ComeS now Plaintiff, by and through his attorney, D.J. Banovitz, Esq. and respectfully submits this Motion pursuant to C.R.S. 12-21-111.6 to preclude evidence of the amount of medical bills paid by workers compensation versus the amount of medical expenses billed by providers and states as follows:
C.R.C.P. 121 Certification and Background
Pursuant to C.R.C.P. 121 s. 1-15(a) undersigned counsel hereby certifies that he has conferred with counsel for Precision Tube Technology, L.P. and Maverick Tube Corporation (Defendants) who are opposed to the relief requested herein. Defendant has offered to stipulate to the admission of the amount of medical bills paid by workers compensation. There are numerous providers in this serious injury case and the amount of medical bills paid by workers compensation exceeds $115,000.00. Plaintiff’s medical bills total in excess of $165,000.00. Plaintiff intends to call as a witness Fran Wood of The Hartford Insurance, the workers compensation carrier, to testify as to amounts paid for both medical and indemnity payments depending on the Court’s ruling on this issue.
I. The Collateral Source Rule, Including as Modified by § 13-21-111.6, C.R.S.,
Bars as Irrelevant any Evidence of Plaintiff’s Workers Compensation Medical Benefits Paid
Prior to 1986, Colorado had long recognized the collateral source rule and doctrine as a part of this state’s common law. Such rule provided that “compensation or indemnity received by an injured party from a collateral source, wholly independent of the wrongdoer and to which he has not contributed, will not diminish the damages otherwise recoverable from the wrongdoer.” Kistler v. Halsey, 173 Colo. 540, 481 P.2d 722, 724 (1971). The purpose of such rule was to prevent a tortfeasor from receiving a windfall and credit for compensation or indemnity to an injured party from a collateral source, which would thereby reduce the amount payable by the tortfeasor as damages to the injured party. To the extent either party was perceived to receive a windfall by application of this rule, justice required that the collateral benefit be realized by the injured party in the form of double recovery rather than by the tortfeasor in the form of reduced liability. See Publix Cab Co. v. Colorado Nat’l Bank, 139 Colo. 205, 338 P.2d 702, 715 (1959)(principle that injured party who carries health insurance policy nevertheless has a right to recover against wrongdoer in tort action the health care expenses charged due to the tort is based upon reasoning that such insurance policy is made between the insured and insurer and does not mitigate tortfeasor’s damages); Riss & Co. v. Anderson, 108 Colo. 78, 114 P.2d 278, 281 (1941)(a tortfeasor may not use injured party’s prudence and foresight in obtaining insurance to relieve tortfeasor of the consequences of his own wrong); Powell v. Brady, 30 Colo. App. 406, 496 P.2d 328, 333 (1972), aff’d 181 Colo. 218, 508 P.2d 1254 (1973)(health care expense payments made under Medicare coverage are analogous to private insurance payments and under collateral source rule defendant not entitled to reduction of medical expense damages based upon proceeds from Medicare coverage). As an evidentiary component of the collateral source doctrine, proof of payment of medical expenses by an injured party’s health plan or insurer is barred in a tort action as “evidence of compensation from a collateral source is inadmissible, because it is irrelevant.” See Myers v. Beem, 712 P.2d 1092, 1093 (Colo. App.1985).
In 1986, the General Assembly modified and limited to some extent the application of Colorado’s common law collateral source rule by its enactment § 13-21-111.6. Such statute provides in relevant part:
In any action by any person … to recover damages for a tort resulting
in … injury to person or property …, the court, after the finder of fact
has returned its verdict stating the amount of damages to be awarded,
shall reduce the amount of the verdict by the amount by which such
person … has been or will be wholly or partially indemnified or compensated for his loss by any … insurance company, or fund in relation to the injury [or]
damage … sustained; except that the verdict shall not be reduced by the
amount by which such person … has been or will be wholly or partially
indemnified or compensated by a benefit paid as a result of a contract
entered into and paid for by or on behalf of such person. The court
shall enter judgment on such reduced amount.
§ 13-21-111.6 (emphasis and brackets added).
In reviewing §13-21-111.6 and its effect on the common law collateral source rule relative to statutory fire fighter disability benefits received by a plaintiff as a result of his tort injury and as provided through his employment, the Colorado Supreme Court in Van Waters & Rogers, Inc., v. Keelan, 840 P.2d 1070 (Colo.1992), initially noted that “the underlying purpose of section 13-21-111.6 is to limit the circumstances under which a plaintiff can receive double compensation for an injury.” Id. at 1075. Nonetheless, in discussing the above italicized exception portion of §13-21-111.6, the Keelan court went on to state that ” [i]t is clear, however, that in placing an exception within the statute, the General Assembly intended to preclude the setoff of certain types of benefits.” Id. In ultimately holding the disability benefits at issue there were within the scope of the “contract” exception in §13-21-111.6 and thus were not subject to the general setoff function of such statute, i.e., that such disability benefits were excepted collateral source benefits, still inadmissible in evidence and not to be applied as a credit and a windfall to a tortfeasor’s benefit, the Keelan court examined the legislative history of §13-21-111.6 and concluded:
This history confirms that the general goal of section 13-21-111.6 was to limit double recoveries. It also shows, however, an intent not to deny a plaintiff compensation to which he is entitled by virtue of a contract that either he, or someone on his behalf, entered into and paid for with the expectation of receiving the consequent benefits at some point in the future.
Keelan, 840 P.2d at 1078 (emphasis added).
When the above principles are applied to the circumstances of the present case, it is clear that Plaintiff’s workers compensation coverage through and benefits paid by The Hartford, is precisely the type of arrangement recognized by the contract exception in § 13-21-111.6. As Plaintiff’s Hartford workers compensation benefits here are excepted from, and are not subject to, §13-21-111.6’s general setoff modification to the collateral source rule, such statute has no set-off application in this case, and evidence of such benefits remains irrelevant and inadmissible under Myers, 712 P.2d at 1093.
II. The Appropriate Measure of Plaintiff’s Treatment Expense Damages
is the Amounts Billed not Reduced Amounts Due to Obtained Reductions or Discounts
Even in light of the collateral source rule principles discussed above, it is anticipated that the defense will argues that Plaintiff should not be allowed to assert the full treatment expenses charged as his measure of treatment expense damages, but that he should be limited to amounts paid by or charged and to amounts paid by Hartford due to reductions or discounts Hartford was able to obtain. However, Colorado appears to follow the rule that the correct measure of compensable damages for medical expenses in a tort action is the reasonable and necessary value of the services rendered rather than the amount actually paid for such services. See Lawson v. Safeway, Inc., 878 P.2d 127, 131 (Colo.App.1994).
The Colorado Court of appeals addressed this issue in the workers compensation benefits paid context. The proceeds resulting from benefits provided to an employee by his or her employer pursuant to contract of hire, are not subject to statutory setoff in an action against third-party tort-feasor.. Combined Community Corp., Inc. v. Public Service Co., 865 P.2d 893, 901-902 (Colo.App.1993).
Furthermore, a substantial majority of appellate courts of other jurisdictions have also applied this full, reasonable amount billed measure of damages when discounts or write-offs obtained by insurers have occurred, and such courts have barred evidence of such discounts. See, e.g., Arthur v. Catour, 345 Ill.App.3d 804, 803 N.E.2d 647, 649 (2004)(while discounting of medical bills is a common practice in modern healthcare, the amount actually billed does not become unreasonable simply because plaintiff’s insurer was able to negotiate and pay a lesser charge, and plaintiff was entitled to recover approximate $19,355.00 billed and was not limited to $13,577.00 discounted amount paid by insurer); Koffman v. Leichtfuss, 246 Wis.2d 31, 630 N.W.2d 201, 214-15 (2001)(plaintiff in personal injury action entitled to seek recovery of reasonable value of medical expenses rendered without limitation to amounts paid by insurers and plaintiff; amounts paid by insurers were inadmissible and resulted in reversible error); Radvany v. Davis, 551 S.E.2d 347, 348 (Va. 2001)(trial court did not err in excluding evidence in tort action offered by defendant that showed while plaintiff’s treaters billed over $19,000.00 for medical services rendered such treaters accepted about $7,800.00 from plaintiff’s private insurer as full payment; such matters were not admissible under collateral source rule); see also Lopez v. Safeway Stores, Inc., 212 Ariz. 198, 129 P.3d 487, 496 (App. 2006)(Arizona Court of Appeals agrees with clear majority of other jurisdictions that tort plaintiff is entitled to claim and recover full amount of reasonable medical expenses charged without any reduction for discounts obtained by plaintiff’s insurance carriers, and trial court did not err in denying defendant’s motion in limine arguing plaintiff should only be able to claim and present evidence on discounted medical expenses); Robinson v. Bates, 160 Ohio App.3d 668, 828 N.E.2d 657, 672 (2005)(Ohio Court of Appeals agrees with large majority of other jurisdictions that have held plaintiff’s recovery of reasonable amount of medical treatment is not limited to amount paid by insurance, as tortfeasors should be liable for full amount of damages caused by their wrongdoing, independent of the financial situations of their victims).
A recent unpublished opinion by a Colorado appellate courts appear to be the first direct and only treatment of the issue of medical expenses charged vs. discounted expenses relative to a personal injury tort action. In Steidinger v. Hilton 07 CA0837 (Colo. App. 2008) announced on August 28, 2008, the Court of Appeals affirmed the trial court’s order prohibiting the defendant from using amounts paid by Plaintiff’s health insurer as evidence to show the reasonableness of expenses and the jury was instructed to award damages for medical expenses only if the expenses were reasonable and necessary. The Court concluded that there was no abuse of discretion in that ruling or the trial court’s decision to allow Plaintiff to present evidence of his medical bills along with the testimony that the amount incurred was reasonable and necessary as a result of the accident. A copy of the Steidinger decision is attached hereto as Exhibit A.
This Court should therefore enter an Order and determine as a matter of law that (a) the proper measure of medical/treatment expense damages in this case is the full amount of such reasonable expenses charged, without reduction for any discounts or write-offs obtained by Plaintiff or his workers compensation plan; and (b) the defense should be precluded from introducing any evidence as to, or making any comment or argument on, Plaintiff’s worker’s compensation coverage payment of his medical/treatment expenses and that he and/or his workers compensation plan received discounts or reductions on his involved medical/treatment expenses.
The Plaintiff should be entitled to the benefit of the bargain contracted for, including any reduction in payments that his insurer was able to negotiate. Defendants should not get any benefit from this bargain.