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Bill Write-offs Can’t Reduce Awards: Panel

July 29, 2016  ·  By HM&M

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By Lauraann Wood
Law Bulletin staff writer

A state appeals panel has ruled that jury awards for medical bills in injury cases cannot be reduced to account for the amount of bills the health provider writes off.

The opinion issued earlier this month in the Springfield-based 4th District Appellate Court addresses a long-standing debate between the state's plaintiff bar and defense bar — which each offered their stance through bar group amicus briefs — regarding how medical bills and subsequent jury awards should be calculated.

In the underlying case, a Coles County jury awarded plaintiff Harold Miller $133,347 for medical expenses in his July 2015 medical-malpractice trial. Fifth Judicial Circuit Judge Brien J. O'Brien reduced the award by $91,724 when the defendant hospital and doctor argued that such a number represented an amount of money neither Miller nor his health-care provider had a right to recover since it was written off in his medical bills.

They brought their motion to reduce the expenses award under Section 2-1205 of the Code of Civil Procedure. The statute provides that recovery amounts can be reduced by up to 100 percent of the benefits provided for medical, hospital, nursing or care-taking charges that have either already been paid or become payable to the injured party.

The statute was passed in the 1970s and applied during times when medical patients would pay their bills directly and subrogation-right clauses weren't nearly as popular with insurance companies then as they are now, said Michael F. Sullivan, an associate at Sukhman, Yagoda who represented Miller.

“You would pay directly, and then you'd be reimbursed by your insurance company. And you would be allowed to be reduced by that amount,” he said. “In the '70s [subrogation clauses] weren't really prevalent, and now they're a part of almost every insurance agreement issued.”

Defendants Sarah Bush Lincoln Health Center in Mattoon and Dr. Curtis Green used the long-standing statute's language to argue Miller was not entitled to recover the $91,724 because no one had a right to recoup the written-off portion of his medical-expense award. O'Brien reduced the award last August.

But the 4th District Appellate Court ruled that write-offs are not the same things as payments, so the plain language of the defendants' cited statute does not apply to their case.

“The statute does not allow a verdict to be reduced by the amount of the bills which have been satisfied or the value of the benefit to the plaintiff,” Justice M. Carol Pope wrote in the panel's 11-page opinion. “Instead, it only allows a verdict to be reduced by the amount paid to the medical providers or payable to the plaintiff.”

The appellate panel heard from associations on both sides of the bar while considering its stance on the case.

In an amicus curiae brief filed by the Illinois Association of Trial Defense Counsel, the organization contended the procedure code's statute intended to allow a reduction for “all of the same benefits that were included in the common law collateral source rule,” which includes “not only monetary payments made by insurance carriers and Medicare but also amounts that are ‘written off' of bills pursuant to contractual agreements or federal law.”

But a brief filed by the Illinois Trial Lawyers Association contended the statute is clear in that a benefit needs to either be paid or made payable to the plaintiff for a reduction to apply and for a medical provider to write off an amount of money it is entitled to recover “is the antithesis of a payment by definition.”

The panel ruled that the statute's plain language does not support the defense bar's contention.

“The amount the medical providers wrote off from their original bills was never paid by anyone, and the amount certainly had not become payable to the plaintiff,” Pope wrote. “IATDC's argument asks this court to ignore the restrictive language, ‘which have been paid or which have become payable to the injured person.'”

Justices Robert J. Steigmann and Thomas R. Appleton concurred in the opinion, Harold Miller v. Sarah Bush Lincoln Health Center, et al., 2016 IL app (4th) 150728.

ITLA President Christopher T. Hurley said the court decided Miller's case correctly.

“The purpose of the law is to avoid the plaintiff from getting a double recovery. No double recovery happened here, and they correctly decided that no credit should be given to the tortfeasor,” he said. ” …I think when writing the law, the legislature said, ‘We're not going to give the tortfeasor the benefit of something that isn't actually a payment to the plaintiff.'”

Kevin M. Miller, a partner at Quinn, Johnston, Henderson, Pretorius & Cerulo Chtd. in Peoria who represented the defendants, said the court's opinion puts a restriction on “doctors' enjoyment of protections of the law.”

“It's certainly a narrow reading of the law rather than a broader one, which would have afforded protection to a greater number of medical care providers,” he said.

And while Miller said his clients have not yet decided whether to try appealing to the Illinois Supreme Court, IADTDC President-elect and SmithAmundsen LLC partner Michael L. Resis said the case might be ripe for direction from the high court.

“We have an appellate decision, an earlier decision — Perkey [v. Portes-Jarol] from 2013 — that on virtually identical facts reached a contrary result and allowed a reduction in the judgment. That case was appealed to the Supreme Court, and the Supreme Court denied leave to appeal, which is not noted in the Miller decision,” Resis said.

“It is true, however, that since Miller reached the diametrically opposite result, the Supreme Court may need to accept the case for review to eliminate the conflict that Miller has created.”

Original article courtesy of Lauraann Wood, Chicago Daily Law Bulletin, published July 27, 2016.

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