Defense attorneys, along with our partners in the defense industry, are constantly trying to overcome and outwit some “new” strategy conceived by the plaintiff’s bar to increase their verdict potential by limiting the full disclosure of relevant information to the jury. Until 2009, one such strategy was to attempt to limit what the jury could know about a plaintiff’s medical specials, arguing that only the full amount of a medical bill should be admitted and considered. These inventive attorneys sought to tip the scales by arguing that reduced amounts accepted by medical providers were not consistent and, therefore, not relevant in determining a “reasonable value.” Trial court judges all over the state were entering orders that, irrespective of the amount actually received by a medical provider from a plaintiff’s medical insurer, the jury would only learn about the amount of the gross charges in determining this element of damages. These jurors would never hear that the medical provider had negotiated an agreement with the health insurer and would accept $2,000.00 in full satisfaction of a $3,000.00 epidural steroid injection. The fact that the additional $1,000.00 originally billed for the injection was simply “written off” and would never have to be repaid by the plaintiff was simply overlooked.
Because not all trial judges agreed on how to rule on these Motions to Limit, there was confusion and different outcomes from court to court. Then in 2009, the Supreme Court issued its holding in the case of Stanley v. Walker, 906 N.E.2d 852 (Ind. 2009), and determined that both the billed and accepted amounts were relevant to the jury’s determination of medical damages. Although the plaintiff could continue to black-board the gross amount of the bill and argue that it represented the “reasonable value,” the defendant could black-board the reduced or adjusted amount. With both sets of numbers, the jury would then be allowed to fulfill its duty of determining the reasonable value of medical expenses.
After the Stanley decision was issued and defense attorneys all over the state were presenting the “Stanley number” to juries, the plaintiff’s bar quickly moved to their next strategy for limiting the information jurors had available to determine reasonable damages. This time, counsel attempted to narrow the holding of Stanley in cases involving Medicare, Medicaid and similar programs. Again filing Motions to Limit and preclude the introduction of adjustments and reductions, plaintiffs argued that there was no “agreement” between medical providers and Medicare and, therefore, the basis for the Court’s decision in Stanley was not applicable. Instead, without the benefit of a “negotiation” with medical providers, Medicare simply determines the amount it will pay for a given medical service. If the provider wants to treat Medicare patients, then that provider will accept the Medicare “rate,” almost always resulting in a significantly reduced/adjusted final bill.
Plaintiffs argued that the Medicare number could not represent a “reasonable value” of medical expenses because that number had not been subject to any negotiation, resulting in widely disparate, unpredictable, and uneven results even in cases from the same venue and with identical injuries. For instance, in a standard case involving a plaintiff who sustained whiplash, his orthopedic bill might be reduced from $1,000.00 to $800.00 based on the agreement between his health insurer and the orthopedic surgeon. That same surgeon, however, treating a plaintiff who is on Medicare might be “forced” to reduce his bill to $100.00, because that is all Medicare will pay. For years, plaintiff’s counsel successfully argued before many sitting trial court judges across the state that the holding of Stanley v. Walker simply did not apply in Medicare cases because of the lack of any negotiation and the wide discrepancy between damage values that would result.
Then in 2016, the Court issued its holding in Patchett v. Lee, 60 N.E.3d 1025 (Ind. 2016), and determined that the same arguments and reasoning that applied in Stanley, also applied in Patchett and other Medicare cases. Although there was no official “negotiation” between Medicare and a healthcare provider, the provider did make the decision to accept Medicare patients, thereby agreeing to Medicare’s payment schedule. Also, because it is the duty of the jury to determine the “reasonable value” of medical expenses and to compensate an injured plaintiff rather than provide him with a windfall (the amount adjusted/waived by the provider did not have to repaid to the provider), the amount of the final medical bill, as well as the gross bill, was still relevant to the jury’s determination.
Not willing to accept defeat, the plaintiffs’ bar, again, wasted no time in developing a new strategy to limit consideration of relevant defense evidence. This time, in those cases where there had been significant reductions/adjustments due to Medicare or where there was simply limited medical treatment, the plaintiffs next attempted to limit the presentation of any medical bills to the jury, originally billed or adjusted. Although a plaintiff would testify about the injuries sustained, no testimony was elicited by his counsel regarding his medical treatment, no doctors were called to testify about diagnosis, prognosis or medical care, and no bills were introduced. Instead, the plaintiff would describe the injury and then testify about his pain and suffering, basing his request for a large plaintiff’s verdict on this unanchored element.
Indiana law entitles an injured person to “reasonable compensation” after suffering an injury based on the negligence or fault of another. Unfortunately, when a case proceeds to trial (and when attempting to determine case value), the Model Civil Jury Instructions provide limited guidance to jurors seeking to quantify an injury and fix a reasonable value to compensate the plaintiff.
Charged with placing a reasonable value on an injury or injuries, jurors look to counsel to steer them towards an amount that fits their own concept of fair and reasonable compensation based on the facts and evidence presented. In other words, jurors look for “anchors” provided by counsel as, at a minimum, a starting point for the value that they may assign to an injury, adjusting that anchor based on the evidence presented and how they feel about the parties involved.
Of course, one such anchor has always been the amount of medical specials incurred by a plaintiff for care related to the injury. Where a plaintiff’s bills are significantly reduced or there may be limited treatment for a myriad of reasons, the anchors provided by counsel might result in a verdict considerably lower than what the plaintiff asked the jury to award. In response, many plaintiffs started to intentionally exclude the introduction of any evidence of the plaintiff’s past medical specials and stopped asking for compensatory damages for these amounts. Instead, left untethered, the plaintiff’s attorney would assign a high-dollar amount for the “severe” pain and suffering caused by the injury and seek extreme verdicts in cases with relatively low medical expenses. Then, taking matters even further, these same attorneys would seek to prevent defense counsel from introducing evidence of the past medical bills (with and without adjustments), arguing that such evidence was not relevant to the case presented by the plaintiff.
Many trial courts granted these Motions. Even in those cases where the Motion to Limit the introduction of any past medical specials was denied, however, if the defense counsel was unaware of the strategy and did not independently do the necessary work to get the issue before the jury, i.e. name the correct witnesses to introduce the evidence or identify the necessary exhibits, the Court was often forced to preclude the admission of past medical specials by defense counsel because Court deadlines to name witnesses and experts and identify exhibits had already passed. Thus, defense counsel had/has to consider the possibility that she might need to prove this element of damages from the very beginning of the case, issuing written discovery designed to determine the exact elements of damage that are going to be presented during trial, requesting documents to determine the extent of care provided to the plaintiff (not necessarily for the purpose of proving past medical expenses, but alternatively for the purpose of showing a lack of pain and suffering), questioning the appropriate witness on specific medical treatment and the cost of the same. Often a treating physician have little or no knowledge of the billing practices of his medical group and a billing specialist would also have to be called. No longer could defense counsel simply rely on cross-examination to present the “reasonable value of past medical expenses” to the jury, and she would have to work to prove this element with different (and new) written discovery and new/different questions during the plaintiff’s deposition.
Of course, even if defense counsel obtains and is able to present evidence of past medical expenses to the jury, the judge may decide to grant the plaintiff’s motion to exclude, ruling that evidence of past medical bills is simply not relevant because it was not part of the plaintiff’s claim. Although a handful of other states have decided this issue (Montana, Mississippi, Maryland), Indiana only just last week weighed in.
On March 24, 2021, the Court of Appeals rendered a landmark decision in a case of first impression involving the question of whether the plaintiff can hide evidence of past medical bills from the jury by claiming that they are not seeking recovery on that element of damages. In a unanimous decision, Judge Bradford and his colleagues held that medical bills can be admissible, even in cases where plaintiffs do not seek recovery for those bills and do not introduce them to the jury.
In Gladstone v. West Bend Mutual Insurance Company, 2021 W.L.1113900 (Ind. Ct. App. 2021), Gladstone appealed the decision of Lake Superior Court Judge Bruce Parent allowing, over objection, the introduction of evidence that plaintiff had been billed $14,000 for past medical treatment, but paid just under $2,000 after adjustments, insurance payments and write-offs.
The case arose from a motor vehicle accident in December of 2016. The plaintiff sustained a number of injuries, including a fractured wrist which required him to wear a cast and undergo physical therapy until March of 2017. Not surprisingly, the relatively minor medical treatment was reflected in relatively low medical bills. Plaintiff sued the driver for negligence in causing the accident and later amended the Complaint to name his own insurer, West Bend Mutual Insurance Company, to assert a claim for underinsured motorist benefits. The tortfeasor-driver tendered her $50,000 limits, and was then dismissed by agreement of the plaintiff and West Bend.
Prior to trial, plaintiff moved to exclude evidence of his medical bills claiming he was not seeking medical expenses. Instead, he only sought damages for pain and suffering. The trial court denied the Motion to Exclude and the parties went to trial on the balance of West Bend’s UIM policy limit totaling $200,000, after the set-off for the $50,000 paid by the Tortfeasor. Over objection, West Bend was allowed to present evidence of the plaintiff’s medical bills.
As this was a “case of first impression”, Judge Bradford and the Court looked to case law from outside Indiana to see how sister States had addressed the issue. The Court began by noting that Indiana Rule of Evidence 401 provides that “evidence is relevant if it has any tendency to make a fact more or less probable than it would be without the evidence.” The Court noted this is a “low bar” for the admission of evidence. Judge Bradford specifically stated that “common sense and experience dictate that a more serious injury generally brings with it greater medical expenses as well as greater pain and suffering.” The Court also quoted a Justice of the Supreme Court of Pennsylvania in dissent, who stated that “medical expenses are routinely considered by both attorneys and insurance companies in negotiating settlements, and that Appellate Courts routinely look at medical expenses as a factor in determining whether the non-economic portion of a damage award is appropriate. The Court declined to accept Gladstone’s argument to adopt a “bright line” rule that evidence of medical bills is never admissible on the grounds of relevance when the recovery for those medical bills is not sought by the plaintiff.
The Court next addressed West Bend’s argument that if the bills are low as they were in Gladstone’s case, the pain and suffering Gladstone experienced was commensurately low, as well. The Court acknowledged there are cases in which low medical bills do not accurately reflect the amount of pain and suffering. Accordingly, the Court noted that in such circumstances, evidence of the medical bills could be excluded in a particular case “if the probative value is substantially outweighed by a danger of unfair prejudice, confusing the issues, misleading the jury, undue delay, or needlessly presenting cumulative evidence.” The Court of Appeals observed that the Trial Courts are given great latitude to make such determinations.
Gladstone was able to present medical evidence, as well as his own testimony on pain and suffering. The jury considered all that evidence. Judge Bradford went on to note that “while the jury may not have credited this evidence, Gladstone has not established any danger that the jury was unable to grasp Gladstone’s theory of the case or that its verdict was the result of confusion.” In so holding, the Indiana Court of Appeals cited to the South Carolina Court of Appeals:
“We are confident in the jurors’ ability to weigh evidence and must presume they follow their instructions by applying the facts to the law of damages. We see no reason they should be kept ignorant of the cost of Nestler’s medical treatment in determining the facts. What they did with that evidence was largely up to them; as the trial noted, part of the advocate’s art is persuading jurors how such evidence should be interpreted.”
Nestler v. Fields, 824 S.E.2d461 (S.C. Ct. App. 2019).
No doubt, Gladstone, his counsel, and ITLA will Petition for Transfer to the Indiana Supreme Court. However, this particular case may not have been the best vehicle for the plaintiffs’ bar to address the issue before the Indiana Supreme Court. Given the fact that the Gladstone opinion stems from a unanimous Court of Appeals, the plaintiffs may have an uphill slog trying to convince a majority of the Indiana Supreme Court, whose decisions in both Stanley and Patchett clearly reveal a penchant for allowing jurors to hear all relevant evidence, irrespective of which side is making the presentation, to reverse what appears to be a common sense holding, that also allows latitude to the Trial Courts to bar evidence of medical bills if appropriate.
Even if Transfer is granted it, thus, appears that the plaintiffs’ bar will be 0 for 3 when it comes to their strategy of “hiding the ball” from the jurors, and denying them evidence relevant to their determination of the nature, scope and extent of the plaintiff’s claimed injuries and damages. That said, we are certain another attempted strategy is already in the works. Perhaps someday these attorneys and their clients will finally realize that jurors really can handle the truth.
If you have a case where it is likely or even possible that the plaintiff will not be introducing evidence regarding past medical expenses and you would like assistance ensuring that this evidence is presented to the jury, feel free to call the authors of this article or any of the attorneys at the Merrillville, Indiana office of Garan, Lucow, Miller and we will be more than happy to assist.
Check out our News & Events page to see what’s happening at GLM and find out about our upcoming seminars.
Jennifer Davis, Editor of The Garan Report – Hoosier Edition, is a Shareholder in our Merrillville, Indiana Office. Jennifer can be reached at (219) 756-7901 or jdavis@garanlucow.com
