Opinion ID: 2060702
Heading Depth: 1
Heading Rank: 9

Heading: Are the Paid Bills Admissible by the Defense?

Text: A further disagreement exists in the courts over whether the defense may introduce evidence of the paid amount to assist the jury in determining reasonable value. In Arthur, this court held that defendants are free to challenge a plaintiff's proof of reasonableness on cross-examination and to introduce their own evidence of reasonableness. In her dissent, Chief Justice McMorrow criticized the court for failing to explain what type of evidence defendants could introduce and whether it included the amount paid by a third party. Arthur, 216 Ill.2d at 97-98, 295 Ill.Dec. 641, 833 N.E.2d 847 (McMorrow, C.J., dissenting); see also 38 Loy. U. Chi. L.J. at 210 ([b]ecause the majority did not specifically address how a defendant may properly contest the reasonableness, this may be an area ripe for abuse and conflicting opinions). Some courts have held that both the amount originally billed and the amount actually paid may be considered by the jury. For instance, in Robinson, the Supreme Court of Ohio held that plaintiffs may recover the reasonable value of services and, the reasonable value of medical services is a matter for the jury to determine from all relevant evidence. Both the original medical bill rendered and the amount accepted as full payment are admissible to prove the reasonableness and necessity of charges rendered for medical and hospital care. Robinson, 2006-Ohio-6362, at ¶ 17. Other courts have held that defendants may not introduce the amount paid by a third party to assist the jury in determining reasonable value. For instance, in Leitinger, the Supreme Court of Wisconsin found that allowing defendants to introduce this evidence would undermine the collateral source rule: If evidence of the collateral source payments were admissible, even for consideration of the reasonable value of the medical treatment rendered, a plaintiff's recovery of medical expenses would be affected by the amount actually paid by a collateral source for medical services. Leitinger, 2007 WI 84, ¶ 48. The court further considered the defendant's argument that it should be allowed to introduce the amount of the paid bill if it did not divulge the source of the payments. The court disagreed: Although claiming that the evidence assists the fact-finder in determining the reasonable value of the medical treatment and does not limit or reduce the damages, [the defendant], in essence, is seeking to do indirectly what it cannot do directly, that is, it is seeking to limit [the plaintiff's] award for expenses for medical treatment by introducing evidence that payment was made by a collateral source. Leitinger, 2007 WI 84, ¶ 53. Moreover, the court shared the concern expressed by the South Carolina Supreme Court in Covington v. George, 359 S.C. 100, 104, 597 S.E.2d 142, 144 (2004), that this unexplained evidence would confuse the jury, and any attempt by plaintiff to explain the compromised payment would lead to the existence of a collateral source. Leitinger, 2007 WI 84, ¶ 52. See also Papke, 738 N.W.2d at 536 (when establishing the reasonable value of medical services, defendants in South Dakota are currently prohibited from introducing evidence that a plaintiff's award should be reduced because of a benefit received wholly independent of the defendants); Radvany v. Davis, 262 Va. 308, 310, 551 S.E.2d 347, 348 (2001) (amounts paid by insurance carrier not admissible on question of reasonable value of medical services); Bynum, 106 Hawai`i at 94, 101 P.3d at 1162; Goble v. Frohman, 848 So.2d 406, 410 (Fla.App. 2003) (To challenge the reasonableness or necessity of the medical bills, [the defendant] could have introduced evidence on the value of or need for the medical treatment. As stated in Gormley [ v. GTE Products Corp., 587 So.2d 455, 457 (Fla. 1991)] `there generally will be other evidence having more probative value and involving less likelihood of prejudice than the victim's receipt of insurance-type benefits'). Chief Justice McMorrow expressed a similar concern in her dissent in Arthur, arguing that allowing the defense to bring out that the full billed amount had not been paid would compromise the protections of the collateral source rule and that [a]llowing evidence of both the billed and discounted amounts compromises the collateral source rule, confuses the jury, and potentially prejudices both parties in the case. Arthur, 216 Ill.2d at 98, 295 Ill.Dec. 641, 833 N.E.2d 847 (McMorrow, C.J., dissenting). We agree with the latter cases. In Arthur, this court made clear that the collateral source rule operates to prevent the jury from learning anything about collateral income (emphasis added) and that the evidentiary component prevents defendants from introducing evidence that a plaintiff's losses have been compensated for, even in part, by insurance. Arthur, 216 Ill.2d at 79, 80, 295 Ill.Dec. 641, 833 N.E.2d 847. Thus, defendants are free to cross-examine any witnesses that a plaintiff might call to establish reasonableness, and the defense is also free to call its own witnesses to testify that the billed amounts do not reflect the reasonable value of the services. Defendants may not, however, introduce evidence that the plaintiff's bills were settled for a lesser amount because to do so would undermine the collateral source rule.