Opinion ID: 2291678
Heading Depth: 1
Heading Rank: 2

Heading: Statutory Presumption Rebutted

Text: On appeal, Ms. Deck first asserts that the trial court erred in ruling her claim for past medical expenses was limited to the amount actually paid for the treatment she received. She claims she rebutted the presumption in section 490.715.5that the dollar amount necessary to satisfy the financial obligation to her health care providers constituted the value of her medical treatmentby presenting evidence that the value of her medical treatment was the amount billed rather than the amount paid. Ms. Deck argues that on rebutting the presumption, she was entitled to introduce evidence to the jury of her total medical bills. The statute at issue in this case, section 490.715, codifies the common law collateral source rule and modifies it in certain respects. The common law collateral source rule is an exception to the rule that tort damages are only compensatory. Smith v. Shaw, 159 S.W.3d 830, 832 (Mo. banc 2005). Specifically, the rule prevents a tortfeasor from reducing his or her liability to a plaintiff by proving that payments were made to the plaintiff by a collateral source. Id. Subsection 2 of section 490.715 permits a defendant who personally has, or by an insurer or representative, paid all or any part of a plaintiff's special damages to introduce evidence that someone other than the plaintiff paid the amount, but the defendant cannot identify any source of the payment. Section 490.715.2. A defendant who elects to introduce such evidence waives the right to a credit against a judgment as authorized by section 490.710. Section 490.715.3. Subsection 5 of section 490.715, newly enacted in 2005, governs the admissibility of evidence regarding a specific type of damages, the value of medical treatment rendered to a party. It provides that evidence of the dollar amount necessary to satisfy the financial obligation to health care providers is admissible at trial and creates the rebuttable presumption that such amount represents the value of the medical treatment rendered. On the motion of any party, the court may determine whether other evidence of value is admissible at trial and delineates that the other evidence may include, but is not limited to: the medical bills incurred; the amount actually paid for the medical treatment; or the amount or estimate of the amount not paid that such party is obligated to pay in the event of a recovery. Finally, subsection 5 provides that, no matter what evidence is admissible at trial, that evidence shall not identify any person who paid for the medical treatment. Subsection 5 reads: (1) Parties may introduce evidence of the value of the medical treatment rendered to a party that was reasonable, necessary, and a proximate result of the negligence of any party. (2) In determining the value of the medical treatment rendered, there shall be a rebuttable presumption that the dollar amount necessary to satisfy the financial obligation to the health care provider represents the value of the medical treatment rendered. Upon motion of any party, the court may determine, outside the hearing of the jury, the value of the medical treatment rendered based upon additional evidence, including but not limited to: (a) The medical bills incurred by a party; (b) The amount actually paid for medical treatment rendered to a party; (c) The amount or estimate of the amount of medical bills not paid which such party is obligated to pay to any entity in the event of a recovery. Notwithstanding the foregoing, no evidence of collateral sources shall be made known to the jury in presenting the evidence of the value of the medical treatment rendered. Section 490.715. The rebuttable presumption created by section 490.715.5 is that the dollar amount paid to satisfy the financial obligation to the health care providers is the value of the medical treatment rendered. The effect of that presumption is governed by the general law of presumptions. A presumption places the burden of producing substantial evidence to rebut the presumed fact on the party against whom the presumption operates. Terminal Warehouses of St. Joseph, Inc. v. Reiners, 371 S.W.2d 311, 316 (Mo.1963). When substantial evidence is produced rebutting the presumed fact, the case is decided on the basis of the evidence as if no presumption existed. Duff v. St. Louis Mining & Milling Corp., 363 Mo. 944, 255 S.W.2d 792, 793-94 (1953). In other words, when a presumption is rebutted, it disappears from the case and the fact-finder receives the issue free from any presumption. Reiners, 371 S.W.2d at 316. However, the facts that gave rise to the presumption remain in the case and along with the facts to the contrary, are considered by the fact-finder like any other evidence. Id. at 316-17 (citing Michler v. Krey Packing Co., 363 Mo. 707, 253 S.W.2d 136, 140 (1952)). To decide whether a presumption is rebutted, [t]he trial judge need only determine that the evidence introduced in rebuttal is sufficient to support a finding contrary to the presumed fact. 2 McCORMICK ON EVIDENCE § 344 (Kenneth S. Broun et al. eds., 6th ed.2006). In Missouri, the quantum of proof generally required to rebut a presumption is substantial evidence. See Reiners, 371 S.W.2d at 316; see also Wills v. Townes Cadillac-Oldsmobile, 490 S.W.2d 257, 260 (Mo.1973). In the context of presumptions, this Court has held that substantial evidence is `evidence which, if true, has probative force upon the issues, i.e., evidence favoring facts which are such that reasonable men may differ as to whether it establishes them....' Reiners, 371 S.W.2d at 317 (internal citations omitted). The rebuttable presumption in section 490.715.5 requires the trial court to determine if the party seeking to rebut the presumption has presented substantial evidence that the value of medical treatment rendered is an amount different from the dollar amount necessary to satisfy the financial obligations to health care providers. If such substantial evidence is proffered, the statutory presumption is rebutted. When the presumption is rebutted, the party's other evidence of value, as well as the amount necessary to satisfy the financial obligations, is admitted at trial as if no presumption exists. If the presumption is not rebutted, then the only evidence of the value of medical treatment rendered is the dollar amount necessary to satisfy the financial obligation to the health care providers. In the pretrial hearing on Mr. Teasley's motion to determine the value of medical treatment rendered to Ms. Deck, Christopher Bell, a customer care supervisor for St. John's Health Care System (SJHCS), and Janie Mitchell, a reimbursement specialist for St. John's Physicians and Clinics (SJPC), were called as witnesses. Mr. Bell testified that the amounts billed by SJHCS for the medical services provided to Ms. Deck were customary and reasonable. He further testified that when SJHCS attempts to collect an outstanding bill it seeks the full amount of the bill. Finally, he testified that the amount billed by SJHCS is what it considers its services to be worth. Ms. Mitchell similarly testified that the total amount billed by SJPC for health care services provided to Ms. Deck was customary, fair and reasonable. Ms. Mitchell also stated that when SJPC attempts to collect an outstanding bill, it seeks the full amount of the bill rather than the amount reimbursed by Medicare. Ms. Mitchell also testified that the face value of its medical bills is what SJPC considers its services to be worth. Ms. Deck also presented the testimony of Gary Smith, a health care consultant. Prior to consulting, he worked as executive vice president at Cox Hospital for approximately 25 years and in executive roles for other hospitals and clinics. Mr. Smith testified that the amount reimbursed by Medicare for a patient's medical bill usually does not cover the health care provider's cost of business. Because the amount paid by Medicare is less than the cost of the medical services, Mr. Smith testified that, in his opinion, the amount reimbursed by Medicare does not represent the value of the medical services provided by the health care provider. Mr. Smith further testified that the amount reimbursed by Medicare does not take into account the amount of time the health care provider spends with a patient, the number of staff members attending a patient or the hospital's costs. Finally, Mr. Smith stated that the face value of Ms. Deck's bills were fair and reasonable. At trial, Ms. Deck made an offer of proof regarding the value of her medical expenses, again attempting to rebut the presumption of value under section 490.715. She called as a witness Dr. Shane Bennoch, a physician and former emergency department director at Cox Hospital, who testified that the dollar amount necessary to satisfy the financial obligation to the health care providers did not represent the value of the services provided to Ms. Deck and, specifically, that Medicare does not maintain that its reimbursement rates represent the value of medical services. He further testified that the amount billed by a health care provider is a better indicator of the value of the goods and services than the amount that Medicare reimburses. Ms. Deck's evidence presented at the pretrial hearing and the offer of proof that the amount she was billed is the value of the medical treatment rendered to her is substantial evidence that, if true, has probative force upon the issue of the value of the medical treatment rendered such that reasonable persons may differ as to whether it establishes the value. Reiners, 371 S.W.2d at 317. In light of such substantial evidence, the trial court misapplied the law in ruling that the statutory presumption in section 490.715.5 was not rebutted and in precluding Ms. Deck from presenting evidence of the amount of the medical bills she incurred to the jury at trial. Mr. Teasley argues that allowing Ms. Deck to rebut the presumption under section 490.715 and present evidence of the unpaid portions of her medical bills to the jury would result in her receiving a windfall. He argues the legislature amended section 490.715 to prevent such windfalls. Mr. Teasley's policy argument overlooks the language of section 490.715 creating a  rebuttable presumption that the dollar amount necessary to satisfy the financial obligation to the health care provider represents the value of the medical treatment rendered. Section 490.715.5(2) (emphasis added). The legislature's use of a rebuttable presumption is consistent with its recognition that the item of damage for which recovery is sought is the value of services rendered, not a reimbursement of amounts paid by a collateral source. Therefore, the legislature permitted a party to introduce evidence that a figure other than the amount actually paid represented the value of the services rendered in the particular case. [2] The trial court further erred in the present case because the court did not limit its role to determining whether the presumption was rebutted by substantial evidence. Instead, the trial court weighed the competing evidence presented by both parties concerning the value of medical treatment and determined that the value of medical treatment rendered to Ms. Deck was the amount actually paid for Ms. Deck's medical treatment, together with any amount she was still obligated to pay. The language in section 490.715.5(2) that the court may determine ... the value of the medical treatment rendered could be read, as the trial court did in this case, to indicate that the trial court makes the final determination of the value of medical treatment, rather than submitting the issue to the jury for adjudication. However, such an interpretation is not supported by a full reading of section 490.715.5 because the creation of the rebuttable presumption indicates that, if the presumption is rebutted, the jury would be presented evidence as though no presumption existed. Additionally, the final sentence of section 490.715.5[n]otwithstanding the foregoing, no evidence of collateral sources shall be made known to the jury in presenting the evidence of the value of the medical treatment renderedclearly contemplates that evidence regarding the value of medical treatment will be presented to the jury. Having determined that the trial court erred in excluding Ms. Deck's evidence of the value of her medical treatment, the Court must determine whether that error was sufficiently prejudicial such to justify reversal. An error is prejudicial if it appears from the record that the error materially affected the merits of the action. Newton v. Ford Motor Co., 282 S.W.3d 825, 831 (Mo. banc 2009) (citing Rule 84.13(b)). In the present case, Ms. Deck proffered evidence that the value of the medical treatment rendered to her was $27,991.30. However, due to the trial court's exclusion of that evidence, the jury only was permitted to hear evidence that the value of her medical treatment was $9,904.28, the amount that Ms. Deck, Medicare and supplemental insurance actually paid for the treatment after adjustments. The exclusion of evidence of the additional $18,087.02 in potential damages the jury should have been allowed to consider materially affected the merits of the action. See Accomac Realty Co. v. City of St. Louis, 347 Mo. 1224, 152 S.W.2d 100, 103 (1941). Accordingly, the trial court's exclusion of Ms. Deck's evidence of the value of medical treatment was prejudicial. Ms. Deck is entitled to a new trial on the issue of damages.