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Moretz v. Muakkassa

A few years ago, I was in a deposition conducted by a plaintiff's attorney. He was deposing one of his client's subsequent treating physicians. Near the end of the deposition, the attorney handed the doctor a stack of medical bills and asked him whether the amount charged for his medical services was reasonable and necessary. The doctor responded by explaining that the amount billed for medical services and the amount paid for those services is the difference between "fantasy and reality." He explained that the initial charge is based on coding by the hospital but the insurance company's payment is based on their contract with the medical provider. The doctor continued, "Unfortunately in medicine, what you bill is generally not what you get paid." He concluded his testimony saying, "medicine is so complicated today. I don't know what reasonable values are anymore."

The battle regarding the reasonable value of medical services has been waged for many years. On the one side, plaintiff attorneys have argued that the amount billed reflects the true value of medical services and should be the sole consideration for a jury when determining the economic harm suffered by an injured party. In the years before Tort Reform, plaintiff attorneys relied on the collateral-source rule to shield juries from ever seeing the actual amount that was paid by insurance companies for the services that were provided. All that was required was an expert to testify that the amount billed was reasonable and necessary, which many courts viewed as "an empty ceremonial."

Anyone who has ever reviewed an explanation of benefits ("EOB") from their insurance carrier knows that the amount the hospital bills for a service is rarely, if ever, the amount paid by their insurance carrier. Typically, the amount paid is considerably less (unless you do not have insurance) then the amount charged.

In 2005, along with the avalanche of legislative changes to Ohio tort law, the legislature enacted R.C. 2315.20 which permitted the introduction into evidence of any amount payable as a benefit to the plaintiff. In short, defendants were now allowed to introduce "write-offs" into evidence, which al-lowed juries to consider the actual amount that was received for medical services compared to the amount that was billed by the provider. Not surprisingly, this change in the rules did not go over well with plaintiff's attorneys, so they took to the courts in hopes of minimizing the application of the new rule.

In 2006, in Robinson v. Bates, 112 Ohio St.3d 17, 2006-Ohio-6362, a pre-tort reform case, the Ohio Supreme Court rejected the argument by the plaintiff that the collateral source rule prohibited the introduction into evidence of write-offs for consideration by a jury. In Robinson, the Court reasoned that the purpose of the collateral source rule was to prevent a wrongdoer from benefitting from payments made to a victim from another source. Thus, a plaintiff's receipt of benefits from sources other than the tortfeasor was deemed irrelevant and immaterial on the issue of damages so that the tortfeasor was not given an advantage from third-party payments to the plaintiff. However, the Court concluded that because no one actually pays the write-off amount, admitting evidence of write-offs does not violate the purpose behind the collateral source rule. In short, the Court recognized that "either the bill itself or the amount actually paid can be submitted to prove the value of medical services" as the medical bills are prima facie evidence of the reasonable value of medical services.

Last October, the Ohio Supreme Court issued a highly anticipated decision, which has hopefully put to rest the debate over the introduction into evidence of "write-offs" in medical bills for a jury's consideration when determining economic damages in a personal injury or wrongful death case. In Moretz v. Muakkassa, 137 Ohio St. 3d 171, 2013-Ohio-4656, the plaintiff argued that introduction into evidence of write-offs by a defendant required expert testimony. Plaintiff's position was that RC 2317.421, which had statutorily established that medical bills are prima facie evidence of the reasonableness of medical charges, did not extend to write-offs. The Ohio Supreme Court disagreed.

The Court review of RC 2317.412 noted that the language states that "a written bill or statement, or any portion thereof" was evidence of reasonable medical charges. The Court reasoned that the Generally Assembly's inclusion of "or any portion thereof" demonstrated that they intended a broader application of the law beyond just charges. Since R.C. 2317.421 does not specifically exclude write-offs, the Court held that evidence of write-offs in medical bills is admissible to a jury to show the amount which was actually paid for medical care versus the amount originally billed by the provider for those services without the need for expert testimony.

In simple terms, the Court has left the determination of the reasonable value of medical services up to the jury in each case. A jury may decide that the reasonable value of medical care is the amount originally billed, the amount the medical provider accepted as payment or some amount in between. This decision makes the process simple for Courts and attorneys while allowing juries to view all of the evidence in reaching its conclusion on damages.