Lead Opinion
Plaintiff walked into a bar. He was injured when the stool he sat on collapsed beneath him and he sued defendant, the bar owner and operator, for the injuries that he incurred. A jury awarded plaintiff $37,600 in economic damages, approximately the amount that plaintiffs medical providers had billed him for their services. Plaintiff was over 65 years old and, pursuant to the federal Social Security Act, qualified for Medicare benefits. 42 USC §§ 1395 - 1395hhh. In accordance with that federal law and the applicable formula for determining permitted payments, Medicare had paid plaintiffs medical providers a total of $13,400. Also in accordance with that law, the providers had accepted that sum as payment in full for their services and had “written off” the remainder of their charges. The question that this case presents is whether plaintiff may recover from defendant the total amount of the medical providers’ reasonable charges or whether his recovery must be limited to the amount that Medicare paid to those providers. Both the trial court and the Court of Appeals ruled that plaintiff is entitled to recover the full amount of his judgment. For the reasons that follow, we affirm.
Alleging negligence on the part of defendant for failure to inspect and maintain the bar stool, plaintiff commenced a tort action, seeking as economic damages the total amount that his healthcare providers had billed him, as well as noneconomic damages.
“Medicare paid $13,000, and that was what was incurred. * * * [The amount ‘written off] wasn’t paid to the doctors. The doctors have no claim for that money that wasn’t paid to them. They accepted the money from Medicare, and the plaintiff has no obligation to reimburse Medicare any other money than what they paid.”
In the alternative, defendant argued that, to establish “the reasonable amount, * * * the market value” of the medical treatment that plaintiff had received, defendant should be permitted to present to the jury evidence of the amount that Medicare had paid for that treatment.
The trial court ruled that “the jury [wa]s not going to hear any reference to * * * Medicare[,]” and that plaintiff was entitled to claim the entire amount of the bills that he had received. However, the court granted defendant leave to file a post-verdict motion, under Oregon’s collateral source statute, ORS 31.580, to reduce the jury award, “if it bec[ame] necessary.”
The jury found for plaintiff, awarding him $37,600 for economic damages and $100,000 for noneconomic damages. In a post-verdict motion, defendant requested “that the portion of the medical bills which were written-off be deducted from the amount of the verdict.” As it had argued in its motion in limine, defendant asserted that plaintiff had not “necessarily incurred” those charges. As a consequence, defendant further argued, the jury verdict granted plaintiff a “double recovery” to which he was not entitled and that the collateral source statute, ORS 31.580, had been designed to prevent.
In a written order, the trial court noted, as an undisputed fact, that plaintiff contractually had agreed to pay the full amount that his providers billed him.
Defendant timely appealed to the Court of Appeals, renewing the arguments that it had made to the trial court in its pretrial and post-verdict motions. In a written opinion, that court affirmed the judgment of the trial court. White v. Jubitz Corp.,
We granted defendant’s petition for review. In this court, defendant assigns as error three rulings of the trial court, each of which challenges plaintiffs recovery of the medical expenses that his providers billed to him that exceeded the amounts that Medicare paid those providers. Defendant asserts that the trial court erred in (1) refusing to deduct those amounts from plaintiffs jury verdict; (2) allowing plaintiff to seek a jury award of those amounts; and (3) denying defendant’s request to adduce evidence of those amounts.
Before we begin our analysis of defendant’s legal arguments, it is important that we distinguish them from a factual argument that defendant does not make here and did not make below. Defendant does not contend that the total charges that the medical providers billed to plaintiff were excessive, inflated, or unreasonable. Nothing in this record suggests that, had plaintiff not been an eligible Medicare beneficiary, defendant would have contested plaintiffs right to recover those charges. Indeed, defendant stipulated at trial that, as a factual matter, the
For reasons that we explain, the collateral source statute, ORS 31.580, compels our conclusion that the trial court and the Court of Appeals ruled correctly. However, because it assists in an understanding of that statute and each of defendant’s legal arguments, we begin our analysis with a discussion of the common-law collateral source rule and the “double recovery” that it countenances. We then describe ORS 31.580 and analyze how it affects each of defendant’s legal arguments.
I. THE COMMON-LAW COLLATERAL SOURCE RULE
Whenever a plaintiff seeks from a defendant a sum that the plaintiff also is entitled to recover from a third party, the specter of “double recovery” is presented. In 1942, this court first considered how to address such circumstances and adopted what came to be known as the “collateral source rule.” In Cary v. Burris,
“Damages cannot be reduced by an amount which the plaintiff may have received from third parties, acting independently of the defendant, though it is given to the plaintiff on account of the injury. For it is given either as a pure gift, not intended by the giver to be in lieu of damages, or else it is given in performance of a contract, the consideration of which was furnished by the plaintiff. In neither case has the defendant any equitable or legal claim to share in the benefit.”
Id. at 28 (internal quotation marks omitted).
The court also quoted 1 Sutherland on Damages § 158 (3d ed 1903), for the principle that:
“Generally there can be no abatement of damages on the principle of partial compensation received for the injury where it comes from a collateral source, wholly independent of the defendant, and is as to him res inter alios acta. * * * [N]or does the gratuitous care and nursing of an injured plaintiff relieve the party who caused the injury from liability for their worth.”
Id. at 28-29 (internal quotation marks omitted).
In 1974, in considering the evidentiary ramifications of the collateral source rule, this court declared:
“The salutary policy underlying the collateral source rule is simply that if an injured party received some compensation from a source wholly independent of the tortfeasor, such compensation should not be deducted from what he might otherwise recover from the tortfeasor.”
Reinan v. Pacific Motor Trucking Co.,
The term “double recovery” implies that a plaintiff has received and will retain the same remuneration from two outside sources — the defendant and a third-party benefit provider — to compensate for a single harm. However, rarely will that assumption prove entirely accurate. A plaintiff who receives life or medical insurance benefits from a third-party
The common-law collateral source rule does not concern itself with whether a plaintiff actually obtains a “double recovery.” The rule permits a plaintiff to recover damages from a tortfeasor and concomitant sums from a third party and to do so without regard to whether the plaintiff has purchased, earned, or must repay those third-party benefits. In Peterson v. State Farm Ins. Co.,
In the context of a claim for contractual damages, this court has explained that whether a plaintiff who recovers from a tortfeasor and also from a third party is entitled to retain both sets of benefits depends, just as it did in Peterson, on the relationship between the plaintiff and the third-party provider and on the law that governs that relationship:
“It is argued that to disregard payments of social benefits in the action against the employer gives a successful plaintiff an unjustified windfall. But whether to save or recapture those costs is properly an issue between the provider of the benefits and its beneficiaries, a policy choice in the design of the program.”
Seibel v. Liberty Homes, Inc.,
Therefore, under the common-law collateral source rule, the extent of a tortfeasor’s liability to a plaintiff is not determined by the vagaries of whether the plaintiff has purchased life or medical insurance, is eligible for employment or governmental life, medical, disability or retirement benefits, or by the terms of such insurance or benefits. Tortfeasors that cause the same injuries are responsible for the same damages, irrespective of the plaintiffs’ receipt of benefits from, or legal relationships with, third-party benefit providers.
II. THE COLLATERAL SOURCE STATUTE, ORS 31.580
In this case, defendant acknowledges that the common law has permitted the recovery that we have described. However, defendant asserts, when the legislature adopted ORS 31.580 as a component of the comprehensive tort law revisions that it enacted in 1987, that body intended to change the common-law collateral source rule to preclude “double recovery.” We agree that ORS 31.580 modified the common-law collateral source rule and that it now provides the controlling law in actions for damages for bodily injury or death. We disagree, however,
“In a civil action, when a party is awarded damages for bodily injury or death of a person which are to be paid by another party to the action, and the party awarded damages or person injured or deceased received benefits for the injury or death other than from the party who is to pay the damages, the court may deduct from the amount of damages awarded, before the entry of a judgment, the total amount of those collateral benefits other than:
“(a) Benefits which the party awarded damages, the person injured or that person’s estate is obligated to repay;
“(b) Life insurance or other death benefits;
“(c) Insurance benefits for which the person injured or deceased or members of that person’s family paid premiums; and
“(d) Retirement, disability and pension plan benefits, and federal Social Security benefits.”
By its terms, ORS 31.580 applies only to civil actions where a party is awarded damages for bodily injury or death. In those actions, subsection (1) permits, but does not require, a trial court to deduct from a plaintiffs award of damages those benefits that a plaintiff receives from a third party. Paragraphs (a) through (d) limit the circumstances in which a court may exercise its discretion to do so. Those paragraphs preclude a trial court from deducting four sets of benefits; paragraph (a) exempts from deduction those benefits that a plaintiff has an obligation to repay; paragraphs (b) through (d) exempt from deduction other specified benefits such as private and governmental insurance and retirement benefits, but do so without regard to whether a plaintiff has an obligation to repay those benefits, and paragraph (d) specifically precludes trial courts from deducting “federal Social Security benefits” from a plaintiffs damages award.
Instead of relying on the text of ORS 31.580 to support its position, defendant requests that we look to its legislative history to discern “that the legislature sought to eliminate any double recovery by plaintiff in the application of the collateral source rule.” Although we will consider the legislative history of ORS 31.580, we emphasize that that legislative history cannot substitute for, or contradict the text of, that statute.
“[A] party seeking to overcome seemingly plain and unambiguous text with legislative history has a difficult task before it. Legislative history may be used to confirm seemingly plain meaning and even to illuminate it; a party also may use legislative history to attempt to convince a court that superficially clear language actually is not so plain at all — that is, that there is a kind of latent ambiguity in the statute. For those or similar purposes, whether the court will conclude that the particular legislative history on which a party relies is of assistance in determining legislative intent will depend on the substance and probative quality of the legislative history itself. We emphasize again that ORS 174.020 obligates the court to consider proffered legislative history only for whatever it is worth — -and what it is worth is for the court to decide. When the text of a statute is truly capable of only one meaning, no weight can be given to legislative history that suggests — or even confirms — that legislators intended something different.”
State v. Gaines,
Rather than disclose a latent ambiguity in its text, the legislative history of ORS 31.580 confirms our conclusion that, in enacting that statute, the legislature did not preclude “double recovery” of collateral source benefits. When the Senate Judiciary Committee considered the collateral source rule in 1987, it framed the policy choice as follows:
“The policy question here is: Should the defendant get the benefit of the plaintiffs planning and coverage from another source or should the plaintiff recover twice for some of his or her damages * * *?”
Staff Measure Analysis, Senate Committee on Judiciary, Senate Bill (SB) 323, Feb 11,1987, Ex G (memorandum prepared by Karsten Rasmussen) (hereinafter Staff Analysis). Some legislators sought to answer that question by requiring the trial court to deduct collateral benefits from a plaintiffs verdict
“Section 13. (1) When in a civil action a party is awarded damages for bodily injury or death of a person to be paid by another party to the action, and the party awarded damages or person injured or deceased received benefits for the injury or death other than from the party who is to pay the damages, the court shall deduct from the amount of damages awarded, before the entry of final judgment, the total amount of those collateral benefits other than\
“(a) Benefits the party awarded damages, the person injured or that person’s estate is obligated to repay;
“(b) Life insurance or other death benefits;
“(c) Insurance benefits for which the person injured or deceased or members of that person’s family paid premiums; and
“(d) Retirement, disability or pension plan benefits.”
(Emphases added.) In the work sessions where that bill was discussed, members of the committee expressed a desire to prevent a plaintiff from recovering twice for the same injury; members, however, stressed the need that “all economic issues [be] brought in” — i.e., including what the injured party had paid for the collateral damages in premiums, or what the injured party had earned through employment. See Minutes, Senate Committee on Judiciary, SB 323, Mar 3, 1987, 5-6 (Senators Wyers, Cohen, and Brockman, and Chairman Frye expressing agreement that statute should be written to “prevent true double recovery”). Senator Brockman argued that the exceptions essentially neutered that section of the bill. He advocated replacing Section 13 with Senate Bill (SB) 347 (1987), which contained wording similar to subsection 13(1) (“the amount * * * shall be deducted by the court”), but without any exceptions. Id.
The committee then heard testimony and received exhibits demonstrating that, in many cases, double recovery had been addressed by agreements or law that governed the relationships between plaintiffs and the third-party benefit providers. For instance, witnesses noted, subrogation clauses in insurance agreements and government benefit schemes reduced the instances of double recovery. See Staff Analysis (noting that there were few instances of actual double recovery); Testimony, Senate Committee on Judiciary, SB 323, Jan 27, 1987, Ex C (statement of Professor Dominick Vetri) (collateral source rule becoming “less and less significant” because of subrogation). A judiciary committee staff member advised the committee that “passage of legislation which requires that collateral benefits be deducted from the verdict[ ] may either eliminate subrogation or penalize the injured party.” Staff Memorandum, Senate Committee on Judiciary, SB 323, Mar 17, 1987, Ex G (Memorandum Regarding Collateral Benefits prepared by Eric Carlson).
After considering that and other testimony, the committee voted to remove Section 13 from the bill. Minutes, Senate Committee on Judiciary, SB 323, Mar 19, 1987, 20 (motion to delete Section 13 passed over votes of no from Senators Brenneman, Brockman, and Hamby). The effect of Section 13’s removal would have been to leave the issue of collateral benefits to the existing common law that permitted “double recovery.”
SB 323 then went to the House of Representatives. The House reinserted, as Section 9 of the bill, a provision that authorized, but did not require, a court to deduct collateral benefits received by a plaintiff, except those benefits that a plaintiff had an obligation to repay. Section 9 provided, in part:
“In any action arising out of bodily injury * * *, in the event that the injured party * * * has received benefit from a collateral source for which there is not an obligation to repay, the amount or value thereof may be deducted by the court from any verdict or award in [the] plaintiffs favor prior to the entry of final judgment. Before making the deduction, the court shall determine the cost to [the] plaintiff or [the] plaintiffs estate of obtaining such benefit and shall credit the costagainst the amount of the benefit to be deducted from the judgment.”
House Amendments to C-Engrossed SB 323 (emphases added). The House Committee on Judiciary discussed the policy implications of the proposed House amendment and noted that the use of the word “may” would grant a court discretion to consider the collateral benefits that a plaintiff had received but did not have an obligation to repay. The permissive term would authorize a court to reduce a tort verdict by the amount of those benefits, less the cost of obtaining them, when necessary to prevent an unjust result. Minutes, House Committee on Judiciary, SB 323, June 6, 1987, 21. Representative Bunn argued in favor of replacing the discretionary “may” with a mandatory “shall.” In advocating for that position, he articulated the same concern about a plaintiffs potential “windfall” that lies at the heart of defendant’s argument in this case. He urged the committee that
“the basic concept [of the collateral source revision] says that if you are being paid from some other source that you didn’t have to pay for, we’re not going to have the court award a judgment paying you a second time. If you got a judgment for $100,000 of costs and you got $50,000 of costs from some other source that you didn’t have to pay for then we’ll reduce the judgment by $50,000 so that you don’t get a surplus. * * *.
“If we use the word ‘may1 that will destroy the section. It will not provide a meaningful collateral source [statute].”
Tape Recording, House Committee on Judiciary, SB 323, June 6,1987, Tape 733 (statement of Representative Bunn). In response, Representative Dix asserted that “[t]he compromise that was worked out was ‘may,’ ” giving a judge discretion to reduce verdicts in certain situations and that that compromise “[wa]s an important ingredient in the overall package.” Id. (statement of Representative Dix). Representative Bunn subsequently moved to replace the word “may” with the word “shall” and that motion was defeated with all other members on the committee voting against the change. Id.
The final House version of the bill also contained the four categories of benefits that the current version of ORS 31.580 exempts from judicial reduction, regardless whether a plaintiff stands to receive a double recovery. Thus, the legislature answered the policy question posed at the outset of its deliberations by deciding that, for those listed categories of third-party benefits, the plaintiff always should receive the benefit of his or her planning and investment and should not be prevented from recovering twice. For other, unlisted, benefits, a trial court should have discretion to consider the plaintiffs planning and investment and answer the question posed based on the particular facts presented.
ORS 31.580 applies to this action for damages for bodily injury. We turn therefore to an examination of how that statute treats the collateral benefits at issue in this case.
The collateral benefits that plaintiff received and that are at issue here are Medicare benefits. Medicare is a federally funded and administered medical insurance program for the elderly and disabled. 42 USC §§ 1395 - 1395hhh. Congress established Medicare as Title XVIII of the 1965 Social Security Act. Medicare provides individuals with varying degrees of coverage for different types of medical care. Part A of the Medicare program covers hospital stays. Beneficiaries generally fund the benefits that they receive under Medicare Part A by paying payroll taxes. 42 USC § 1395i(a). If beneficiaries have not worked a sufficient period of time to be eligible for Medicare Part A, then they may qualify for those benefits by paying premiums. Id. § 1395i-2a(d). Part B of the Medicare program provides “medical and other health services,” including “physicians’ services,” medically necessary outpatient procedures, and preventative care. Id. § 1395x(s). Beneficiaries fund the benefits they receive under Medicare Part B by paying monthly premiums and a yearly deductible. Id. §§ 1395j-
The Medicare provisions of the Social Security Act assure beneficiaries that, except for deductibles and copays, they will not be required to pay for covered medical expenses. The Medicare provisions achieve that result in the following ways.
With respect to the services provided under part A of the Social Security Act, beneficiaries are entitled to have Medicare make payments “on [their] behalf.” Id. § 1395d(a). Medicare makes those payments directly to providers of hospital services. Id. § 1395g. Providers of hospital services must sign an agreement with Medicare not to charge beneficiaries for services for which beneficiaries are entitled to have payment made by Medicare. Id. § 1395cc(A)(l).
With respect to services provided under Part B of the Social Security Act, Medicare beneficiaries are entitled to have Medicare make payments “to [them] or on [their] behalf.” Id. § 1395k(a)(l). There are two types of physicians under Part B — participating physicians and nonparticipating physicians. Participating physicians make an annual election to accept assignment of Medicare claims from Medicare beneficiaries. Nonparticipating physicians do not make an annual election to accept assignment, but may do so on a case-by-case basis.
If a nonparticipating physician does not accept assignment from a Medicare eligible patient, then Medicare will pay the patient, not the physician. Id. § 1395u(b)(6). In that instance, the Social Security Act prohibits the physician from billing or collecting from the patient an amount that exceeds a statutorily defined “limiting charge.” 42 USC § 1395w-4(g)(l)(A)(i).
In this case, plaintiffs medical providers billed him $38,977 for their services. If plaintiff had not qualified for Medicare benefits, then he would have been liable for the entire amount that the providers had billed him. Instead, Medicare satisfied those bills by requiring that those providers accept Medicare payments of $13,400 as payment in full for their services. Defendant accepts that the amounts that Medicare actually paid his medical providers are exempt from deduction under ORS 31.580(l)(a), which exempts benefits that the plaintiff, the injured party, or that person’s estate “is obligated to repay.” As defendant states it:
“Whether they are considered social security benefits, insurance benefits, or some other type of benefit, medical bill payments actually made by Medicare and for which Medicare has a right to reimbursement are clearly, under ORS 31.580(l)(a), a collateral source that may not be deducted from the judgment.”
(Emphasis in original omitted; emphasis added.) Defendant argues, however, that, because plaintiff does not have an obligation to reimburse Medicare for the “write-offs”
One of those paragraphs, ORS 31.580(l)(d), specifically exempts “federal Social Security benefits” from deduction, and Medicare benefits are, as defendant acknowledges, benefits “established as part of the Social Security Act.” The Court of Appeals conducted a detailed analysis of the text of ORS 31.580(l)(d) and decided that that provision is not limited to Social Security retirement benefits but encompasses the benefits provided by all Social Security programs, including Medicare. White,
Neither defendant’s citation to other state statutes nor the legislative history of ORS 31.580 convinces us that paragraph (d) of that statute is ambiguous. For the reasons explained by the Court of Appeals, we think that the term “federal Social Security benefits” is comprehensive and includes Medicare benefits.
If plaintiff had not been an eligible Medicare beneficiary, then he would have been entitled to recover and retain the jury award of $37,600, the reasonable medical expenses that plaintiffs providers had charged to him. Under ORS 31.580, plaintiffs status as a Medicare beneficiary and his receipt of Medicare benefits do not permit a different result. The legislature precluded the trial court from making any deduction from the jury verdict for “Social Security benefits.” In doing so, the legislature did not indicate an intent to distinguish between the payments that Medicare makes and the requirement that it imposes on medical providers to accept those payments in satisfaction of their charges; the legislature exempted from judicial deduction Social Security “benefits”; it did not exempt Social Security “payments.” Thus, the trial court in this case was correct to deny defendant’s post-trial motion under ORS 31.580 to reduce the jury’s award of medical expenses.
III. RECOVERABLE DAMAGES AND ORS 31.710
Defendant’s next argument, to which we now turn, is that plaintiff was not entitled to claim as economic damages amounts that he did not pay or have a legal obligation to pay. For the reasons that we explain, examining defendant’s objection to plaintiffs “double recovery” through the lens of the damages that a plaintiff is permitted to claim, rather than those damages that a plaintiff may recover, does not lead us to a different conclusion.
In support of its argument, defendant cites the definition of “economic damages” found
“(1) Except for claims subject to ORS 30.260 to 30.300 and ORS chapter 656, in any civil action seeking damages arising out of bodily injury, including emotional injury or distress, death or property damage of any one person including claims for loss of care, comfort, companionship and society and loss of consortium, the amount awarded for noneconomic damages shall not exceed $500,000.
“(2) As used in this section:
“(a) ‘Economic damages’ means objectively verifiable monetary losses including but not limited to reasonable charges necessarily incurred for medical, hospital, nursing and rehabilitative services and other health care services, burial and memorial expenses, loss of income and past and future impairment of earning capacity, reasonable and necessary expenses incurred for substitute domestic services, recurring loss to an estate, damage to reputation that is economically verifiable, reasonable and necessarily incurred costs due to loss of use of property and reasonable costs incurred for repair or for replacement of damaged property, whichever is less.”
(Emphases added.)
Defendant cites the dictionary definitions of “monetary” and “loss” for the proposition that, to suffer monetary loss, a plaintiff must “unintentionally part with money.”
The first problem with that argument is that ORS 31.710(2) does not define or limit the compensatory damages that a plaintiff may recover. ORS 31.710(2) introduces the definition of “economic damages” with the phrase “as used in this section” and therefore defines “economic damages” for the purposes of ORS 31.710. ORS 31.710(1) indicates that the purpose of that statute is to describe the damages that are subject to a statutory cap (noneconomic damages) and those that are exempt from that cap (economic damages). Because this case does not present an issue relating to the statutory cap, the definition in ORS 31.710 is not directly applicable.
Perhaps recognizing that impediment, defendant contends that ORS 31.710 is consistent with the common law and the purpose of compensatory damages — to “ ‘compensate the injured party for the injury sustained, and nothing more[.]’ ” Tadsen v. Praegitzer Industries, Inc.,
We have no quarrel with the maxims on which defendant relies, but they do not precisely address the issue highlighted here. In this case, plaintiff suffered bodily injury as a
One answer to that question is found in the collateral source statute and the legislative policy that it imposes. As we have explained, under ORS 31.580, a plaintiff who has medical insurance that pays his or her reasonable medical bills is entitled to recover the amount of those bills from a tortfeasor. That result obtains even though the plaintiff will not have paid the medical providers and will not remain liable to the providers or, absent subrogation rights, to the insurer. Defendant’s argument that a plaintiff is not entitled to seek, as “economic damages” under ORS 31.710, the medical expenses that ORS 31.580 permits the plaintiff to recover presents, in different dress, the argument against “double recover/’ that we have rejected. If a plaintiff who obtains third-party benefits that cover his or her medical expenses and who does not suffer out-of-pocket loss is entitled to recover those expenses, then that plaintiff also must be entitled to seek those expenses from the tortfeasor. If we were to accept defendant’s newly clothed argument, we could not give effect to ORS 31.580.
Insofar as ORS 31.710 applies to this action, we do not read its definition of economic damages to be inconsistent with the result that ORS 31.580 permits. A plaintiff who is injured and who obtains necessary medical treatment becomes “liable or subject to” reasonable charges for that treatment and thereby “incurs” them. ORS 31.710 does not require that a plaintiff also pay or otherwise satisfy those charges. Whether or by what means the plaintiff or a third party satisfies medical charges is a matter between the plaintiff, the third party, and the medical providers. ORS 31.710 does not make a plaintiff s right to assert a claim for economic damages against a tortfeasor dependent on those arrangements.
A clear indication that ORS 31.710 does not limit a plaintiffs claim to charges that the plaintiff has paid or remains legally obligated to pay is that ORS 31.710 permits a plaintiff to assert a claim for medical treatment that will be necessary in the future. For example, in Clarke v. OHSU,
Defendant does not cite an Oregon case that limits a plaintiffs claim to amounts that a plaintiff pays or remains obligated to pay and we have not discovered one. Oregon courts often have stated that plaintiffs are entitled to recover “reasonable” medical charges. See, e.g., Matthews v. City of La Grande,
“Plaintiff had the right to testify concerning the several charges made for the services performed in his care and treatment, or if he had paid for such services, as to the several amounts paid, but before such evidence could be the basis of a claim for special [economic] damages, it would be necessary to connect it by offering evidence that the charges or amounts paid, as the case might be, were reasonable for the services rendered, and, of course, that the services were performed.”
(Emphases added.)
Cary v. Burris,
The decision in Cary accords with Restatement (Second) of Torts § 924 (1979), cited with approval by this court in Zehr v. Haugen,
Defendant accepts that a plaintiff who is eligible for Medicare benefits and who does not pay out of pocket for the amounts that Medicare pays on his or her behalf may seek recovery of those amounts from a tortfeasor. Defendant contests, however, a plaintiffs right to seek recovery of sums that Medicare satisfies by requiring that providers accept Medicare payment as payment in full for their services. The distinction is one without a legal difference. As we have explained, a plaintiff may claim the reasonable value of the medical charges to which the plaintiff is subject without limitation to the amount that plaintiff pays or remains liable. Similarly, a plaintiff may claim the reasonable value of medical charges without limitation to the amount that a third party pays or remains liable to pay on the plaintiffs behalf. The law does not require either that
The vast majority of courts to consider the issue follow the common-law rule articulated in section 924 of the Restatement and permit plaintiffs to seek the reasonable value of their expenses without limitation to the amount that they pay or that third parties pay on their behalf. See Wills v. Foster, 229 Ill 2d 393, 414,
“Clearly, another relationship between an injured plaintiff and a third party could be a relationship with the government that allows the plaintiffs medical expenses to be paid because of factors such as her age or income level. Similarly, an arrangement between the plaintiff and a physician who agrees to perform free medical services is a relationship with a third party who is collateral to the tortfeasor. In either case, the benefit is intended to be for the plaintiff, not for the tortfeasor.”
Id. Accord Simpson v. Saks Fifth Ave., Inc.,
In the related circumstance of physician “write-offs” pursuant to agreements with private insurance companies, courts in other states also have concluded that plaintiffs are entitled to seek and recover from tortfeasors the reasonable medical expenses that their medical providers bill to them without limitation to the amounts paid by their insurers. Mitchell v. Haldar,
A minority of jurisdictions have held that plaintiffs can collect from tortfeasors no more than the sums actually paid by or on behalf of the plaintiffs, but, for the most part, those courts have reached their results by relying on statutes different than those in Oregon, or a section of the Restatement which does not apply to bodily injuries, but instead applies to clams for the value of services tortuously obtained.
The dissent disagrees with the Restatement rule that a plaintiff may recover the value of medical services made necessary by a tortuous act without regard to whether the plaintiff is liable for that sum. As the dissent explains, a plaintiff can seek and recover the reasonable value of services rendered only if the plaintiff (or someone) was, at the time the services were rendered, legally obligated to pay that value. The dissent reasons that no one “incurs” an obligation if no one is obligated legally to pay it.
The only reason that the dissent gives for its position, other than that it is compelled by the legislature’s use of the word “incurred,” is that “no compensatory purpose is served by holding a defendant responsible for more than [costs incurred].”
Although the collateral source statute, ORS 31.580, does not directly address the issue of the damages that a plaintiff in a personal injury action may seek, it reflects a legislative decision to permit plaintiffs to recover damages from tortfeasors even if, due to insurance and or benefits, including Medicare benefits, they do not suffer out-of-pocket loss, and the damages therefore serve no compensatory purpose. In enacting ORS 31.580, the legislature chose to make tortfeasors who cause the same injuries liable to the same extent and to leave arrangements between plaintiffs and their providers and insurers to other law.
Furthermore, we do not necessarily agree with the dissent’s premise — that “federal law makes clear that no costs were incurred in this case over the Medicare cap[,]”
Because we decide that an injured person who receives medical services and who is billed for those services may seek the reasonable value of that treatment in a claim against a tortfeasor, a definitive interpretation of the Social Security Act is not crucial to our holding. But we do point out that all of the medical providers that rendered services to plaintiff billed him for the full reasonable value of that treatment, and defendant reasonably did not contend that
In sum, the common-law rule, as it has been articulated in the Restatement and the majority of jurisdictions, is that the plaintiff in a personal injury action is entitled to claim and recover from a tortfeasor the reasonable value of the medical services charged without limitation to the sums for which plaintiff is legally liable, that plaintiff has paid for those services, or that a third party has paid on plaintiffs behalf. Tying a plaintiffs claim to the amount that a third party has paid or satisfied undermines the collateral source rule by effectively linking the tortfeasor’s obligation to the plaintiffs relationship with a third-party benefit provider. Moreover, exclusion of “write-offs” from the amount that a plaintiff may claim creates the anomaly that a defendant will be liable for the full reasonable charges that a medical provider makes to an uninsured person who is injured, but may have more limited liability if the injured person is insured or the beneficiary of other third-party benefits.
We conclude that ORS 31.580 and the law of economic damages should and do work in harmony and permit plaintiff to claim and recover from defendant the reasonable value of the medical expenses for which he was billed and which were necessary to treat his injuries, viz., the same amount that plaintiff would have been entitled to claim and recover were he not eligible for Medicare benefits. Plaintiffs claim is not limited to the amounts that he paid or that Medicare paid on his behalf.
IV. DEFENDANT’S EVIDENTIARY ARGUMENT
In its final, alternative, evidentiary argument, defendant contends that, if the amount that Medicare paid plaintiffs medical providers does not establish the limits of defendant’s liability, then it is at least admissible evidence of the reasonable value of the services that they rendered. The amount that one pays for services generally is admissible and often may be an important factor in determining the reasonable value of those services. See Oliver v. N. P. T. Co.,
“Evidence of the [collateral] benefit [received by plaintiff] * * * and the cost of obtaining it is not admissible at trial, but shall be received by the court by affidavit submitted after the verdict by any party to the action.”
In this case, ORS 31.580(2) prohibited defendant from proving to the jury the benefits that plaintiff received from Medicare — the satisfaction of his obligations to his providers by both payment and “write-offs.”
That did not mean, however, that defendant was required to accept liability for the charges that plaintiff sought to recover. Plaintiff had the burden of proving to the jury that his claimed medical expenses were reasonable. Defendant could have put plaintiff to his proof and could have called witnesses to testify that the amounts that plaintiff sought were unreasonable. Instead, defendant stipulated at trial that the bills that plaintiff submitted as evidence were reasonable. Therefore, defendant is bound by the jury’s factual determination and award.
V. CONCLUSION
The trial court did not err in declining to limit plaintiffs claim or recovery to the amounts that Medicare actually paid plaintiffs providers or in prohibiting defendant from offering evidence of those payments.
Notes
In addition to the amount that medical providers had billed him ($38,977), plaintiff sought economic damages for future medical expenses. Plaintiffs claim for future medical expenses has no bearing on the issues presented on review.
ORS 31.710(2) provides, in part:
“As used in this section:
“(a) ‘Economic damages’ means objectively verifiable monetary losses including but not limited to reasonable charges necessarily incurred for medical, hospital, nursing and rehabilitative services and other health care services, burial and memorial expenses, loss of income and past and future impairment of earning capacity, reasonable and necessary expenses incurred for
substitute domestic services, recurring loss to an estate, damage to reputation that is economically verifiable, reasonable and necessarily incurred costs due to loss of use of property and reasonable costs incurred for repair or for replacement of damaged property, whichever is less.”
ORS 31.710 originally was enacted as former ORS 18.560 and was renumbered in 2003 without substantive changes. We refer to it by its current number.
ORS 31.580 provides:
“(1) In a civil action, when a party is awarded damages for bodily injury or death of a person which are to be paid by another party to the action, and the party awarded damages or person injured or deceased received benefits for the injury or death other than from the party who is to pay the damages, the court may deduct from the amount of damages awarded, before the entry of a judgment, the total amount of those collateral benefits other than:
“(a) Benefits which the party awarded damages, the person injured or that person’s estate is obligated to repay;
“(b) Life insurance or other death benefits;
“(c) Insurance benefits for which the person injured or deceased or members of that person’s family paid premiums; and
“(d) Retirement, disability and pension plan benefits, and federal Social Security benefits.
“(2) Evidence of the benefit described in subsection (1) of this section and the cost of obtaining it is not admissible at trial, but shall be received by the court by affidavit submitted after the verdict by any party to the action.”
ORS 31.580 originally was enacted as former ORS 18.580 and was renumbered in 2003 without substantive changes. We refer to that statute by its current number.
One agreement that plaintiff signed provided that, in consideration for medical treatment, plaintiff was obligated “to pay the account of [the provider] in accordance with its regular rates and terms.” In a separate, signed agreement with another provider, plaintiff acknowledged that, “you (or the responsible party in the case of a minor) are responsible for payment of your bill even if not covered in full or in part by your insurance.” While the terms of the agreements with other providers do not appear in the record, defendant did not contest plaintiffs contractual obligation to pay the full amount that his providers had billed him.
Additionally, Medicare, under Part C, provides for health plan options approved by Medicare and offered by private companies. Under Part C, Medicare pays to those private companies, a fixed monthly amount on the participating beneficiary’s behalf. 42 USC §§ 1395w-21 - 1395w-29. Part D of Medicare consists of a voluntary prescription drug benefit program. Id. §§ 1395w-101 - 1395w-152. Parts C and D of the Medicare program are not at issue in this case.
Plaintiff in this case may have had an obligation to pay deductibles, copays, or expenses not covered by Medicare, but those obligations are not at issue here. See 42 USC § 1395e (describing deductibles and copayments under Part A); § 13951(a), (b) (describing deductibles and copayments under Part B).
In many instances, nonparticipating physicians must bill on an assignment basis. See, e.g., 42 USC § 1395w-4(g)(3) (requiring physicians who treat patients eligible for Medicaid to accept assignment).
Because Medicare does not pay physicians who do not accept assignment directly, and because those physicians are prohibited from billing patients more than the statutorily defined “limiting charge,” and because it appears from the bills in the record in this case that Medicare paid plaintiffs physicians directly and that those physicians charged plaintiff more than a “limiting charge,” we believe, although we cannot be certain, that all of plaintiffs physicians accepted assignment. Supporting that inference in this case is the fact that plaintiffs medical bills indicate that he received Medicaid in addition to Medicare benefits, and physicians who treat patients eligible for Medicaid must accept assignment. 42 USC § 1395w-4(g)(3).
Defendant cites 42 USC § 2651 as authority for its conclusion that Medicare has a right to require plaintiff to reimburse it for the amounts that it actually paid on plaintiffs behalf. That statute provides that the United States has a right to sue a tortfeasor for the reasonable value of medical care that it is authorized or required by law to furnish or pay for, or gives the United States the right to be subrogated to any claim that the injured person has or to require the injured person to assign his or her claim or cause of action to the United States. That statute is not specific to Medicare and defendant does not cite any cases indicating that it has been used to require reimbursement by Medicare recipients. Defendant also did not establish, that plaintiff in this case assigned his claim or cause of action to the United States government or that the government asserted a right to subrogation. Because defendant does not contest its liability for the sums paid by Medicare, and because we decide that all Social Security benefits are exempt from reduction under ORS 31.580(l)(d), we need not decide whether plaintiff had an obligation to repay Medicare for the sums that it paid his medical providers on his behalf.
Defendant cites to Webster’s II New College Dictionary 707 (1995), which defines “monetary” in part, as “[o]f or relating to money or its circulation”; and Black’s Law Dictionary 945 (6th ed 1990), which defines “loss,” in part, as an “unintentional parting with something of value.”
Defendant cites to Webster’s II New College Dictionary 562, which defines “incur” as “[t]o become liable or subject to.”
The dissent takes a different tack than does defendant. It states the issue as whether a plaintiff can recover as damages “ ‘costs’ for which no one was ever liable.”
It further bears noting that other jurisdictions applying ORS 31.710 to the question of Medicare “write-offs” have reached the same result. Miller v. J-M Mfg. Co., Inc.,
Defendant seeks to distinguish Medicare “write-offs” from private insurance “write-offs” on the ground that, in the latter context, plaintiffs receive the benefit of their bargain with their insurance companies. However, Medicare is an insurance program for the elderly, and Medicare beneficiaries have a relationship with Medicare that is similar to the relationship that other insureds have with their insurers. Medicare beneficiaries also work and pay taxes, premiums, and deductibles for the insurance benefits that they receive. If they benefit from the discounted rates that the government is able to obtain, they are not less entitled to those benefits than are those who receive the benefits of private insurance programs.
There are some courts that require a plaintiff to prove that she or he has provided some consideration for the benefit of the “write-off’ before the plaintiff can seek recovery. See, e.g., Acuar, 260 Va at 192,
Restatement § 911, comment h, provides, in part, that,
“[w]hen the plaintiff seeks to recover for expenditures made or liability incurred to third persons for services rendered, normally the amount recovered is the reasonable value of the services rather than the amount paid or charged. If, however, the injured person paid less than the exchange rate, he can recover no more than the amount paid, except when the low rate was intended as a gift to him. A person can recover even for an exorbitant amount that he was reasonable in paying in order to avert further harm.”
In Bynum, the Hawai’i Supreme Court explained that the section 911 comment is inapplicable to bodily injury actions:
“[A]s employed in § 911, the term ‘value’ means ‘the exchange value,’ and that
“ ‘the exchange value of property or services is the amount of money for which the subject matter could be exchanged or procured if there is a market continually resorted by traders, or if no market exists, the amount that could be obtained in the usual course of finding a purchaser or hirer of similar property or services.’
“(Emphases added.) Comment h only pertains to the ‘value of services rendered’ in the context of ascertaining the ‘measure of recovery of a person who sues for the value of his services tortiously obtained’ or when a plaintiff‘seeks to recover for expenditures made or liability incurred to third persons for services rendered.’ (Emphases added.) This definition of‘value of services rendered’ is inapplicable, for the present case does not involve a provider who is suing for the value of the medical services provided or who seeks to recover expenditures incurred to third persons.”
Bynum, 106 Hawai’i at 91,
The dissent quotes portions of Medicare Part B that prohibit nonparticipating physicians from billing a patient more than “the limiting charge.”
The dissent takes the position that plaintiff is not liable for his hospital expenses but contends that he can recover those expenses because Medicare itself is liable for them.
Dissenting Opinion
dissenting.
The majority holds that plaintiff may recover, as economic damages, medical costs that Medicare prevented plaintiffs medical providers from charging for their services. The majority’s decision is at odds with both federal and state law. As a matter of federal law, the statutes governing Medicare capped the costs of plaintiffs medical care; neither plaintiff nor Medicare incurred more medical costs than the Medicare statutes permitted. As a matter of state law, the only economic damages arising from plaintiffs injury were the medical costs for which plaintiff was liable and for which Medicare reimbursed his providers. Because I would hold that plaintiff cannot recover economic damages for medical costs for which no one was ever liable, I respectfully dissent.
Plaintiff was injured on defendant’s premises. As a result of that injury, plaintiff had reconstructive surgery on his shoulder and knee. Plaintiff was over 65 at the time of the accident, and Medicare both provided coverage for plaintiffs medical costs and capped the amount that plaintiffs medical providers could charge for their services. In this case, Medicare capped plaintiffs medical costs at approximately $13,400; that was the amount that Medicare paid plaintiffs medical providers and neither plaintiff nor Medicare ever was liable for more than that amount. Without that cap, plaintiffs medical providers would have charged approximately $39,000 for their services.
The question that this case presents is whether plaintiff can recover economic damages for the difference between the Medicare capped rate and the medical providers’ customary rate. Put differently, the question is whether plaintiff can recover economic damages from defendant for approximately $25,600 in medical “costs” for which no one was ever liable.
The answer to that question is, or should be, simple. Economic damages compensate a plaintiff for the costs incurred as a result of a defendant’s tort. A defendant should be responsible for all costs incurred, but no compensatory purpose is served by holding a defendant responsible for more than that. In this case, the Medicare statutes limited the costs incurred as a result of plaintiffs injury and imposed a corresponding limitation on the amount of economic damages that plaintiff could recover.
That limitation on the amount of damages is separate from the collateral source doctrine. The collateral source doctrine addresses whether a defendant may take advantage of a benefit that a plaintiff receives from a collateral source (someone other than the defendant) to reduce the amount of damages that a judge or jury has awarded. See ORS 31.580 (codifying doctrine); Fowler V. Harper, Fleming James, Jr., Oscar S. Gray, 4 Harper, James and Gray on Torts § 25.22, 801-04 (2007) (describing common-law doctrine). The collateral source doctrine does not address the amount of damages that a plaintiff can recover in the first instance. That much is clear from the terms of ORS 31.580, which provides that the collateral source doctrine comes into play only after “a party is awarded damages for bodily injury or death of a person.” By its terms, ORS 31.580 presumes an existing award of damages and is limited to the question of how much of that award a defendant owes.
In my view, the majority does not keep those two doctrines separate. Rather, it appears to rely on the collateral source doctrine to define the amount of economic damages that plaintiff can recover and in doing so errs. This dissent first explains that, as a matter of federal law, the Medicare capped rate limited the costs incurred as a result of plaintiffs injury; no one incurred more than that amount. This dissent then explains that, as a matter of state statute, plaintiffs economic damages are limited to the costs that were incurred. Finally, it explains why the collateral source statute does not provide a basis for awarding plaintiff more damages than the statute defining economic damages permits.
I. MEDICARE CAPS THE MEDICAL COSTS INCURRED
Plaintiff received medical services from eight providers. Seven provided physician
Medicare Part B sets a reasonable charge (or Medicare approved charge) for medical services that a physician provides. As initially enacted, Medicare Part B did not limit the amount that a physician could charge a Medicare beneficiary unless the physician accepted assignment of the beneficiary’s Medicare claim. See 1 Medicare and Medicaid Guide (CCH) ¶ 3186,1184 (Nov 20,2007) (explaining the history of Part B). Rather, Medicare paid 80 percent of the Medicare approved charge, leaving the beneficiary responsible for the remainder of the physician’s customary charge. Id. Beginning in 1987, however, Medicare Part B capped the amount that physicians can charge Medicare beneficiaries. Id. Since 1991, that cap has taken the form of a “limiting charge,” which is a percentage of the Medicare approved charge. 42 USC § 1395w-4(g)(2)(C). Under Part B, “[n]o person is liable for payment of any amounts billed for the service in excess of [the] limiting charge.” 42 USC § 1395w-4(g)(l)(A)(ii).
The “limiting charge” establishes both the maximum that a physician can charge a Medicare beneficiary and the maximum for which a Medicare beneficiary will be liable. Physicians who do not accept assignment of Medicare claims can charge Medicare beneficiaries an amount up to the limiting charge. 42 USC § 1395w-4(g)(2)(C). Those physicians, however, may not “bill or collect an actual charge in excess of the limiting charge.” 42 USC § 1395w-4(g)(l)(A)(i). And, as noted, “[n]o person is liable for payment of any amounts billed for the service in excess of [the] limiting charge.” 42 USC § 1395w-4(g)(l)(A)(ii). If a physician has not accepted assignment, a Medicare beneficiary is responsible for paying the physician’s bill up to the amount of the limiting charge, and Medicare will reimburse the beneficiary for 80 percent of the limiting charge. Under Medicare Part B, a patient is not liable for the physician’s customary charge to the extent it exceeds the Medicare “limiting charge.”
Medicare Part A covers inpatient services in hospitals and similar facilities. Under Part A, a Medicare beneficiary is liable for a lesser amount of the cost than under Part B. Specifically, 42 USC § 1395cc(a)(l)(A)(i) provides that a hospital cannot receive payments under Medicare Part A unless it agrees “not to charge, except as provided in paragraph (2), any individual or any other person for items or services for which such individual is entitled.” Paragraph 2 of subsection 1395cc(a) lists the exceptions to that limitation on liability, which include: (1) payment of a deductible for each stay in the hospital ($1,068 in 2009); (2) daily coinsurance payments if the stay exceeds 60 days (either the hospital’s customary rate or a percentage of the deductible, whichever is lower); and (3) the additional cost of noncovered services, such as a private room, that the patient expressly requests. 42 USC § 1395cc(a)(2); see 3 Medicare and Medicaid Guide (CCH) ¶ 13,010, 5307-08 (Dec 2, 2008) (describing costs for which beneficiaries will be liable under Medicare Part A).
Medicare Part A differs from Medicare Part B in that Part A permits a hospital to charge a Medicare beneficiary only for the cost of the deductible and other charges. A beneficiary is not liable, under Part A, for the cost of inpatient hospital services up to the amount of Medicare cap — the amount
Plaintiff argues, however, that he agreed to pay and was liable for the full amount of his providers’ customary charge.
Medicare Part B prevents entities providing physician services, such as Open Advanced MRI, from billing a patient more than the limiting charge.
Plaintiffs agreement with Southwest Washington Medical Center presents a closer question but still does not support plaintiffs position. Paragraph 10 of that agreement states:
“I, the undersigned, agree * * * that in consideration of the services to be provided that the undersigned hereby obligates himself/herself * * * to pay the account of SWMC in accordance with its regular rates and terms. I further agree to pay for services denied or not covered by my insurance regardless of the reason for denial or non-coverage. I agree to pay for services not covered by my Medicaid program even if I did not disclose my Medicaid eligibility at registration or obtain eligibility on a retroactive basis.”
It is also equally permissible to read the agreement consistently with federal law; that is, the agreement “to pay * * * SWMC in accordance with its regular rates and terms” refers to those “rates and terms” that Medicare Part A permits. One should hesitate to assume that the nonspecific phrase “regular rates and terms” refers to rates and terms that are contrary to federal law. The third sentence in paragraph 10 supports that reading. It provides that the patient “agree[s] to pay for services not covered by my Medicaid program.” If the first sentence were as broad as plaintiff perceives, the third sentence in paragraph 10 would be unnecessary. That is, if the first sentence in paragraph 10 required a Medicaid beneficiary to assume responsibility for all the hospital’s customary charges, there would be no need to specify in the third sentence that a Medicaid beneficiary agrees to pay for those services that Medicaid does not cover. In any event, if the agreement with Southwest Washington Medical Center purported to impose liability on plaintiff for all the hospital’s customary charges, it would be inconsistent with Medicare Part A, and federal law would negate any contrary obligation that that agreement sought to impose.
Plaintiff did not introduce any other agreements that he may have had with his other six medical providers, all of whom were physicians. The burden of production was on plaintiff to prove the extent of his damages, and the absence of those agreements cuts against him. Beyond that, as explained above, Medicare Part B prevents a physician from charging more than the limiting charge. There is no reason to assume that plaintiffs doctors entered into agreements contrary to federal law, and, even if they did, federal law would supersede those agreements. As a matter of federal law, neither plaintiff nor Medicare incurred liability for any medical charges in excess of the Medicare cap.
II. ECONOMIC DAMAGES ARE LIMITED TO COSTS INCURRED
“For more than a century, the general rule in Oregon in assessing damages has been that a plaintiff should recover only such sums as will compensate a plaintiff for the injury suffered as a result of a defendant’s wrong.” Yamaha Store of Bend, Inc. v. Yamaha Motor Corp.,
That limitation also follows from this court’s precedent. This court’s cases have long recognized that the reasonable value of a doctor’s services limits the amount of economic damages that a plaintiff can recover;
The majority questions whether the definition of economic damages found in ORS 31.710(2)(a) is limited to determining whether a statutory cap on economic damages applies. This court, however, has not limited the definition to that context. For instance, in Zehr v. Haugen,
The definition of economic damages in ORS 31.710(2)(a) limits defendants’ damages to the costs incurred, and federal law makes clear that no costs were incurred in this case over the Medicare cap. ORS 31.710(2)(a) and the Medicare cap combine to limit the amount of economic damages that the jury could award plaintiff.
III. THE COLLATERAL SOURCE STATUTE
The majority bases its opinion primarily on the collateral source statute. In the first part of its opinion, the majority asks whether the collateral source statute applies, but in doing so it assumes that plaintiff was liable for his medical providers’ customary charges. The first part of the court’s opinion thus assumes away what is, in my view, the dispositive question. In the second part of its opinion, the majority asks “whether the amount that defendant must pay as damages for that loss is limited to the amounts that plaintiff paid or remains legally obligated to pay for the medical care that he obtained to treat that loss.”
The majority looks initially to the collateral source statute to answer the question it poses. It notes that, under the collateral source statute, a plaintiff may recover his or her medical costs from a defendant even though an insurer has paid those costs and the plaintiff does not remain legally obligated to pay them. Id. The majority reasons that the same
In my view, the majority asks and answers the wrong question. The question is not whether plaintiff has paid or remains liable to pay its medical charges. Rather, the question is whether plaintiff ever incurred liability for those charges. That follows from ORS 31.710(2)(a), which provides that costs must be “incurred” to constitute economic damages. The collateral benefits statute does not point in a different direction. As noted, ORS 31.580 has nothing to do with the amount of damages a plaintiff incurs. That statute applies only after “a party is awarded damages for bodily injury or death.” It assumes that a judge or jury has determined the amount of damages and provides a rule to determine how much of those damages a defendant owes.
The majority reasons next that “[a] plaintiff who is injured and who obtains necessary medical treatment becomes liable or subject to’ reasonable charges for that treatment and thereby ‘incurs’ them.” Id. at 234. The majority’s reasoning sweeps too broadly. Ordinarily, the charge incurred for medical services turns on the terms of the agreement between the patient and the medical provider; that is, a patient ordinarily will be liable for and will incur whatever charges he or she agrees to pay a medical provider. That is true without regard to whether the patient agrees to pay more or less than the reasonable charge. The rule the majority posits applies only when no agreement exists and the law implies a reasonable charge. See Cronn v. Fisher,
Although the majority relies on Cary v. Burris,
The decision in Cary addressed a typical situation in which a third party, such as an insurer, has paid medical expenses for which the plaintiff would otherwise be liable, and the question was whether the defendant could avoid responsibility for those expenses. Cary did not address a situation in which federal law limited the amount that a medical provider could charge a plaintiff in the first instance. In my view, Cary neither advances nor detracts from the majority’s reasoning.
The majority also relies on cases from other jurisdictions. As the majority notes, courts from other jurisdictions have split on this matter both in the result that they have reached and also in their analysis. Some have held, as I would, that a plaintiff cannot recover damages for costs that no one incurred.
Those various decisions establish that, at a minimum, the issue is one about which reasonable people can and have disagreed.
The majority notes one final point. It cites 42 USC § 1395y(a)(2) for the proposition that Medicare would not have made payments to plaintiffs medical providers if plaintiff had not agreed to assume liability for their customary charges.
“Notwithstanding any other provision of this subchap-ter, no payment may be made under part A or part B of this subchapter for any expenses incurred for items or services—
“(2) for which the individual furnished such items or services has no legal obligation to pay, and which no other person * * * has a legal obligation to provide or pay for * * *
In my view, the majority reads paragraph 1395y(a)(2) for more than it is worth. That paragraph is one of 21 exclusions from Medicare coverage, which range from eyewear to pedicures. See 42 USC § 1395y(a)(7) (excluding coverage for eyewear); 42 USC § 1395y(a)(13)(C) (excluding coverage for pedicures). The exclusion that the majority cites applies to services “for which the individual furnished such * * * services has no legal obligation to pay, and [for] which no other person * * * has a legal obligation to provide or pay.” 42 USC § 1395y(a)(2) (emphasis added).
By its terms, paragraph 1395y(a)(2) excludes from Medicare coverage only those services provided for free, without expectation of payment from anyone. As the agency charged with administering Medicare has explained, the exclusion “applies where items and services are furnished gratuitously without regard to the beneficiary’s ability to pay and without expectation of payment from any source, such as free x-rays or immunizations provided by health organizations.” Center for Medicare Services,
This is not a case in which plaintiffs medical providers furnished services gratuitously without expectation of payment from anyone. Rather, plaintiff had an obligation to pay, at a minimum, the deductible for the inpatient hospital services he received under Part A and 20 percent of his physicians’ charges under Part B. And Medicare had an obligation to pay the remainder of the charges up to the Medicare approved amount. In my view, the majority errs in converting an exclusion from Medicare coverage for completely gratuitous services into an implicit requirement that Medicare beneficiaries assume liability for all of their medical providers’ customary charges.
As I read the governing Oregon statutes, medical charges must be incurred to be recovered as economic damages. In this case, neither plaintiff nor Medicare ever incurred liability for more than the Medicare cap. It follows that plaintiff may not collect damages for costs that no one incurred. I respectfully dissent.
Physicians who accept assignment of a Medicare beneficiary’s claim are limited to a lesser amount. They may not charge the beneficiary more than the Medicare approved amount, which is slightly less than the “limiting charge.” 42 USC § 1395u(b)(3)(B)(ii) (physicians who accept assignment agree that the “reasonable charge [set by Medicare] is the full charge for the service”); see 1 Medicare and Medicaid Guide (CCH) ¶ 3186, 1184 (same). Because the reasonable charge is less than the limiting charge, the limiting charge establishes the maximum amount that any physician can charge a Medicare beneficiary for medical services and the maximum amount for which the beneficiary will be liable.
Since 1983, Medicare has capped the payments to hospitals and similar facilities by providing a set amount, adjusted for certain costs, for each condition diagnosed. See 1 Medicare and Medicaid Guide (CCH) ¶ 4202 (June 16, 2009) (describing history and methodology of setting payments to hospitals under Medicare Part A); 42 CFR § 412.60 (specifying procedures for determining Medicare payments under Part A).
In resolving defendant’s motion to reduce the verdict, the trial court recited that “it is undisputed that * * * the plaintiff contractually agreed to pay” his medical providers’ customary charges. Defendant, however, argued in its motion that plaintiff had not “incurred” his providers’ customary charges to the extent that they exceed the amount that Medicare paid, and it quoted the federal district court opinion in Wildermuth v. Staton, No CIV.A. 01-2418-CM,
Paragraph 2 of the agreement states:
“Payment is preferred at the time of service as a courtesy and if you supply all information needed today, we will bill your primary insurance carrier and give you an insurance form for other billing. This does not waive your responsibility for payment. Remember whether you have health insurance coverage or not, professional services are rendered to and charged to the patient. This office cannot accept responsibility for collecting any insurance claim or negotiating a settlement on a disputed claim. You (or the responsible party in the case of a minor) are responsible for payment of your bill even if not covered in full or in part by your insurance.”
Physician services include diagnostic tests, such as an MRI. See 42 CFR § 414.2 (defining physician services).
Southwest Washington Medical Center’s bill makes clear that it provided hospital inpatient services subject to Part A rather than physician services subject to Part B.
ORS 31.710(2)(a) does not, by its terms, limit the amount of economic damages to the costs incurred by the plaintiff. In this case, both plaintiff and Medicare incurred costs for medical services as a result of defendant’s acts, and defendant has not argued that it is not liable for the costs that plaintiff and Medicare incurred. Rather, it has argued only that it is not liable for costs that no one incurred.
In Touhy, the plaintiff introduced into evidence the bills for medical treatment that he received as a result of the defendant’s negligence but submitted no evidence that those charges were reasonable.
Additionally, ORS 31.705 requires that jury verdicts in civil actions seeking damages arising out of bodily injury “shall set forth separately economic damages and noneconomic damages, if any, as defined in ORS 31.710.” That requirement is not limited to cases in which a plaintiffs prayer exceeds the statutory cap on economic damages, confirming that the legislature’s definition of economic damages is not as narrow as the majority suggests.
Initially, the trial court ruled that the jury could not consider those sums as an element of the plaintiffs damages. The court then allowed the plaintiffs motion for a new trial on the ground that its damages ruling was erroneous, the defendant appealed to this court from that ruling, and this court affirmed. Id. at 26.
Part of the difficulty arises, I suspect, from the fact that Medicare was not written with tort law in mind. When Congress decided to provide a system of medical coverage for persons over 65 years of age, it did not necessarily consider how the limitations it imposed on medical costs would affect a plaintiffs ability to recover damages for medical services resulting from a defendant’s tortious acts. We are, however, obliged to make that determination.