Is Evidence of Payments by Medical Insurer Admissible in Tennessee on the issue of Reasonableness – Court of Appeals Muddies the Waters

In Dedmon v. Steelman, 2016 Tenn. App. LEXIS 386 (6/2/16), the Court of Appeals rejected any assertion that the Tennessee Supreme Court meant for its holding in West v. Shelby County Healthcare Corporation, standing alone, to control all determinations of reasonableness with regard to medical expenses under Tennessee law, while allowing the defendant to offer proof contradicting the reasonableness of the medical expenses submitted by the plaintiff. The defendant had moved to exclude the plaintiff’s evidence that her incurred medical expenses, totaling $52,482.87, were reasonable and necessary.  This was done in the usual fashion with expert testimony from a treating physician. The trial court granted the motion.

The Court of Appeals reversed, holding that a plaintiff may present the testimony of a physician who testifies that the amount of medical expenses billed or charged to a plaintiff was reasonable, and as the expert’s testimony was admissible, its exclusion by the trial court under West was improper. However, the defendants will be permitted to offer proof contradicting the reasonableness of the medical expenses submitted by the plaintiff.  Exactly how to do that without violating the collateral source rule, however, was not made clear by the Court:

“ . . . existing law in this state also makes clear that Defendants are permitted to offer proof contradicting the reasonableness of the medical expenses. See Borner, 284 S.W.3d at 218. However, in doing so, they must not run afoul of the collateral source rule. See, e.g., Martinez v. Milburn Enters., Inc., 290 Kan. 572, 233 P.3d 205, 222-223 (Kan. 2010) (“… the collateral source rule bars admission of evidence stating that the expenses were paid by a collateral source. However, the rule does not address, much less bar, the admission of evidence indicating that something less than the charged amount has satisfied, or will satisfy, the amount billed.”); see also Stanley v. Walker, 906 N.E.2d 852, 858 (Ind. 2009). If the Tennessee Supreme Court is inclined to extend the reasoning of West to personal injury litigation as Defendants suggest, it is, of course, certainly free to do so, but this Court must apply the law as it currently stands.”

With its final comment, the Western Section practically begs the Supreme Court to review its decision:

“We sincerely hope that the Tennessee Supreme Court will review this case and consider the excellent arguments presented by both the parties, the amici curiae on appeal, and the concurring opinion.”

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