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I just got through reading, with considerable interest, an article in amednews.com, published by the American Medical Association. The article offers a somewhat biased report of a current case pending before the Ohio Supreme Court. At issue is the so-called “collateral source rule”, which, in Ohio and many other states, precludes defendants from introducing evidence that medical bills have been reduced by payments from the plaintiff’s health insurance provider.

The article refers to “jackpot jury awards" and the “frustration” they cause to physicians. It indicates that doctors hope that the Ohio Supreme Court will use this case to “prevent those awards from mounting unfairly”.

The reader would think, from this introduction, that the case before the Ohio Supreme Court is a multi-million dollar medical malpractice verdict and that the guilty doctor thinks the jury gave him a raw deal. Surprisingly, it is not a multi-million dollar malpractice verdict. In the case at issue, an auto accident case, the jury’s verdict was a whopping $25,000. Doctors have now sunk so low in their relentless quest for “tort reform” that until they receive almost complete immunity from malpractice lawsuits, the AMA will consider even a modest $25,000 verdict to be a “jackpot jury award”.

The case at issue results from a clear liability automobile accident that occurred in 2005. A lady by the name of Patricia Manton ran a stop sign and collided with Richard Jaques’ vehicle. Apparently, liability was admitted and the case was tried in 2008, on damages only. As evidence of the damages he suffered, Mr. Jaques presented to the jury, all of his medical bills for treatment rendered for his injuries; the aggregate bills were, approximately, $22,000. The defense challenged this presentation, indicating that Jaques’ health insurance company persuaded the various health care facilities to accept only $7,500 as full payment for all services provided. The defense argued that presenting the $22,000 number to the jury rather than the $7500 number was “unreasonable”.

The trial court disagreed and the jury considered the full amount of the bills; Jaques aggregate award was $25,000. Does anyone out there consider this award to be a “jackpot”?! Considering that this jury was presented with $22,000 in medical bills, the award means that the plaintiff only received $3,000 for pain and suffering or wage loss or both.

The reason that the trial court permitted introduction of the entire bill is because of Ohio’s version of the “collateral source rule”, mentioned above. Under the rule, which applies to most, if not all, personal injury cases, defendants are not permitted to argue that medical bills were paid by another (collateral) source, like the plaintiff’s private health insurance carrier. Why does the AMA care about this? Probably because the rule applies to medical liability (malpractice) actions, as well.

The defendant demanded a new trial; the trial court denied this request and the case was appealed to the Court of Appeals. I won’t bore the reader with the technical goings on at the appellate level; suffice it to say that the plaintiff, for a variety of reasons, prevailed, and the case is now pending before the Ohio Supreme Court.

The “physician community” as the article refers to doctors, is quite upset about the appellate court ruling. It prohibits the introduction of any amount that a doctor accepts because of a contractual relationship with a health insurance company. Again, the "community" is not upset because of any fundamental unfairness resulting from the case; the plaintiff only received a $25,000 judgment on $22,000 in presented medical bills. The doctors are upset because the ruling, if it stands, will apply to all personal injury cases, including medical malpractice cases. They are upset because the ruling might, some day, hit a doctor, squarely in the pocket book.

Doctors apparently feel that since they contractually agree to accept less in payment from a health insurance company (for whatever business reason), the plaintiff receives a “windfall” if the entire bill is considered by the jury. Of course, this ignores the reality that the health insurance company may have a right to reimbursement from the plaintiff out of any award he receives. In the Jaques case, that reimbursement could be as much as $7,500. Considering that attorney fees and litigation costs are also part of that $25,000 award, that does not leave much for Mr. Jaques, does it? So much for the “jackpot jury award” concern.

Insurance companies, their adjusters and attorneys, like to use medical bills as a multiplier to calculate total case value for settlement purposes. This is an archaic approach, but the argument is that if the “multiplier” considers the full bill, rather than the reduced bill, the plaintiff gets an additional “windfall”. But, this approach ignores reality; juries don’t use these multipliers; look at the result for poor Mr. Jaques: He received less than $3,000 over the total of his medical bills; this is less than the total bills, after attorney fees and costs are computed. His net verdict only pays for medical expenses. It does not seem to put a single dollar in his pocket.

It also ignores the fact that insurance policy limits are, more often than not, far lower than any significant multiplier. The average policy holder in the United States, drives around with somewhere between $10,000-$25,000 policy limits for liability coverage, which serves as a practical “cap” for settlement of most auto accident cases. The average American is not collectible beyond his/her insurance policy limits. Policy limits have always been the “original” tort reform. Today, big insurance, big pharma, big medical, and big business (represented by the U.S Chamber of Commerce) is not satisfied with the average screwing that the plaintiffs receive because of low policy limits; they want to reform the system to prevent any sizable recovery in any case, regardless of how egregious the conduct or how severe the injury. And, the public seems unwilling to challenge them on it.

Not surprisingly, Ohio plaintiff attorneys have rallied in support of the collateral source rule in their state. Their basic position? Why should the plaintiff be penalized because of a contract that a physician has with a health insurance carrier that the plaintiff has no interest in and receives no benefit from? Why should the wrongdoer benefit from the discount and not the plaintiff? Shouldn’t the defendant, the person who caused the accident in the first instance, pay the reasonable value of services rendered as compensation? What a physician chooses to accept in reasonable compromise for the guarantee of payment from insurance proceeds should not impact a plaintiff’s right to full value compensation. Besides, argues the plaintiffs’ attorneys, the collateral source rule benefits the physician; the more the plaintiff receives for medical bills, the more the physician receives if there is an outstanding balance at the end of the case.

Arguing in opposition to the collateral source rule also penalizes plaintiffs who have health insurance. According to Frank Todaro, a Columbus, Ohio plaintiff attorney and past president of the Ohio Association for Justice (OAJ):

"That fully insured person would recover less money than the person who had no health insurance coverage and no reduction" in medical bills…”

Due to a concern for potential inequity resulting from the appeal, a bill has been introduced in the Ohio legislature that would create the presumption that the originally billed charges are the reasonable value of the medical services rendered. Fee reductions or waivers would not be admissible in court under the proposed legislation. The doctors are, for some strange reason (its application to medical malpractice litigation?), opposed to this legislation. Both the bill and the case before the Supreme Court are still pending.

This case and the arguments in opposition to the collateral source rule are clear examples of the absurdity of what is currently being touted as “tort reform”. As this case clearly demonstrates, there is rarely “jackpot justice”; there is no need for judicial reform. The call for these types of reforms are the result of big corporate and big insurance greed; these Goliaths are not satisfied with practical restrictions on the typical plaintiff’s recovery. Policy limits caps are not enough; corporate concerns want to trample on our rights and eliminate an injured plaintiff’s right to simple, civil justice in all cases.

Lawsuit Financial will continue to use this forum to point out these outrageous attacks on our civil justice system; don’t buy into these ridiculous claims of “jackpot justice”. Certainly, some plaintiffs receive “justice”; they rarely, if ever, receive a “jackpot”. And, when or if a plaintiff receives a large verdict, it is usually the result of catastrophic, life-altering injuries and/or disabilities. If you live in Ohio, contact your state legislator and express support for this important legislation.

One Comment

  1. Gravatar for Mike Bryant

    So the bills are charges from the medicle providers? Correct. So they set the amount? Correct.

    The person was responsible or at least fortunate to have health insurance. So the bills were paid to the medical institution that set the amount? So the provider was paid and is now complaining about it? WOW

    What would the bill have been without the coverage? Yep, you know the answer: the whole amount and wouldn't be paid. So would they be complaining about that?

    But let's look beyond that. The medical provider had a contract with the Health insurance company and benefit from the money that brings in with more people. They still complain.

    Finally, are they really involved in this case? No, it's a attempt to stop people from collecting in other cases. Looks to me like someone is trying to get a windfall.

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