, “has the effect of providing an unnecessary windfall” to either the Plaintiff or the Plaintiff’s medical providers. Thyssenkrupp Elevator Corp. v. Lasky, 868 So. 2d 547 (Fla. 4th DCA 2003).

          In the context of personal injury litigation, where the Plaintiff is treated under a Letter of Protection, the incongruity between the amount charged and the reasonable amount is only exacerbated further. The Plaintiff has no reason to consider the amount billed, as any payment will be taken from the recovery; the provider has every incentive to overbill, as there is no patient (or insurance company) to contest the reasonableness of the charges. Florida Courts have recognized this problem, and have begun addressing same head on. Thus, in Columbia Hosp. (Palm Beaches) Ltd. P’ship v. Hasson, 33 So. 3d 148 (Fla. 4th DCA 2010), the Fourth District held that information relating to a Third Party Hospital’s cost structure was clearly relevant in a personal injury case: “what a health care provider accepts as payment from private non-litigation payors is relevant for a jury to determine what amount is a reasonable charge for the procedure.” Id. at 149. In footnote 3 of its opinion, the Court poignantly observed the following:

As Defendants assert, a hospital’s cost to provide a service no longer bears much relationship to what it charges, but reimbursement rates from third party payors give hospital an incentive to set their usual charges at an artificially high amount, from which discounts are negotiated; cost-shifting results in discriminatorily high charges to uninsured patients, in that every patient is billed at full charges, but only the uninsured are expected to pay those amounts; as a result, actual charges are not instructive on what is reasonable; instead, Defendants argue, a realistic amount is what hospitals are willing to accept.

          As the aforementioned information is relevant to legitimate affirmative defenses (and, indeed, critical to a fair adjudication of the value of the services rendered to the Plaintiff), absent a privilege, these materials are discoverable. Fla. R. Civ. P. 1.280 provides, in relevant part:

(b) Scope of Discovery. Unless otherwise limited by order of the court in accordance with these rules, the scope of discovery is as follows:
(1) In General. Parties may obtain discovery regarding any matter, not privileged, that is relevant to the subject matter of the pending action, whether it relates to the claim or defense of the party seeking discovery or the claim or defense of any other party, including the existence, description, nature, custody, condition, and location of any books, documents, or other tangible things and the identity and location of persons having knowledge of any discoverable matter. It is not ground for objection that the information sought will be inadmissible at the trial if the information sought appears reasonably calculated to lead to the discovery of admissible evidence.

[1] Specifically, § 501.2(b) provides that a personal injury Plaintiff may recover:

The reasonable [value] [or] [expense] of [hospitalization and] medical [and nursing] care and treatment necessarily or reasonably obtained by (claimant) in the past [or to be so obtained in the future].

[2] See e.g., Garrett v. Morris Kirschman & Co., 336 So. 2d 566 (Fla. 1976) (Holding that lay testimony by the Plaintiff that medical bills were incurred was sufficient evidence to support a jury award).