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Friday, October 21, 2016

Ind. Decisions - Supreme Court decides one today; and J. Slaughter's 1st majority opinion

In Mary K. Patchett v. Ashley N. Lee, a 12-page, 5-0 decision, including a separate concurring opinion, Justice Slaughter writes:

In Stanley v. Walker, 906 N.E.2d 852 (Ind. 2009), we interpreted Indiana’s collateral-source statute to permit a defendant in a personal-injury suit to introduce discounted reimbursements negotiated between the plaintiff’s medical providers and his private health insurer, so long as insurance is not referenced. Today, we hold the rationale of Stanley v. Walker applies equally to reimbursements by government payers. The animating principle in both cases is that the medical provider has agreed to accept the reduced reimbursement as full payment for services rendered. The reduced amount is thus a probative, relevant measure of the reasonable value of the plaintiff’s medical care that the factfinder should consider. * * *

The parties agreed that Indiana Evidence Rule 413 allowed Lee to introduce her accidentrelated medical bills totaling $87,706.36 as evidence those charges were reasonable. The parties disagreed, however, whether Patchett could introduce evidence that Lee’s providers accepted a reduced amount as payment in full. Specifically, because Lee was enrolled in the Healthy Indiana Plan (HIP), a government-sponsored healthcare program, her providers, as HIP participants, accepted HIP’s prevailing reimbursement rates of $12,051.48 in full satisfaction of those charges— an 86-percent discount from the amounts billed.

Lee moved before trial to prevent the jury from hearing the reduced HIP rates. Patchett objected, but the trial court granted Lee’s motion. In addition to finding that the HIP payments are subject to the collateral-source statute and not permitted by Stanley, the court excluded the HIP amounts under Evidence Rule 403, because it found HIP’s reduced rates would only confuse the jury. The court certified its order for interlocutory appeal, observing that “whether [Patchett] may prove the reasonable value of [Lee’s] medical expenses by introducing evidence of the discounted payments made to her medical providers through HIP is of critical importance to the jury’s determination of damages.”

The Court of Appeals accepted jurisdiction and affirmed. Patchett v. Lee, 46 N.E.3d 476 (Ind. Ct. App. 2015). The court concluded Stanley was limited to “evidence of ‘discounted amounts’ arrived at as the result of negotiation between the provider and an insurer”. Id. at 487. Because the reduced HIP amounts “were not calculated based upon market negotiation”, the court held they are “not probative of reasonable value” and were properly excluded. Id. Patchett then sought transfer, arguing the courts below erred in finding Stanley v. Walker inapplicable to HIP discounts. We grant transfer, thus vacating the Court of Appeals opinion, and reverse. * * *

Stanley v. Walker made evidence of the reduced reimbursements a healthcare provider accepts as full payment for services rendered to be presumptively admissible in a personal-injury suit for damages concerning the reasonable value of necessary medical care. We hold that the trial court misinterpreted Stanley by holding the collateral-source statute required the exclusion of accepted reimbursements from government payers. Moreover, we find the court abused its discretion by excluding such evidence under Rule 403. We reverse and remand with instructions to allow Patchett to introduce evidence of the reduced HIP rates accepted by Lee’s medical providers so long as Patchett can do so without referencing their source.

Rush, C.J., and Massa, J., concur.

Rucker, J., concurs in result with separate opinion in which David, J., joins. Largely for reasons the majority explains I agree “the rationale of Stanley v. Walker applies equally to reimbursements by government payers.” Slip op. at 2 (emphasis added). I write separately however because I continue to believe Stanley was wrongly decided. * * *

Nonetheless neither party nor their aligned amici asks us to reconsider Stanley. And importantly, in the years since Stanley was decided, the legislature has not amended the collateral source statute in a way that demonstrates disapproval with this Court’s judicial interpretation. Further, the landscape in the healthcare industry has not changed dramatically since Stanley was decided and thus our doctrine of stare decisis also militates against charting a different course. For these reasons I concur in the result reached by the majority.

Posted by Marcia Oddi on October 21, 2016 02:43 PM
Posted to Ind. Sup.Ct. Decisions