Rose v. via Christi Health System, Inc.
113 P.3d 241
Kan.
2003
Check Treatment

*1 88,434 No. of and as Spouse Lyle Surviving Individually Rose, M.

Aldena as Executor Deceased, Marilyn Rose, and Corr, A. Deceased, Rose, of Estate Appellants/Cross-appellees, Lyle Campus, System, Francis Inc./St. Health Christi Via Appellee/Cross-appellant. P.3d 241 Opinion (For filed October 2005. opinion on filed original rehearing June Inc., Health see Rose v. Via Christi System,

[2003]). Wichita, Offices, P.A., Warner, of Law M. of Warner argued

Thomas Jr., the briefs for cause and was on appellants/cross-appellees. Wichita, L.L.P., Gribble, II, Hite, of & argued D. of Honeyman, Don Fanning firm, Wheeler, cause, him the for was with on briefs P. of the same and Vince

appellee/cross-appellant. Goodell, Stratton, Stratton, of R. and Anne M. T. Charles Kindling, Hay, Wayne L.L.P., Palmer, for amicus curiae were on the briefs of

Edmonds & Topeka, Association. Kansas Hospital Kitch, Fleeson, & Coulson and David G. of Gooing, W. Vix Seely, Lyndon

L.L.C., Wichita, Association of amicus curiae Kansas were on the brief for of Defense Counsel. Pletcher, Steadman, Howell, Brad D. of Arden R. Douglas Kyle J. J. James Wichita, Associates, curiae Kansas Trial the briefs for amicus were on

shaw & Association. Lawyers was delivered court opinion Rose, Rose, Aldena M. Luckert, surviving spouse Lyle J.: *2 Corr, Rose,

and A. Executor of the Estate of deceased Marilyn Lyle (hereinafter Rose), referred to as in this jointly plaintiffs wrongful action, death the trial court’s order Via Christi appeal allowing (Via Christi), Health Inc. offset or credit System, postverdict its share of the award for medical An against jury expenses. opinion 31, was filed in this case on October 2003. Rose v. Via Christi Inc., Health We System, granted and, a motion for after consideration of the additional rehearing affirm briefs and oral our We arguments, modify previous opinion. the trial court’s decision to allow the credit damages and, award since we find in Via issue, Christi’s favor on that do not reach Via Christi’s which raised an alternative cross-appeal argu- ment to be considered if the trial court was reversed on the first issue.

Facts Rose, Christi, while treated at Via fell out of bed and Lyle being hit fall, his head. After the continued to be treated at Via Lyle Christi, unit, in the intensive care for a subdural hema- primarily toma and other from his fall. He remained in the injuries resulting until his death 1 month later. Via Christi hospital approximately billed insurer, Medicare, and his for the full cost of Lyle primary treatment from the sustained when Lyle’s resulting injuries Lyle $83,000 fell. Medicare but did not paid approximately pay approx- $154,000 of the amount Via Christi had billed. imately trial, Prior to Via Christi filed a motion in limine to limit seeking evidence of medical to the amount Med- expenses actually paid by icare. motion, The trial court denied Via Christi’s that the finding collateral source rule The court determined that tire ra- applied. of Bates v. tionale Kan. 2d Hogg, App. Syl. ¶ rev. denied 260 Kan. 991 (1996), which held that Medicaid write source, offs were not a collateral did not to the Medi- apply care write offs. The trial court admitted into evidence the full amount of the Via Christi billings.

A found Via Christi to be 36 at fault and awarded jury percent $582,186.01, total $261,422.46 in medical damages including totaled Christi’s Via judgment portion expenses. $209,586.96. $209,586.96

Thereafter, to offset the Via Christi filed a motion or, alter- Medicare did not the medical pay expenses judgment by share of the medical Via Christi’s offset natively, proportionate ($94,112.09) the amount judgment expenses portion $154,000). a hear- did not Following pay (approximately motion, ViaChristi Via Christi’s the trial court allowing ing, granted $94,112.09, rata share of the medical the award its to offset pro the matter was trans- award. Rose appealed, 20-3018(c). this court to K.S.A. ferred to pursuant First, there is no that the trial court erred because Rose argues the trial *3 right trial relied will be even court its decision upon upheld though reasons for its decision. or erroneous wrong ground assigned is immaterial if The reason the trial court for its ruling given by Revenue, 272 the result is correct. See Drake v. Kansas Dept. of 231, 239, Kan. Rose claims that the trial court’s de-

For her second argument, it Medicare’s to cision is because abrogates right subroga- wrong merit. fails to how the tion. This is without Rose explain argument in Medicare’s when its decision trial court abrogates rights nothing does not seek addresses Medicare’s to Via Christi right subrogation. verdict to diminish Rose’s juiy rep- recovery by portion $82,862.99, Medicare, which is the the amount paid by resenting claim. to Medicare’s amount subject subrogation Next, violates fed that the trial court’s decision Rose contends law, its a trial does conflict with federal eral law. If court’s ruling of the United without effect under the Clause Supremacy ruling VI, 2; v. Am art. cl. States Constitution. See U.S. Const. Jenkins 616-17, Products, Inc., 602, 607, 886 P.2d chem 256 Kan. (1995) (1994), that common- cert. denied 516 U.S. 820 (holding or failure to warn are law actions based on labeling inadequate Insecticide, & Rodenticide the Federal Fungicide preempted Act.

The statute which Rose conflicts with the trial court’s argues 1395cc(a)(1)(A)(i) (2000), 42is U.S.C. often referred to as ruling statute, tire Medicare which in limiting charge provides pertinent part:

“(a)(1) of services . . . shall be to under this Any provider qualified participate and shall be for under this if it files with subchapter eligible payments subchapter an Secretary agreement— “(A)(i) (2), not to in individual charge, except provided paragraph any or other for items or services for which such individual is entitled person to have made under this . . . .” subchapter If a Medicare health care violates the not to agreement the United States of Health and Human charge patients, Secretary Services terminate or refuse to renew the may provider’s contract. 42 1395cc(b)(2)(A) (2000). U.S.C. provision applies to made Medicare under 18 of the Social payments subchapter Act, which includes both Security primary secondary pay- ments. that, effect,

Rose trial court’s order allowed Via argues Thus, Christi to Rose. we are “charge” required interpret 1395cc(a)(1)(A)(i) U.S.C. and determine whether a credit award in an amount to the for services equal charges to a a defendant and for which the defendant provided plaintiff by has received no reimbursement ais “charge” prohibited by Medicare statute. law, ais and our review is

Statutory interpretation question 300, 305, unlimited. Williamson v. City Hays, *4 (2003). 364 “The fundamental rule [of to which all other rules are statutory construction] subordinate is that the intent of the if that intent can be as- legislature governs certained, and when a statute is and the court must effect plain unambiguous, give to the intention of the as rather than determine what legislature the expressed Killman, 33, 42-43, law should or should not In be. re 264 Kan. 955 Marriage (1998). uncertain, P.2d 1228 Where the face of the statute leaves its construction enactment, the court look to the historical of the may the circum- background stances its tire to be and the effect attending the passage, purpose accomplished, statute have under the various constructions may [Citation omitted.]” suggested. Co., 95, 100-01, (2000). Robinett v. The Haskell 270 Kan. 12 P.3d 411

527 its intent have to is through expressed presumed legislature State ex rel. Stovall it enacted. scheme of the statutory language (2001) 378, 124 In re 355, 22 P.3d Kan. 271 v. (citing Meneley, [1998]). 33, 42-43, Killman, Kan. 264 Marriage of and a that have Words appropriate acquired peculiar phrases v. Galindo construed in law are to be City accordingly. meaning 455, 465, 1246 885 P.2d 256 Kan. Coffeyville, what rules, these we analysis by determining begin Applying a a when it stated intended may “charge” provider Congress The word has amount. with an unreimbursed “charge” beneficiary a of which is to constrain the effect a pro- meaning, particularized as a debt of the to treat the unreimbursed vider’s ability (7th 1999) 227 ed. Black’s Law See Dictionary beneficiary. claim; encumber” or “to a lien or to means “to impose (“charge” concluded, However, fee; bill”). other courts have as demand a to address situations where does not the Medicare statute specifically than in other seeks reimbursement ways treating provider See, v. Medical a amount as debt beneficiary. e.g., Joiner 1209, (Ala. 1998) (health East, Inc., 1221 care 709 2d So. Center settlement where lien can assert injured party’s provider Medicare); Ins. v. Farmers to Smith insurer was liability primary 2000) (health en- 335, (Colo. care 9 P.3d Exchange, insurance, from to reimbursement titled including primary off’). to be “written amounts by required verdict to reflect case, the trial court’s order In this adjusted under Kansas which Rose was entitled to the measure of damages sense, the amount not, where in a technical law and was “charge” Rose. The basic treated as a debt owed was principle in the same back whole is to make party party putting occurred, a windfall. not to if the had not grant injury position P.A., 236 Kan. & State ex rel. McCulley, Stephan Wolfenbarger 3, (1984); see Damages pp. C.J.S., Syl. ¶ & in v. Howard-Needles-Tammen 627-29 Bergen Ingram (quoted doff, P.2d 1083 [1983] [Schroeder, C.J., dissenting]). in the defendant the loss some has

If defendant way, This be should not adopted principle pay again. required *5 528 (Second) (1977),

the Restatement 920A of Torts which this court § found consistent with Kansas common-law Harrier v. principles. Gendel, 798, 800, 751 (1988). 242 Kan. P.2d 1038 The Restatement (Second) of Torts 920A§ provides: “(1) A made a tortfeasor or for him to a payment by person acting person whom he has is credited his tort as are made injured against liability, payments is, is, another who or believes he to tire same tort subject liability. “(2) made to or benefits conferred on the from other Payment injured party sources are not credited the tortfeasor’s cover all against liability, although they or a of the harm for which the tortfeasor is hable.” part (Second)

Consistent with the rule stated in the Restatement of 920A(1), Torts 870, Hustead v. Bendix 877- Corp., 78, (1983), 1175 P.2d this court considered the effect aof of tort partial payment damages predicated upon possible liability. The court held that the advance or was not ad- partial payment missible into evidence continued, under K.S.A. 40-275. The court “Such constitutes credit and be deducted stating: may from settlement or final rendered.” Kan. at 878. judgment

In this it (Sec is to note that the Restatement regard, important ond) 920A(1) of Torts and our statements of the rule of speak the tortfeasor allowed a “credit” rather than an “offset” for being distinction, minor, is damages paid. though seemingly (also ‘offset’) “The of setoff called technically very important. right allows entities that owe each other their mutual money apply other, debts each ‘the thereby avoiding absurdity making A B Bank, when B owes A.’ v. Nat. 229 U.S. pay Studley Boylston (1913).” Citizens Bank 516 U.S. Maryland Strumpf, 133 L. Ed. 2d 116 S. Ct. 286 Compare situation to a circumstance where a tortfeasor gratuitously provides a benefit to the owes no debt. The tortfeasor plaintiff; plaintiff could not the victim or seek an offset for the “charge” gratuitous Yet, service. the tortfeasor is entitled to a credit for the benefits which the tortfeasor conferred See Restatement upon plaintiff. (Second) 920A, a, b, of Torts (1977). Thus, comments and c of this application principle equivalent treating amount of the write off as a debt of the but as an appro measure of recoverable We see no reason that the priate *6 was made because the should differ result postverdict adjustment with the court, not take issue since the do the trial pro parties by is that the and the ultimate result of the cedural ruling aspect the correct mea reflects recovered Rose amount appropriately by case. of this under the circumstances sure of damages (Second) of Torts the Restatement of The other aspect rule, the 920A(2), is raised the collateral source by parties, largely and in re- related to the a of as cross-appeal carryover arguments the issue of that focus the various amici curiae to upon sponse or, the Medicare more all amounts whether narrowly, by a should be considered collateral of the Medicare write off amount Kansas, is consistent rule in which source. The collateral source 920A, (Second) Torts is stated as follows: with the Restatement of law, the from the collateral source rule hearing “At common prevented jury the an a source evidence of made to by independent injured person payments of die action is a result of the occurrence which injury as upon personal tortfeasor rule,” source the rule as follows: ‘Under the “collateral based. The court has stated and collat received from a source independent benefits by wholly recoverable from will not diminish the otherwise eral to the wrongdoer (1987).” 663, 1, 740 P.2d 1058 v. 241 Kan. Syl. Farley Engelken, ¶ wrongdoer.’ Co., 1010, 1014, added.) 850 P.2d KFB Ins. 252 Kan. v. Thompson (Emphasis (1993). 773 (1990); 504, 508, 791 P.2d 1329 246 Kan. See v. Carey, Gregory 515, Services, 503, 237 Kan. 701 v. Medical Anesthesia Wentling 8, Holleman, Kan. 667 (1985); v. 233 P.2d 939 Allman Syl. ¶ Co., & 231 Kan. (1983); Power P.2d 296 Kansas Pape Light 763, 768-70, Lira, (1982); Southard v. 647 P.2d 320 Co., & (1973); Kansas Power Rexroad v. Light 354-55, (1964). Kan. $154,000 case, of med- of the the facts of this the source

Under Christi, the tort- was Via reimbursed Medicare ical services not by admitted into feasor, The trial court not an source. independent billed, awarded and the full amount Via Christi evidence the jury of those services The value the amount represents The reimbursed Medicare. Via Christi and not cost incurred is structured sys- payment upon prospective program which health care tem under accept primary agree providers from Medicare are reimbursed on flat fee basis deter- mined cost and for various by average length stay diagnostic (DRG). related If a s actual cost falls below the groups provider amount, difference; if DRG it actual cost keeps providers amount, exceeds the DRG absorbs or writes off the statutes, loss. Under the the costs are limited to secondary payer costs that are reasonable and See U.S.C. 1395f customary. Via Christi incurred Rose ex- treating factors, ceeded the DRG amounts. This could be because of several the fact his was and his course of including stay length longer treatment than more difficult the normal or because Via Christi’s reason, costs are than other higher hospitals. Regardless *7 amounts exceeded the DRG amounts. The trial court allowed these evidence, into and the awarded the as expenses jury expenses part of the The value of these services was contributed Via damages. by Christi, anot collateral source.

This same has been other courts under the analysis adopted by fact situation where the defendant was the health care provider which treatment. For in Moorhead v. provided posttort example, Center, (2001), Crozer Chester Med. 564 Pa. 765 A.2d 786 the filed a action after she a fall at suffered plaintiff malpractice the Treatment was the and Medi- hospital. provided by hospital, care reimbursement. At issue was the amount not provided partial reimbursed Medicare. the by Although Pennsylvania Supreme rationales, Court stated several one included the of inapplicability the collateral source rule: we find that the collateral “Additionally, $96,500.91. source rule is to the additional of amount inapplicable The rule from a collateral source shall not provides payments diminish the otherwise recoverable from the damages wrongdoer.’ 564 Pa. at 164. After discussion of the Med- [Citations omitted.]” $96,500.91, icare write inoff the amount of the court stated: “See (Second) 920A(2). Restatement of Torts . . . did not Appellant $96,500.91, nor did Medicare or Blue Cross that amount pay pay on her behalf. The collateral source rule does not to the apply $96,500.91 of since that amount was not illusory ‘charge’ paid by collateral source.” 564 Pa. at 165. any in Candler Court of the Hosp. Appeals Georgia Similarly, (1997), the col- Dent, 491 S.E.2d 868 228 Ga. applied App. the medical bills rule to of lateral source by paid portions those amounts written off: the a credit for but allowed hospital a verdict that awards that the recovers damages the event special plaintiff “[I]n defendant, is the the defendant written off for medical by expenses previously of medical in a or credit award entitled to set-off specific expenses against write-off that the in die amount verdict to the prior entry judgment malees no award of made to the total medical If defendant expenses. jury verdict, then it would not be as or there is a medical general expenses for medical were awarded whether such ascertainable special damages for entitled to a set-off a verdict and the defendant would be against general has of its common law alwaysprohibited public policy, “Georgia, part is entitled to one from a double only recovery damages; plaintiff plaintiff is because such and satisfaction and satisfaction recovery recovery damages, are and ascertainable deemed to make the whole. Where damages special plaintiff indemnitor, have the medical and the defendant or its or insurers paid privies, in such in whole or set-off part, special expenses prior judgment, verdict, in mandated to identified and awarded prevent damages, specifically have but one sat- ‘An can double injured person [Citations omitted.] recovery. . . . will his and therefore the amount the tortfeasor isfaction for by injuries; paid as to the tortfeasors.’ omit- [Citation be as a satisfaction tanto pro joint regarded Thus, but can recover from the all jury damages provable, ted.] special what been the defendant or cannot receive has judgment again already an insurer.” 228 Ga. at 422-23. on the defendant’s behalf App. law court Kansas common

The rationale of *8 Georgia parallels regarding damages. that the has contracted

Such cases plaintiff reject argument Francis in Williamson v. St. for a double For example, recovery. 1990), Center, (La. the trial court 559 So. 2d 929 Medical App. in the full that the should receive a rule plaintiff applied bill, On the court amount of the not as reimbursed. just appeal, the case on other and stated: decided grounds owed, “However, case, was to whom the bill was in the the hospital, present Thus, the contractual the benefit to the adjustment also tortfeasor. plaintiffs result, will As a we or contribution’ of the tortfeasor. results from procuration can- or not allow the to recover for the amount contractually adjusted, plaintiffs celled, 2d at 934. tortfeasor.” So. hospital cases, similar, Other not such hold- although factually distinguish that the is to the situation where ings, recognizing analysis unique the defendant is both the and the health care tortfeasor provider for the from the tort. The District of Columbia injuries resulting Mezzanotte, (D.C. in Court of Hardi 818 A.2d Appeals, 2003), discussed and in Moorhead because Hardi the distinguished Medicare was not the tortfeasor: provider in “Since Court allowed dam- [Pennsylvania Supreme Moorhead] plaintiffs for the amount to the medical and the itself ages actually paid facility, facility amount, in services it is fair to that the medical provided greater say facility made for the whole full amount of the claimed medical actually plaintiff expenses. result, s, It was die contract that tortfeasor’s accounted for this not tire far can as we tell.” footnote, In a the Hardi court further stated: “It is worth here that this the collateral source rule noting again jurisdiction, when comes from a source of the tort- applicable wholly independent feasor or when for the of double plaintiff ’contracts] prospect recovery.’ [Citation It does omitted.] the facts in Moorhead would meet these tests.” appear 818 A.2d at 985 n.5. note, As these cases the Medicare scheme is not one where the contracts for double Most Medicare beneficiary recovery. notably, has a it to seek of amounts right subrogation allowing recovery to a 42 U.S.C. Med- beneficiary. 1395y(b)(2)(B)(iii) § icare’s includes the to seek reimbursement subrogation right right from settlement with a insurer or other beneficiary’s liability 42 U.S.C. third-party payer. 1395y(b)(2)(B). Additionally, (2004) C.F.R. 411.35 allows the Medicare to “collect or provider collect, seek to for the Medicare-covered services the bene- from added) or those amounts ficiary any entity” (emphasis paid by insurer, workers a no fault or an compensation plan, employer health as the insurer. “If this amount exceeds the plan primary (without amount to deductible or co- payable by regard insurance), the or retain the third supplier may party pay- ment in full without the terms of the violating provider agreement 411.35(c)(1). Further, or conditions of 42 C.F.R. assignment.” it cannot assert a hen insur- provider, although against liability ance, look an insurer for where may primary payment prompt *9 See 42 U.S.C. 42 C.F.R. expected. 1395y(b)(2)(A)(ii); § 411.50 § of C.F.R. 411.35 and 42 C.F.R.

Although provisions issue, 411.50 do not to the of the at which apply portion judgment $83,000 which does not include Medicare does have a against claim, these and Medicare’s of sub- subrogation provisions right the award reflect to strike a rogation against Congress’ attempt balance between beneficiaries and for the protecting saving money at So. 2d 1216-17. The system.Joiner, legislative scheme, to assure full regulatory although designed recovery such as deductibles and beneficiary’s out-of-pocket expenses settlement, coinsurance and to maximize is not established to any determine a s measure of or the damages recoverability Rather, the scheme that the Medicare ben- contemplates and the health care should be made whole or eficiary provider whole nearly any through third-party payments.

Not does this scheme demonstrate that the or only “charge” credit amount should not be treated as a collateral source under the facts of this case where the defendant was the of the provider services, it also demonstrates a intent which is consistent legislative with the trial court’s and our determination that the ruling ruling 1395cc(a)(1)(A)(i). did not violate 42 U.S.C. § Thus, case, we conclude that under the facts of this specifically Christi, where the Medicare Via is the defendant and provider, also the health care which services form the basis claim, of the economic the trial court did not err in al a setoff or credit economic loss lowing portion attributable medical to the amount of the Medicare off, Medicare, write an amount not or by plaintiff, third and which reflected cost incurred the defendant. party, The trial court’s is a correct of Kansas law and ruling application statute, is not the Medicare 42 U.S.C. prohibited by limiting charge 1395cc(a)(1)(A)(i). Because we are the trial court’s we do not reach affirming ruling, the issue on the of whether evidence of medical cross-appeal that are written off health care charges provider pursuant a contract with Medicare is admissible at trial as evidence of eco- *10 Thus, we not reach the broader issue of do

nomic off, write when the services are Medicare or a Medicare whether defendant, is a a health care is not provided We that this issue has broader collateral source. appli- recognize which is limited to narrow we reach cation than the today, holding rare factual situation of tortfeasor the relatively providing treatment which underlies the economic loss. medical posttort However, the nature of the trial court’s and tire unique given ruling and, therefore, case, the issue is not before us facts of this broader we refrain from it. reaching

Affirmed.

Gernon, J., participating. I dissent from the result Allegrucci, J., dissenting: respectfully reached I do so based on the majority. reasoning expressed Inc., in the in Rose v. Via Christi Health System, majority opinion Davis, in tire dissent. J., joins foregoing Rose notes court’s law to its decision. correctly support However, such a failure does not failure to cite to authority. result, If a trial court reaches the make a decision reversible.