George WHITE, Respondent on Review, υ. JUBITZ CORPORATION, an Oregon corporation, dba Ponderosa Lounge, Petitioner on Review.
CC 040302468SC; CA A128617; S056015
Supreme Court of Oregon
Argued and submitted January 13, decision of Court of Appeals and judgment of circuit court affirmed October 15, 2009
212 | 219 P.3d 566
C. Robert Steringer, Portland, filed a brief for amicus curiae Oregon Association of Defense Counsel.
Barry J. Goehler, Portland, filed a brief for amicus curiae Donald McGee. With him on the brief was Michael A. Lehner.
Charles Robinowitz, Portland, filed a brief for amicus curiae Oregon Trial Lawyers’ Association. With him on the brief was Maureen Leonard.
WALTERS, J.
Kistler, J., dissented and filed an opinion in which Balmer, J., joined.
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 plaintiff‘s medical providers had billed him for their services. Plaintiff was over 65 years old and, pursuant to the federal
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.1 Before trial, defendant moved to limit plaintiff‘s economic damages to “what was paid.” Defendant argued that, under
“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,
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,
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.4 The court concluded that the satisfaction of those obligations by Medicare through payment and provider “write-offs” were “federal Social Security benefits” that
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., 219 Or App 62, 182 P3d 215 (2008). The Court of Appeals applied the definition of economic damages found in
We granted defendant‘s petition for review. In this court, defendant assigns as error three rulings of the trial court, each of which challenges plaintiff‘s 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 plaintiff‘s 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 plaintiff‘s right to recover those charges. Indeed, defendant stipulated at trial that, as a factual matter, the providers’ charges were both reasonable and necessary. The arguments that defendant advances instead challenge plaintiff‘s right, as a Medicare beneficiary, to recover those expenses, thereby, in defendant‘s view, wrongfully granting plaintiff a “windfall” or “double recovery.”
For reasons that we explain, the collateral source statute,
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, 169 Or 24, 127 P2d 126 (1942), the plaintiff, a federal employee injured in the performance of official duties, was entitled to the benefits of a federal law that required the government to provide him with medical and hospital services either by furnishing him with government physicians and hospitals, or if impracticable, by paying for commensurate private services. When the plaintiff, who had received the benefits of that government program, also sought to recover medical expenses from the tortfeasor who caused his injuries, the trial court prohibited the jury from making such an award. Id. at 26. This court held that, although the “benefits of the United States Government compensation act,” id. at 25, were provided to the plaintiff as a “mere gratuity,” id. at 28, those benefits did not preclude the plaintiff from recovering the full amount of his special damages from the defendant, id. at 29. The court quoted 1 Sedgwick on Damages § 67 (9th ed 1912), for the following proposition:
“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., 270 Or 208, 213, 527 P2d 256 (1974).
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 provider generally will have paid premiums for those benefits or will have earned them as compensation for employment. Similarly, a plaintiff who receives retirement benefits, whether from a private corporation or a government program, generally will have earned or invested those funds. In addition, there are many instances in which the third-party benefit provider retains a right of subrogation for any tort award that beneficiaries recover. As a result, the collateral benefits paid by a third party may only reimburse the plaintiff for his or her prior labor or investment or may be returned to that third party. See, e.g.,
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
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., 305 Or 362, 369, 752 P2d 291 (1988) (emphasis added). See also Dickson v. Hollinger, 262 Or 113, 115 n 1, 496 P2d 912 (1972) (noting that legislature addressed criticism of collateral source rule by providing insurers with reimbursement and subrogation rights).
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
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
“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,
Instead of relying on the text of
“[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, 346 Or 160, 172-73, 206 P3d 1042 (2009) (footnotes omitted; emphasis in original).
Rather than disclose a latent ambiguity in its text, the legislative history of
“The policy question here is: Should the defendant get the benefit of the plaintiff‘s 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 plaintiff‘s verdict except in circumstances in which the plaintiff would be required to repay the benefits or had purchased, earned, or invested toward the benefits. Those legislators introduced Senate Bill (SB) 323 (1987), which provided, in part:
“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
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] plaintiff‘s favor prior to the entry of final judgment. Before making the deduction, the court shall determine the cost to [the] plaintiff or [the] plaintiff‘s estate of obtaining such benefit and shall credit the cost against 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 plaintiff‘s 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 ‘may’ 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
The final House version of the bill also contained the four categories of benefits that the current version of
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.
With respect to the services provided under part A of the
With respect to services provided under Part B of the
If a nonparticipating physician does not accept assignment from a Medicare eligible patient, then Medicare will pay the patient, not the physician.
In this case, plaintiff‘s 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
“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(1)(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” that the
One of those paragraphs,
Neither defendant‘s citation to other state statutes nor the legislative history of
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 plaintiff‘s providers had charged to him. Under
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
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
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 plaintiff‘s “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 in
“(1) Except for claims subject to
ORS 30.260 to30.300 andORS 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.”10 Defendant cites the dictionary definition of “incurred” for the proposition that, to “incur” a charge, a plaintiff must “become liable or subject to” it.11 We understand defendant‘s argument with respect to those definitions to be that, because plaintiff did not pay or have an obligation to pay the charges that his medical providers billed to him but later “wrote off,” plaintiff did not suffer “monetary loss” with respect to those charges, nor did he “incur” them.
The first problem with that argument is that
Perhaps recognizing that impediment, defendant contends that
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 result of defendant‘s tort, and he obtained the medical treatment that was necessary to restore him, to the degree possible, to his physical state before the tortuous act. The question that this case poses is not whether plaintiff suffered loss—plaintiff‘s physical injuries certainly are a loss entitling him to compensatory damages. The question is 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.12
One answer to that question is found in the collateral source statute and the legislative policy that it imposes. As we have explained, under
Insofar as
A clear indication that
Defendant does not cite an Oregon case that limits a plaintiff‘s 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, 136 Or 426, 430, 299 P 999 (1931) (juries may
“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, 169 Or 24, 127 P2d 126 (1942), indicates that a plaintiff may claim medical expenses as damages although he or she will not pay or have an obligation to pay the provider of the medical services. In that case, federal law assured the plaintiff that the government would provide for his medical care and that the plaintiff would not have any obligation to his medical providers. The court characterized the government program as a gratuity and held that its existence did not relieve the defendant from liability for the worth of the care that the plaintiff received. Id. at 28-29. The legal authority that the court cited with approval stated that, whether third-party benefits are given as a gift or in performance of a contract, a defendant has no “‘equitable or legal claim to share in the benefit.‘” Id. at 28 (quoting Sedgwick on Damages). Although the court in Cary approached the issue as a collateral source issue and not as a pleading issue, the end result was that the court permitted the plaintiff to recover the “worth” of the medical expenses from the defendant, regardless of the fact that he would not pay money or incur
The decision in Cary accords with Restatement (Second) of Torts § 924 (1979), cited with approval by this court in Zehr v. Haugen, 318 Or 647, 656 n 6, 871 P2d 1006 (1994). Section 924 is entitled “Harm to the Person.” It provides, in part, that “[o]ne whose interests of personality have been tortuously invaded is entitled to recover damages for the past or prospective * * * reasonable medical and other expenses[.]” Comment f to that section, entitled “Expenses,” provides that an “injured person is entitled to damages for all expenses and for the value of services reasonably made necessary by the harm.” Restatement § 924, comment f (emphasis added). Comment f then instructs that ”[t]he value of medical services made necessary by the tort can ordinarily be recovered although they have created no liability or expense to the injured person, as when a physician donates his services.” (Referring to Restatement (Second) of Torts § 920A (1979), which describes the collateral source rule.) (emphases added)). Thus, the Restatement permits a plaintiff to recover from a tortfeasor the reasonable value of the medical treatment that he or she receives whether plaintiff is liable to pay or pays the medical providers’ charges for that treatment, the providers waive those charges, or a third party pays or otherwise satisfies those charges. Under that rule, and as we noted with respect to the collateral source statute, plaintiffs who incur the same injuries as a result of a defendant‘s tortuous actions may claim and recover the same damages.
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 plaintiff‘s 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
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, 892 NE2d 1018, 1031 (Ill 2008) (so stating). In Wills, the Illinois Supreme Court relied on its collateral source rule to hold that the plaintiff was entitled to the full amount of her medical expenses, notwithstanding the fact that she had not paid those expenses and would not be required to do so. Medicare had satisfied the plaintiff‘s obligation and had done so by paying less than the amounts that the plaintiff had been billed. The court noted, as this court did in Cary, 169 Or at 28-29, and Reinan v. Pacific Motor Trucking Co., 270 Or 208, 213, 527 P2d 256 (1974), that the policy behind the collateral source rule—“that the wrongdoer should not benefit from the expenditures made by the injured party or take advantage of contract or other relations that may exist between the injured party and third persons,” Wills, 229 Ill 2d at 413, 892 NE2d at 1030 (citation and emphasis omitted)—militated a result in which the plaintiff could claim the full value of the medical treatment:
“Clearly, another relationship between an injured plaintiff and a third party could be a relationship with the government that allows the plaintiff‘s 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.”
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, 883 A2d 32, 40 (Del 2005); Hardi v. Mezzanotte, 818 A2d 974, 985 (DC 2003); Robinson v. Bates, 112 Ohio St 3d 17, 18, 857 NE2d 1195, 1196 (Ohio 2006) (but allowing defendant to adduce evidence of the amount paid to satisfy medical bills); Acuar v. Letourneau, 260 Va 180, 192, 531 SE2d 316, 322 (Vir 2000); Koffman v. Leichtfuss, 246 Wis 2d 31, 630 NW2d 201 (Wis 2001); Lopez v. Safeway Stores, Inc., 212 Ariz 198, 206, 129 P3d 487, 495 (Ariz App Div 2, 2006); Tucker v. Volunteers of America Colorado Branch, 211 P3d 708, 713 (Colo App 2008).14
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, 531 SE2d at 322 (so holding). Those courts generally hold that Medicare beneficiaries provide such consideration. See Rose v. Via Christi Health System, Inc., 276 Kan 539, 546, 78 P3d 798, 803 (2003); Bozeman v. State, 879 So 2d 692, 704 (La 2004) (so holding).
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. 347 Or at 245 (Kistler, J., dissenting). Under that reasoning, if a plaintiff receives medical services, and, after the services are rendered, the medical provider gratuitously discharges an express or implied obligation to pay for those services, the plaintiff may recover their full reasonable value from a tortfeasor. If, however, the medical provider informs the plaintiff prior to treatment that the plaintiff will have no obligation to pay for medical services, the plaintiff is not entitled to recover any sum from a tortfeasor for those necessary services. Similarly, under the dissent‘s reasoning, if a plaintiff receives medical services and a bill for their full reasonable value, but the medical provider has an agreement with an insurer to accept less than that sum as payment in full, and to “write off” the remainder, thus discharging the plaintiff from an express or implied contractual obligation, the plaintiff can recover from a tortfeasor the full sum charged. However, if the law, rather than an insurer‘s agreement, requires the “write-off,” the plaintiff cannot recover the amount “written off.”
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].” 347 Or at 245 (Kistler, J., dissenting). If the dissent means to argue that a plaintiff can only recover as damages the amount necessary to compensate him or her for
Although the collateral source statute,
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[,]” 347 Or at 252 (Kistler, J., dissenting), and thus that the bills that plaintiff‘s medical providers sent and the contracts that they required plaintiff to execute violated federal law. 347 Or at 249 (Kistler, J., dissenting).16 The Social Security Act more reasonably may be interpreted to limit not the amounts a beneficiary may incur but the amounts that Medicare will pay “to [injured beneficiaries] or on their behalf.”
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 plaintiff, by contract, had not agreed to pay those bills. Whether the Medicare laws benefitted plaintiff by providing that he was not legally obligated to pay those bills or instead provided a means for their discharge is of no legal consequence in this tort action. In either instance, plaintiff obtained treatment with the same reasonable value. In either instance, plaintiff received the benefits of the Medicare program that he earned through employment or payment of premiums, and those benefits do not reduce the amount that he can seek or recover from defendant.
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 plaintiff‘s behalf. Tying a plaintiff‘s 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 plaintiff‘s 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
IV. DEFENDANT‘S EVIDENTIARY ARGUMENT
In its final, alternative, evidentiary argument, defendant contends that, if the amount that Medicare paid plaintiff‘s 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., 3 Or 84, 87 (1869) (“In estimating damages, it is proper to consider loss of time, money necessarily paid, or debts necessarily incurred in curing the bodily injury * * *.“). But, in the circumstances where it applies,
“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,
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
V. CONCLUSION
The trial court did not err in declining to limit plaintiff‘s claim or recovery to the amounts that Medicare actually paid plaintiff‘s providers or in prohibiting defendant from offering evidence of those payments.
The decision of the Court of Appeals and the judgment of the circuit court are affirmed.
KISTLER, J., dissenting.
The majority holds that plaintiff may recover, as economic damages, medical costs that Medicare prevented plaintiff‘s 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 plaintiff‘s 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 plaintiff‘s 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 plaintiff‘s medical costs and capped the amount that plaintiff‘s medical providers could charge for their services. In this case, Medicare capped plaintiff‘s medical costs at approximately $13,400; that was the amount that Medicare paid plaintiff‘s medical providers and neither plaintiff nor Medicare ever was liable for more than that amount. Without that cap, plaintiff‘s 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
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 plaintiff‘s 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
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 plaintiff‘s injury; no one incurred more than that amount. This dissent then explains that, as a matter of state statute, plaintiff‘s economic damages are limited to the costs that were incurred.
I. MEDICARE CAPS THE MEDICAL COSTS INCURRED
Plaintiff received medical services from eight providers. Seven provided physician services, which are covered under Medicare Part B. One provided inpatient hospital services, which are covered under Medicare Part A. Medicare Part A and Medicare Part B are subject to different statutory provisions, and this opinion begins by discussing the limitations that Medicare Part B places on the amount that physicians can charge Medicare beneficiaries.
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.
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.
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,
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 that Medicare reimburses the hospital.2 However, both Part
Plaintiff argues, however, that he agreed to pay and was liable for the full amount of his providers’ customary charge.3 The record does not support that assertion. As noted, plaintiff received medical services from eight providers. The agreements with two of those providers are in the record. One agreement, with Open Advanced MRI & CT, reminds patients that “whether you have health insurance coverage or not, professional services are rendered to and charged to the patient.” It then adds, “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.”4 The part of the agreement on which plaintiff relies states only that plaintiff remains responsible for payment of his bill, even if he has insurance. The agreement says nothing about the rate that plaintiff agreed to pay or whether plaintiff is responsible for any amounts over and above what Medicare permits. The agreement is silent on that point.
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);
Plaintiff‘s agreement with Southwest Washington Medical Center presents a closer question but still does not support plaintiff‘s 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.”
Plaintiff presumably interprets the agreement obligating him “to pay the account of SWMC in accordance with its regular rates and terms” as an agreement to accept liability for the hospital‘s customary charges. While textually permissible, that interpretation conflicts with Medicare Part A, which requires hospitals to agree not to charge Medicare beneficiaries for their services except as expressly authorized.6
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”
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 plaintiff‘s 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., 310 Or 333, 344, 798 P2d 656 (1990).
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; that is, if the amount that a doctor charges for medical services exceeds the reasonable value of those services, a plaintiff can recover only the reasonable value. Touhy v. Columbia Steel Co., 61 Or 527, 532-33, 122 P 36 (1912).8 The converse is not true, however. This court has never held nor suggested that, when the agreed charge for medical services is less than its reasonable value, a plaintiff may recover the reasonable value of those services. Such a rule would be antithetical to the principle 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., 310 Or at
The majority questions whether the definition of economic damages found in
The definition of economic damages in
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
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 answer should apply in this case. Id. at 233-34. The majority concludes that, if we were to reach a different answer, we could not give effect to
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
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
Although the majority relies on Cary v. Burris, 169 Or 24, 127 P2d 126 (1942), as support for its reasoning, that decision addresses a related but different issue. In Cary, an employee of the federal government was injured in an automobile accident. Id. at 25. The defendant alleged, as a partial defense, that the United States had paid the employee‘s medical costs. Id. The employee admitted in his reply that “the United States Employees’ Compensation Commission had advanced all said sums but that he would be required to reimburse the commission for said advances out of the proceeds of the judgment [against defendant] when collected.” Id. at 25-26. The trial court ruled that the employee could recover damages for the money that the United States had advanced for his medical treatment, and this court affirmed. Id. at 29.10 In reaching that conclusion, this court recognized that a federal statute required the employee to reimburse the United States for any funds that it had advanced to pay for his medical costs. Id. at 27; see Dahn v. Davis, 258 US 421, 430, 42 S Ct 320, 66 L Ed 696 (1922) (discussing federal statute).
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
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. See Moorhead v. Crozer Chester Medical Center, 765 A2d 786, 789-91 (Pa 2001) (holding that the reasonable value of medical services that a Medicare beneficiary received cannot exceed “the amount that the plaintiff has actually paid or for which he or she has incurred liability“); Hanif v. Housing Authority, 246 Cal Rptr 192, 194-96 (Cal App 3 Dist 1988) (holding that a state Medicaid beneficiary cannot “recover from the tortfeasor more than the actual amount he paid or for which he incurred liability for past medical care and services“). Other courts have held that the amount Medicare pays is, while not dispositive, admissible evidence on the reasonable value of medical services. Robinson v. Bates, 857 NE2d 1195, 1200 (Ohio 2006). Still other courts have held, as the majority does, that a plaintiff can recover the reasonable value of the services received without regard to the limitations that Medicare or Medicaid places on the costs that a medical provider charges. See, e.g., Bynum v. Magno, 106 Hawai‘i 81, 88, 101 P3d 1149, 1156-57 (Haw 2004); Brandon HMA, Inc. v. Bradshaw, 809 So 2d 611, 619-20 (Miss 2001).
Those various decisions establish that, at a minimum, the issue is one about which reasonable people can and have disagreed.11 Beyond that, the decisions do not have much bearing on the inquiry before us. The Oregon legislature has chosen to codify both the collateral benefit rule and the definition of economic damages. While other states’ common-law decisions may be informative and even persuasive in the abstract,
The majority notes one final point. It cites
“Notwithstanding any other provision of this subchapter, 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
By its terms, paragraph
This is not a case in which plaintiff‘s 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.
Balmer, J., joins this dissenting opinion.
Notes
“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 replace-ment of damaged property, whichever is less.”“(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 judg-ment, 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.”
“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.”
Bynum, 106 Hawai‘i at 91, 101 P3d at 1159.“[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.”