Medicaid Patient Could Introduce Full Amount Of Physician's Bill

The estate of a Sumter County Medicaid patient, who died after her doctor failed to act on a suspicious mammogram, could introduce evidence of the total sum of her medical bills — not just the amount paid by the government, the Supreme Court has ruled in a 3-2 decision.

The high court rejected the physician’s argument that the “billed amount,” which exceeded the Medicaid payment by more than $51,000, was inadmissible.

Limiting the evidence to the Medicaid amount would contravene the collateral source rule and result in a windfall for the defendant doctor, the Supreme Court said.

Both the amount paid by Medicaid and the physician’s full bill were admissible for the jury to consider in determining the plaintiff’s damages, the Supreme Court ruled.

The decision upholds a verdict of more than $2 million for the plaintiff.

The case is Haselden v. Davis (South Carolina Lawyers Weekly No. 011-046-03, 8 pages). Justice John H. Waller Jr. wrote the opinion and Chief Justice Jean Hoefer Toal and Justice James E. Moore concurred. Justices E.C. Burnett III and Costa M. Pleicones dissented.

Facts

The decedent died of breast cancer in 1994. Her estate sued her treating physician and alleged that he was negligent in failing to timely read a suspicious mammogram.

The decedent had a mammogram in November 1991, but her breast cancer wasn’t diagnosed until June 1993. By that time, it had metastasized into her lymph nodes.

The trial court allowed the introduction of $77,905 in medical expenses billed to the decedent. The physician argued that only the expenses paid by Medicaid should be admitted into evidence — $24,109.

The jury awarded $1,082,103 to the decedent’s statutory beneficiaries and $1 million to her estate.

The physician appealed and the Appeals Court affirmed.

Ruling

The Supreme Court also affirmed.

“We find both the amount of the Medicaid payment and the amount billed by [the physician] were admissible to establish the amount of … damages,” Justice Waller wrote.

“[T]o hold that the plaintiff is limited to damages in the amount actually paid by Medicaid is contrary to the purposes behind the collateral source rule and would result in a windfall to the defendant tortfeasor,” he wrote.

“In our view, a defendant physician who agrees to become a Medicaid provider, thereby agreeing to accept as compensation for medical services those amounts set forth in the Medicaid agreement, who thereafter bills a Medicaid patient for the full value of his services, may not claim that the true, reasonable value of those services is the lesser amount paid by Medicaid,” Justice Waller wrote.

The full amount of the physician’s bill was relevant to establish the reasonable value of the medical services rendered to the decedent, the Supreme Court held.

Dissent

In their dissenting opinion, Justices Burnett and Pleicones said that they believed the difference between the Medicaid payment and the full bill was not recoverable.

“Medicaid’s unique characteristics and the law of damages require finding only the amount paid by Medicaid is recoverable as compensatory damages,” Justice Burnett wrote.

“The difference between the amount billed and the amount paid, the amount in issue in this case, is ‘phantom’ money in that no one had paid the amount and no one will incur a debt for the amount,” he wrote.

The excess between the amount paid by Medicaid and the full amount of the physician’s bill did not fall within the scope of the collateral source rule, according to the dissent.

“It is not reasonable, under principles of compensatory damage law, to allow plaintiff to receive a windfall in damages of amounts for which no entity is liable,” Justice Burnett wrote. “The majority opinion predicates its definition of compensatory medical damages on the legal fiction that the billed amount … can be a reasonable amount of damages.

“In sum, this court’s opinion may be interpreted as a plaintiff’s right to be reimbursed for money that will never be expended,” he wrote.

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